Thursday September 13, 2012 : KYL SPEAKS ON ‘POLITICAL' POKER ROW (Update)
Disagreement will only make the legalization project harder to realise, says the Senator from Arizona
Arizona's Senator Jon Kyl waded in to the Reid vs. Heller argument over the best way to introduce a new online poker legalization bill Wednesday, saying: "The object here should be to pass a bill and not make Senator Heller look bad."
A growing number of media outlets reported that Nevada's Sen. Harry Reid had tried to impose a deadline on his request that Republican Sen. Dean Heller – also of Nevada – muster Republican support for a joint Democrat-Republican attempt to introduce a federal legalization bill on internet poker.
Kyl commented that Heller's suggestion that the bill be introduced to the House of Representatives and not the Senate made sense:
"I am afraid that if the Senate acts first the House will feel itself jammed and it wouldn't go anywhere," Kyl, who has co-authored the bill with Reid, said.
He accused Reid of playing a political game, and that this had made the project harder to achieve.
"Now the thing has blown up. Again, I want to work with Harry Reid to get this done. I regret to say what he has done here is going to make it a lot harder now. Instead of an approach by which we might have been able to bring people along, I think it looks to be what it is, and that is very political.
"It looks like some political hack wrote that letter for Harry. I think he wants to get this done but he must appreciate that letter was going to make it very, very hard.
"I am distressed it has taken the turn that it has. I am very concerned about that now," Kyl concluded.
With the furore dampening hopes that meaningful progress can be made in the limited time remaining in the current session of Congress, details of the Reid-Kyl bill have started to appear across the internet.
In summary, the bill – rather ponderously titled “The Internet Gambling Prohibition, Poker Consumer Protection and Strengthening UIGEA Act of 2012” – appears to propose that:
* The legalization will apply only to online poker and not online gambling in general
* Anti-online gambling enforcement measures are to be stepped up, probably through strengthening the Wire Act and IGBA, both somewhat antiquated pieces of legalization that will benefit from an update. Unsurprisingly, the carve-outs for horseracing will be retained.
* The autonomy of individual states has wisely been respected, with provisions for same to opt out of any federal legalization if a majority in both legislative bodies at state levels is achieved. Tribal groups will only be allowed to opt in to federal legalization if the state in which they are located has also decided to participate.
* Predictably, a new federal government organisation titled Office of Online Poker Oversight (and you can do things with the acronym) will be charged with responsibility for organising licensing and regulation; it will be housed in the US Department of Commerce.
* The new measure will not interfere with the online lottery operations of individual states, but there is a provision preventing them from offering casino/slot style games over the internet as part of the lottery product.
* Internet cafes and international player pools are specifically prohibited.
* There will initially be a two year ‘black period' during which only land-based US casino operators with existing licenses will be considered for online poker licenses, creating a notable market advantage for such operators.
Similarly restrictive arrangements will be available for US industry content, equipment and service providers.
* Online companies which continued to be active in the US market after the 2006 passage of the UIGEA will be excluded for 5 years.
* A federal tax of 16 percent (it is unclear what this will be based on) is proposed, with 14 percent going to individual states and tribes that have opted in. The remaining 2 percent will go to federal coffers to cover the cost of regulation and licensing.
* Financial institutions can expect more complications – the measure proposes that a white list of licensed operators be drawn up, which the financial institutes will be required to use in order to block transactions with non-listed companies.
* Harsh enforcement and punitive measures that include heavy fines and forfeiture measures will be prescribed for unlawful operators.