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AGA Can't Decide its Position on Internet Gambling


by Hillary LaClair, Senior Editor

                The prospect of legal online casino betting has had land gambling establishments tearing their hair out over the past couple of months. With the upcoming administration, internet gambling is back on the agenda, and the American Gaming Association is rushing to clarify its position.

                There are mixed feelings within the land industry as to the benefits of legalized internet casino wagering. There are some companies who support the idea of a federal regulation in online gaming, others that feel the authority to legalize egaming should lie with the states and other who fear the industry altogether as another rival with which to compete.

                The leading casino members, MGM Mirage, Harrah’s Entertainment and International Game Technology have already expressed their support for online gaming. These companies already have their feet in the door, having been involved with overseas internet gaming owners.

                The American Gaming Association as a whole has shown a more conservative outlook on internet gambling, calling for research into its regulation, benefits and disadvantages. In the recent Las Vegas Gaming Expo, it was said that internet gambling will begin to look promising for the federal government, as tax revenue could help our fading economy.

                Because the AGA’s members cannot come to an agreement on the issue, the association has initiated a study group which will analyze bills that have been proposed in the past year.

                The latest bill passed in favor of internet gambling was S 3616, the most progressive of proposed legislation in the way on internet gambling. Senator Robert Menendez’s proposal seeks to license internet gambling when it entails games of skill, such as poker.

                Before that, Representative Barney Frank pushed for HR 6870, a bill that would ensure that the UIGEA does not cause harm to the payments system. Frank has also proposed HR 5767, a bill which would prohibit the Secretary of Treasury and the Board of Governors of the Federal Reserve System from proposing, prescribing or implementing any regulation under the UIGEA. Finally, Frank is responsible for the proposal of H.R. 2046, an amendment which would provide the licensing of internet gambling facilities by the Director of the Financial Crimes Enforcement Network.

                Other legislation includes HR 2140, a proposal for the National Academy of Sciences to study and identify the proper response of the United States in the growth of internet gambling, HR 2067, to amend the International Revenue Code of 1986 to regulate internet gambling, HR 2610, to amend to UIGEA to clarify the applicability of provisions to games of skill, and establish certain requirements with respect to such games, HR 6501 to regulate internet gambling and set a trust fund for its tax proceeds, and finally HR6663, which would further clarify what the UIGEA deems as “illegal internet gambling.”

                This is not the first time that the AGA’s members have disagreed on a policy. In 1990, members were torn as to whether or not they should support gaming movements by Indian tribes that were involved with Las Vegas Casinos. The Nevada Resort Association, and later the AGA, decided to remain neutral.