Bill Would Allow Online Poker in the U.S.

Published December 6, 2010

People across the United States would be allowed to play poker on the Internet under a bill being floated by Democrat Senator Harry Reid of Nevada.

Reid’s bill has the backing of the casino and horse racing industries but is opposed by some conservative lawmakers and organizations, including the Southern Baptist Convention, which has long opposed gambling.

Reid has opposed online gambling in the past, as have the casino and horse racing industries, fearing they would lose business to the Internet. Reid’s bill initially would allow only casinos, horse tracks, and slot machine makers to run online poker operations.

‘Banking System Tied in Knots’
“The issue here really isn’t gambling—that’s already legal just about everywhere—but rather, a burdensome regime intended to restrict it,” said Eli Lehrer, national director of the Center on Finance, Insurance, and Real Estate at The Heartland Institute. “Sen. Reid is doing the right thing by moving forward with a bill to legalize online poker, but he should and could go further and sweep away all of the costly, ineffective anti-gambling regulations that have tied our banking system in knots.”

Barrett Duke strongly disagrees. He is vice president for public policy and research for the Southern Baptist Convention.

“We recognize the U.S. has made a decision to legalize some forms of gambling, but we believe it creates significant problems,” Duke said. “It adds to crime and does not eliminate illegal forms of gambling.

‘Lets the Big Boys Control’
“Sen. Reid’s bill favors gambling operations that are already functioning,” he added. “At least at this point someone new could not jump into the game, which means he’s catering to folks who helped get him elected. It’s a crass political move as far as I’m concerned. He’s found a way to let the big boys control the market.”

Reid’s bill would overturn a bill passed in 2006 that bans financial institutions from processing online-gambling transactions. That bill prompted publicly traded companies to stop operating online sites in the United States.

As a result, U.S.-based online gamblers have instead gone to offshore sites. The Poker Players Alliance estimates 10 million Americans play poker on these offshore Web sites.

Reid’s bill would limit online poker operations to existing casinos, horse tracks, and slot-machine makers during the first two years after the bill passes. It would also grant oversight powers to state regulators, which existing casinos and horse race also favor.

Taxes on wagers would go to both federal and state governments.

Even though Reid is Senate Majority Leader, Duke said he doubts the bill will advance there “without any kind of serious study and debate.”

Chasing Tax Money?
On the House side, some Republicans have already announced their opposition, including Rep. Spencer Bachus (R-AL), the ranking Republican member of the House Financial Services Committee.

In a letter to Reid and Senate Minority Leader Mitch McConnell (R-KY), Bachus wrote, “Congress should not take advantage of the young, the weak and the vulnerable in the name of new revenues to cover more government spending.”

Steve Stanek ([email protected]) is a research fellow at The Heartland Institute and managing editor of Finance, Insurance & Real Estate News.