US poker ban to be lifted this week?

When the industry gathered in Las Vegas last month for the Global Gaming Expo, one of the most notable things was the chairing of the opening session in the iGaming track by Frank Fahrenkopf Jr, the president of the American Gaming Association, an organisation that has in the past been a visible obstacle to any such developments. This was an illustration of how far the debate has come.

However, equally notable was the lack of consensus on what form if, indeed, any, online gaming regulation in the US would take and when it might arrive. While we are all familiar with the developments in New Jersey and the potential in California and Florida, on a federal level the industry has continued to send positive thoughts to the legislation proposed by Barney Frank, which www.GovTrack.US has indicated has been listed for debate twice in the current lame-duck session.

Rumoured since September to have been bubbling under, however, was a potential Federal bill to regulate online poker. The recently re-elected Senator Harry Reid (D-NV) is apparently behind this and owes an element of his re-election to the Las Vegas casinos. He needs to swiftly pay them back for the assistance they gave and one of the ways he can do this is to ensure that any federal online poker system is regulated by the Nevada Gaming Commission as the only supposed body with a capability for performing such a task. The draft bill doing the rounds does not explicitly refer to the NGC, but reading between the lines, one might infer this is the intention.

This would give the Nevada casinos a head-start in any federally operated system and potentially keep out the European competition, at least on the B2C, side, yet still allowing B2B partnerships as the US make use of the skill-sets honed in Europe since UIGEA. With a matter of days remaining of this Congress, we do not have long to wait to find out if Reid succeeds in attaching legislation seeking to regulate online poker to the back of a federal tax bill. Such a somewhat surprising method of enacting legislation was used in 2006 when UIGEA was attached as a schedule to a bill governing port security, apparently unbeknown to a number of those who voted through the headline legislation.

What a federal piece of legislation would mean for the state systems being promoted in California, New Jersey and Florida remains to be seen, although the draft we have seen would not allow states to opt-out of the federal system whilst retaining an intrastate system of their own. There is more than just gaming policy at play here – any opt-out mechanics play into the hands of the federal/state power debate that has always been at the forefront of US politics.

We shall wait and see what happens in the coming days, although with increasing reports of opposition to Reid’s attempts, a rapid end to the prohibition may still be some way off.