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Flipping the online-gaming switch back on in the US is leaving a lot of people twitchy, both over there and here in Europe. Tom Lippiett assesses the realistic timescale of when that will be—if at all.
In light of the raft of economy-related legislation currently passing through Washington, it was thought by many that the regulation of online gambling was low on the list of the US government’s priorities. While there may be some truth in this, Barney Frank has nevertheless confirmed that he plans to reintroduce his bill to regulate the supply of online gambling in the United States.
Nevertheless, as a member of a new government beset by principally economic concerns, Frank should not be seen as a man with nothing else on his political agenda. While Frank is something of a “champion” of regulated online gambling, it is far from a guaranteed vote winner. It was therefore, perhaps, telling that in a recent run-down of his legislative priorities at a press conference, Frank’s mention of his attempt to repeal and replace the US’s anti-internet gambling regulations was toward the end of his list. Accordingly, while Frank appears to be committed to legislative change, he is clearly not holding himself to any tight timescales. (That said, some reports have suggested that a new Frank bill may reach the US legislature immanently.)
However, even where he forges ahead with his bill, and despite his high-profile status within the Obama government, there is no guarantee that any attempt by Frank to regulate online gambling will be successful.
It’s believed that the Frank bill will focus on a federal structure for the regulation of online gambling. Unsurprisingly, with the onset of the Unlawful Internet Gambling Enforcement Act, US punters have turned to offshore online gambling operators, a number of whom are based in jurisdictions with only minimal compliance requirements. Accordingly, Frank has placed a specific focus on a robust licensing regime that provides appropriate protections against underage gambling, problem gambling, money laundering and fraud.
While there is clearly merit to a well-regulated and nationally consistent policy to online gambling, not least in light of its cross-border nature, there is almost certain to be opposition to attempts to create a national framework for the regulation of online gambling. Notably, such opposition may not necessarily come on the grounds of moral objections but rather something more fundamental to the gambling concept: money.
Under existing legislation, the US has substantial control over the licensing of gambling within their state boundaries and, importantly, they benefit from the revenue that it generates. In the current economic climate, the US is unlikely to willingly concede to a licensing regime that removes this income stream and diverts it to the federal government. It would undoubtedly make for a more transparent and consistent regulatory regime, and therefore be in the interests of players to have a national licensing regime. But the political ramifications of the additional fiscal benefit to the federal coffers—at the expense of the States—may be a difficult hurdle to overcome. That said, such obstacles may be addressed, at least to some extent, by a regulatory regime that the US may elect to opt in or out of and thus choose whether to become part of an overall national gambling regulatory framework, or retain control of such activity themselves.
Nevertheless, it will be interesting to see the specific proposals contained in Barney Frank’s next incarnation of his bill and, should support be forthcoming for it, who exactly will benefit from its provisions.
There are a number of gambling behemoths in the US, although such operators have been noticeably slow in embracing the online sector. That said, if faced with a national licensing regime for gambling, any entity, not least those whose share prices have suffered with the economic downturn, is certain to be tempted by the potential revenue. However, while their “brand power”, through their familiarity with the US public, may benefit the US operators (together with the possibility of preferential treatment by the licensing authorities), the requisite know-how for large-scale online gambling operations almost certainly resides with the European operators. Accordingly, if we do ever see the national regulation of online gambling in the US, the possibility of Euro-US alliances for assaults on the market should not be ruled out.
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