lizabeth Cronan is a US-trained lawyer admitted to practice in the state of Minnesota. She received her Juris Doctor from William Mitchell College of Law in St. Paul, having also studied international law with an emphasis on British and European Union law at the University College London in England. She joined GamblingCompliance in mid-2008 and has most recently been involved with the launch of its new Washington D.C. office. She is responsible for researching and writing regulatory content, with a particular emphasis on state, federal and tribal-level regulations in the US gaming market.
How is the path towards a legal and regulated Internet gambling market in US after the House Financial Services Committee’s vote last week?
The House Financial Services Committee’s vote was significant because the vote illustrated that there is a degree of bi-partisan support (across both political parties) for a federally regulated Internet gaming framework. The number of Committee members supporting the Frank bill was also noteworthy, as many speculated that it would be a very close vote, and right up until the day of the mark up, there was an expectation that there would not be enough votes to approve the measure.
Importantly, I think that the vote illustrated that there is an increasing understanding at the political level that it could be possible to establish a regulatory framework for Internet gaming, as there has been considerable doubt over whether Internet gambling can be regulated at all from a technical point of view.
Which are the next steps?
Currently, Congress is on a summer recess, which lasts throughout the month of August. Once the session resumes in September, there are only two months until elections in November for the bill to receive a vote on the full floor of the House. It would still need to be approved there and also in the Senate in order to become law.
Will be introduced more amendments to Barney Frank’s bill?
There could certainly be further amendments to the Frank bill as it’s fair to say the bill would have to pass through a lot of hands, extremely influential hands, in the House and especially Senate before it became law. For example, there is currently an alternative proposal in the Senate that would legalize only internet poker and not other forms of online gaming. It’s been speculated in the past that Barney Frank’s bill – or even an alternative bill altogether – could ultimately be scaled down and limited to just poker games only, but we don’t yet know if that would be the case.
It is possible to think in a final resolution for this year?
Given the number of influential political factors, it is hard to speculate on what may happen before the end of the year. Since 2010 is an election year, and every member of the House of Representatives is up for re-election, a lot of time between now and the elections in November will be taken up focusing on campaigning and getting re-elected. This may also mean that Representatives may be more apprehensive about pushing to move legislation that is considered controversial – such as Internet gaming.
Which will be the situation of gambling tribes if the bill becomes law?
If this bill becomes law, as it currently stands, gaming tribes in the United States will essentially be considered equivalent to a US state. They will be authorized to obtain their own licenses to operate Internet gaming beyond the borders of their reservations, and they will not be required to re-negotiate their tribal gaming compacts with the state governments. Tribal gaming compacts currently govern the limits of land-basedtribal gaming and they vary state by state.
How much will generate in money Internet gambling’s regulation?
It’s hard to say. Although supporters of a regulated Internet gambling framework have indicated that over the course of ten years, the federal government could receive an estimated us$ 42 billion, this figure has been disputed in certain quarters. For starters, this figure assumes that there won’t be any states that opt out of the proposed federally regulated framework, and that remains a prerogative of all states under the Barney Frank bill as it currently stands.
It’s also important to remember that the Barney Frank bill doesn’t include any tax provisions; they are contained in a companion bill sponsored by Congressman Jim McDermott from Washington State. The McDermott bill has yet to be approved in House Committee stage and it's controversial in itself, as it allows the federal government to tax internet gaming, while traditionally only states have had the power to tax gambling activities in the United States.