Tuesday, November 22, 2011 : Giving the politicians something to chew on
Friday's second hearing on internet poker legalization by the House Energy and Commerce subcommittee on Commerce, Manufacturing, and Trade was held on schedule, with a range of for and against testimony being presented by an impressive list of witnesses.
Rep. Frank Wolf, a Virginia Republican was heard first, warning that legalising online poker was not a cure-all for revenue raising, and pointing to research that claimed that the social costs of gambling in terms of addiction outweigh revenue gains by a margin of 3:1.
Wolf talked about Las Vegas suicide rates and the alleged addictive potential of internet gambling, rather dramatically cautioning the committee that Congress would rue the day that internet gaming legalization passed.
Fellow Republican Joe Barton from Texas, who has introduced a legalization bill into this session of Congress, emphasised that his intention was solely the federal legalization of online poker and gave individual states the right to opt out, whilst making provision for well-established safeguards to be required of operators.
The former chairman of the House Financial Services Committee, and Democrat representative from Massachusetts, Barney Frank spoke out strongly for legalization, pointing out to the committee that government is not in the business of dictating to citizens how they spend their private leisure time and resources. He was especially shocked by attempts to restrict the freedom of use of the Internet, he said.
Frank has authored several attempts to legalise online gambling at federal level in order to better protect the US player, but admitted to the committee that if legalised poker was as far as the committee was prepared to go, he would support that.
Frank was joined in supporting legalization by the Republican Representative from California John Campbell, who also gave testimony on the positive aspects of legalising online gambling such as player protection and the raising of tax revenues.
Land gambling regulator Mark Lipparelli, who chairs the Nevada Gaming Control Board, spoke about the state's preparations for federally legalised poker, emphasising the precautions against underage or problem gamblers and measures to exclude criminal activity. Lipparelli stressed the importance of regulatory harmony among the various states exercising their right to control regional poker if the game was legalised at federal level.
Answering one the committee's concerns “can internet gaming effectively be controlled?” Lipparelli outlined the technological capabilities of online software and services to track and record information at transaction level, making it possible for regulators to effectively impose "robust" standards and requirements on operators. He recommended a combination of regulatory control, probity and software testing, compliance programmes and well considered and sensible regulations.
The chief executive of the influential trade body the American Gaming Association, Frank Fahrenkopf, appeared to favour the Barton approach to legalising online poker rather than the broader attempt by Rep. Frank to legalise online gambling in general, but stressed that at this point the Association does not yet endorse any particular proposal.
He said that the AGA policy is that states' rights must be respected, empowering each state to make its own decision to opt in or out of federally legislated and legalised online poker.
Fahrenkopf said the AGA had three priorities regarding internet gambling:
* It must not create competitive advantages or disadvantages between and among legal commercial casinos.
* Native American casinos and state lotteries were concerned that no form of gambling which is currently legal should be made illegal.
* The legalization must respect fundamental states’ rights in an appropriate manner.
Fahrenkopf clashed politely with a responsible gaming expert, Dr. Rachel Volberg from the University of Chicago, claiming that only 1 percent of gamblers become pathological, a statistic that has remained largely constant over long periods of time despite the expansion of the land gambling industry in the United States.
This "contradicts the belief that internet gambling breeds excessive problematic gaming behaviour,” he said.
Dr. Volberg made the rather startling claim (and one that is out of kilter with extensive studies in Europe) that Internet gambling makes players substantially more likely to develop addictive disorders; she recommended that if online poker was to be legalised, there should be provision for a fund of around $50 million to be reserved for problem gambling research.
Charlie McIntyre, the chief of the New Hampshire Lottery Commission was concerned about the competitive potential of internet gambling and its impact on lottery revenues, and reprised the view of other witnesses that the states should retain the right of choice.
The hearing ended without a vote, but chairperson Rep. Mary Bono Mack said that she looked forward to working with the various witnesses should the Barton proposal move forward in Congress. She appeared satisfied, having called for a second hearing to develop more information following the initial presentations to her committee in October