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May 30, 2015

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POLITICS:

Key conservative joins Harry Reid in effort to legalize online poker

Harry Reid

Harry Reid

Rep. Joe Barton

Rep. Joe Barton

WASHINGTON — On most issues, Rep. Joe Barton, a Texas Republican, and Nevada’s Democratic Sen. Harry Reid are thorns in each other’s sides.

Reid hates oil subsidies. Barton is such a defender of oil companies that last year, he apologized to BP for Congress’ pointed inquiry into its mismanagement of the Gulf spill.

Reid has spent most of his career trying to kill the proposed Yucca Mountain nuclear waste repository. Barton is one of Congress’ biggest backers of getting it up and running, and predicted that: “I have a feeling we will, before the end of this year, do so.”

But despite their differences, these two are shaping up as a dream team for the online gaming community and its efforts to legalize Internet poker — and Internet poker only — this year.

Why a dream team is needed became apparent when California Republican Rep. John Campbell and Massachusetts Democrat Rep. Barney Frank introduced in March broader legislation to legalize Internet gambling. It seeks to amend the 2006 Unlawful Internet Gambling Enforcement Act by expanding consumer protections, introducing a licensing procedure for Internet gambling providers, and stepping up enforcement against illegal operators through the Treasury Department.

Frank steered an identical bill through the House’s Financial Services Committee last year when he was chairman. But under the new House majority, Alabama Republican Rep. Spencer Bachus controls that committee, and he is no friend to Internet gambling. In fact, none of the congressional committee chairmen with jurisdiction over the Campbell/Frank bill are: Bachus, Lamar Smith of the Judiciary Committee, and Dave Camp of Ways and Means.

So, enter Barton, who brings a new bill, a new face, and a new committee to the mix.

Barton is chairman emeritus of the Energy and Commerce Committee, which is where Barton intends to bring up his bill. The legislation is still a work in progress, but he expects to officially introduce an Internet poker-only bill this summer.

Poker has emerged as the most popular, and thus most promising source of potential tax revenue for the federal government and states that would license the operators.

In the past few years, poker has built a following that goes beyond casinos: A community of 15 million plays the game online, and it has become a spectator sport, with tournaments drawing millions of viewers to broadcasts on sports networks.

Barton is a fan of the game.

“I love to play poker,” he told the Sun last week, explaining why he decided to push to legalize Internet poker. “When I was in the minority, I told (other lawmakers), ‘you’re in the majority, do something about it.’ But now I’m in the majority and I’m trying to get it going.”

To do that, Barton is having to make a few strategic moves.

One is getting the bill under the Energy and Commerce Committee’s jurisdiction by giving authority to license new operators to the Commerce Department.

Another is making sure the legislation takes into consideration recent legal developments.

In April, the Justice Department indicted the three biggest Internet poker operators with clients in the United States — PokerStars, Full Tilt Poker and Absolute Poker — and charged them with bank fraud and money laundering. The government is seeking $3 billion in fines for playing the system to process payments from U.S. players, which has been illegal since late 2006, when Congress passed the Internet gaming act.

Several states also have taken up measures to legalize Internet poker. Most efforts have failed, but in April — just days before the gaming outfits were indicted — Washington, D.C., became the first U.S. entity to make it legal.

The crosscurrents of state pressure to change federal law to increase opportunities to gamble online, and growing federal concern that states may not license trustworthy operators, are fueling a debate that Barton is aware of. He wouldn’t detail exactly how he plans to address the tension.

Enforcement of good gambling practices will be key to drawing bipartisan support necessary to carry the bill. Last year’s bill proposed treating illegal online gambling operators similar to how comprehensive immigration proposals usually treat illegal immigrants: If you come out of the shadows, you’ll have to wait for a certain period (under last year’s bill, there was a 15-month blackout), but then you can apply for legal papers and join the system on the up and up.

It’s unlikely that any state’s statutes would allow licensing of a company that is under indictment or found liable for illegal activity, but that system left an opening for companies that have broken the rules to join a poker market that’s going to be tightly regulated by new rules: no underage gambling, no abusive gambling, and efforts to address gambling addiction. Many lawmakers, especially Republicans, aren’t sure those executing such regulation are up to the expectations.

“I’m not opposed” to considering Barton’s proposal, Bachus told the Sun last week. “But if there’s gambling, it has to be regulated.”

Click to enlarge photo

A woman who wants to remain anonymous plays poker online.

The poker lobbyists appear convinced that if anyone can bring conservative lawmakers along, it’s Barton.

“We think he can bring a very strong coalition of conservative-minded Republicans to support it,” said John Pappas, executive director of the Poker Players Alliance. “He’s respected, not only with the more socially conservative, but the more fiscally conservative caucus within the House, and brings a really credible voice to this issue ... because he understands why regulation makes sense, not only from the perspective of a lawmaker, but also that of a poker player.”

Barton said he has gotten a “yellow light” from Republican House leaders to proceed.

“This is not a Republican leadership initiative, but they’re aware of it,” Barton told the Sun. “It’s a sensitive issue, but an issue where there’s a majority consensus in the House and Senate to make this change.”

He’s also got the support of his chief competitors, Campbell and Frank.

“I’m co-sponsoring his (bill), I believe he’s going to co-sponsor mine. If his moves first, I’ll support him,” Campbell said. “The resistance is still there, but I think there are some minds that are more open now than they were last year.”

Frank said: “I’ll go for the broadest bill possible. We have an extraordinary restriction on people’s freedom right now, so I would support the broadest bill possible ... but I would take something over nothing.”

The Nevada delegation appears to be in favor of Barton’s efforts.

Rep. Shelley Berkley told the Sun that when Barton produces a bill, she’ll eagerly sign on.

Shelley Berkley

Shelley Berkley

Dean Heller

Dean Heller

Sen. Dean Heller said he supported the bill in concept and would like to see something move, but that he thinks a poker bill “needs to start on this side (in the Senate), because that’s where it failed last time.”

Last year, efforts to pass Internet poker legalization ran aground when Republicans, led by Minority Whip Jon Kyl of Arizona, said there was “zero chance” the GOP would accept that sort of a package. But in a policy statement this year, Kyl said he would keep a more open mind about poker-only bills, and “consider them carefully as long as they leave in place the broader proscriptions against online betting.”

In the Senate, all eyes in the poker community are on Reid.

If they team up it would be a remarkably cooperative venture for two statesmen so far apart on the political spectrum.

But Barton and Reid have both been in Congress since the mid-1980s and as such, are seasoned statesmen from a more collegial era. The suggestion that they might, as two like-minded opposites, engage in a little classic congressional cooperation, was enough to give Reid a little grin.

“We lost him elsewhere,” Reid said. “But we’ll work with him — and maybe we’ll win with him — on this.”

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