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AGA Promoting Federal Online Gambling Regulation

Wednesday January 8,2014 : A.G.A. STARTS 2014 BY PROMOTING FEDERAL ONLINE GAMBLING REGULATION
 
CEO publishes op-ed article in Washington political newspaper.
 
American Gaming Association CEO Geoff Freeman has kicked off 2014 with an op-ed article in the Washington DC publication The Hill promoting the idea of federally legalised online gambling.
 
Freeman's plans for a more proactive approach to online gambling are unlikely to sit well with one of his most powerful AGA members, Sheldon Adelson of Las Vegas Sands, who has vowed to spend whatever it takes to ensure that online gambling is not legalised in the United States .
 
In his article, Freeman writes that online gambling is a pressing issue that affects millions of American consumers, major businesses and the U.S. economy.
 
"With so much at stake, I recently testified before the House Committee on Energy and Commerce (Subcommittee on Commerce, Manufacturing, and Trade) to deliver a clear message: the attempted prohibition of online gaming simply does not - and will not - work," he asserts.
 
"Last year, before a single state legalized online gaming, Americans spent nearly $3 billion - or nearly 10 percent of the entire worldwide online gaming market - on illegal, unregulated offshore gaming sites.
 
"In other words, prohibition has succeeded only in creating a thriving black market that places consumers at risk," the AGA chief claims, adding in a possible reference to Adelson's opposition that "...the failed attempts to squeeze the Internet back into the bottle from which it came prevent law-abiding U.S. companies from innovating and prevent states and localities from creating jobs and reaping much-needed tax revenue."
 
Freeman goes on to quote stats showing that New Jersey's newly regulated market is proving popular, and notes that mobile gambling is soaring, with estimates that 100 million individuals will gamble on their mobile devices by 2018.
 
"The writing is on the wall," Freeman claims. "The encroachment of the Internet cannot be stopped and neither can consumer demand. Anyone who doesn’t believe that online gaming is here to stay should ask Blockbuster if streaming movies online was merely a fad.
 
"The simple question that policymakers must answer is: Are we going to regulate online gaming or pretend that we can wish the Internet away?"
 
Freeman suggests that oversight and a strong regulatory regime can achieve the following key goals:
 
* Protect consumers from unscrupulous operators and fraudulent games;
 
* Shrink the unregulated black market and provide for the safe, controlled, pragmatic development of the regulated transparent market; and
 
* Provide law enforcement agencies with a willing partner for cracking down on underage gambling, criminal activity and illegal operators.
 
"Congress has the chance to enact strong regulatory standards that provide a uniform set of protections for consumers while respecting states’ rights to choose what is in their best interests," the AGA chief urges.
 
"The technology exists now to allow regulated online gaming that can preserve the integrity of the games to protect consumers, prevent underage play, promote responsible gaming, and provide law enforcement officials the tools they need to identify fraudulent and criminal activity."
 
The article closes with an observation that many nations around the world are already and effectively using existing technology to protect online gamblers, and claims that if and when the United States decides to join these nations, there is potential to generate over $26 billion in tax revenues and create 22,000 American jobs.
 
"Responsibly extending gaming into the online world is a natural progression," Freeman asserts. "Millions of Americans are already gambling online illegally and will continue to do so - no matter how many times governments try to prohibit it.
 
"Instead of benefitting shady offshore operators through pretend prohibition, American consumers deserve an online gaming market that is safe and well-regulated."
 
Interestingly, the AGA chief does not follow past Association editorials in promoting legalised online poker in isolation - his article appears to embrace an appeal for federal legalisation of all online gambling.
 
In related news, four American private individuals have chosen this week to use a press release agency to disseminate their strong anti-online gambling legalisation views.
 
The motive behind this private initiative is unknown, but it involves some avowed opponents of online gambling and could be associated with Adelson's campaign. Those involved are:
 
* Michael K. Fagan, career federal prosecutor and post-9/11 anti-terrorism coordinator active in investigating and prosecuting illegal offshore online commercial gambling enterprises;
 
* Earl L. Grinols, distinguished professor of economics at Baylor University, former senior economist for the President's Council of Economic Advisers;
 
* Jim Thackston, software engineer with a background in the aerospace, manufacturing and energy industries;
 
* John Kindt, Professor of Business and Legal Policy, University of Illinois, Senior Editor, U.S. International Gaming Report.
 
The main thrust of the group's press release is a reprise of a letter allegedly sent to Congress by the Federal Bureau of Investigation in September last year, which apparently contained the usual dire but unsubstantiated warnings of the potential for terrorists to launder money through online gambling.
 
They quote from the FBI letter:  "Transnational organized crime (TOC) groups might exploit legal online gambling to generate revenue, steal personally identifiable information (PII), and engage in public corruption," before going on to put their own spin on the evils of online gambling and their opposition to its legalisation.
 
This includes a claim that they have personally confirmed that it is possible for a person in Pakistan to fraudulently access and play on an unspecified system in New Jersey.
 
"We know because we have done it. Despite what the poker websites and online gaming activists claim, this science is irrefutable and has been peer reviewed by top computer experts and law enforcement," the group's statement claims, linking this to a reference to professional poker player Brian Hastings and an online poker game with an unidentified Swedish adversary which sounds very like Hastings et al's clash with Viktor Blom some years ago.
 
The group claims that in that encounter it was possible for the players to internationally transfer $5 million in a matter of hours, and conflates that to the possibilities of a terrorist organisation using the same modus repeatedly to move money around.
 
That of course ignores the real manner in which money is handled through high stakes games by a limited number of players on a very small selection of major online poker sites.



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