The New US Online Gambling Bill

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The Republican Representative Peter King finally introduced his Internet Gambling Regulation, Consumer Protection and Enforcement Act of 2013 in the House late last week. In contrast to some of the earlier federal attempts that covered only online poker, the King bill covers the legalization of all online gambling verticals, except sports betting. Experts opine that this will increase opposition to the bill.

The King bill refers to the US Department of Justice’s policy switch in December 2011 when it conceded that the Wire Act applies only to online sports betting. This led to a number of US states like Delaware, New Jersey and Nevada legalizing online gambling. King said that his bill has taken into account the various reasons why the earlier online gambling attempts failed and incorporated provisions to take of the objections.

King pointed out that a common federal online gambling standard “will ensure strong protections for consumers, protect against problem and underage gambling, and make it easier for businesses, players, lawmakers and regulators to navigate and freely participate”. According to him state by state legalization was a piecemeal approach that would lead to conflicting or inconsistent laws from state to state, different levels of consumer protection and regulators adopting the least stringent standards to attract online gaming operators and revenues. However, King has been sensitive of the states’ rights, and has included provisions that enable individual states and tribal groups to opt out of the federal solution if they so desire. King has even formulated processes for drawing states like Nevada, Delaware, and New Jersey into the federal framework.

The bill proposes the creation of an Office of Internet Gambling Oversight within the US Treasury Department that will impose uniform safeguards against underage and compulsive gambling and monitor and regulate interstate online gambling. The oversight authority will impose stringent penalties on unlicensed operators with the objective forcing them to shut down. However, presently operating illegal offshore sites will be allowed to exit after they have paid off all players’ dues. The Internet Gambling Oversight will also act against money launderers and criminals using online gambling to move funds.

There are other attempts being made to legalize some forms of online gambling. Representative Joe Barton from Texas is preparing his second online poker bill for submission to the House at the end of June. Nevada Senator Harry Reid is working on a third attempt at legalizing online poker. Morgan Stanley has predicted that by 2020, online gambling in the USA will generate as much revenue as Las Vegas and Atlantic City land casinos combined, which is about $9.3 billion. The initial reaction from industry experts is that the states have progressed too far ahead on regulated intrastate online gambling for them to support federal control.

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