Gaming Law "In the News" ...
A Catania Consulting Group Client Newsletter September 22, 2008
Integrity, Leadership, Experience ...
Frank Catania, Esq. President, former Assistant Attorney General, Director NJ Division of Gaming Enforcement, VP Compliance Players International. frank@cataniaconsulting.com
Gary Ehrlich, Esq. VP, former Assistant Attorney General, Deputy Director NJ Division of Gaming Enforcement. gary@cataniaconsulting.com
Keith Furlong, VP, former Public Information Officer & Legislative Liaison NJ Division of Gaming Enforcement. keith@cataniaconsulting.com
Joseph Kelly, Esq., Associate, Professor of Business Law, SUNY College Buffalo. jkelly@cataniaconsulting.com
Barney Frank Introduces Another Internet Gambling Bill
House Committee on Financial Services Chairman Barney Frank [D-MA], who has previously introduced several bills addressing the legalization and regulation of Internet gambling, has now introduced the Payments System Protection Act of 2008 (H.R. 6870). This bill would direct the US Treasury Department and the Federal reserve, in consultation with the Attorney General, to create a process to define what types of Internet gambling are unlawful to allow the financial services industry to comply with the Unlawful Internet Gambling Enforcement Act (UIGEA). Specifically, the bill would require federal regulators to appoint an administrative law judge to define unlawful Internet gambling activities and conduct an economic impact study on the costs of compliance.
H.R. 6870 joins no less than eight other bills dealing with various aspects of Internet gambling pending in Congress. Of these, none is expected to move before the United States elections in November.
Will 2008 Elections Have Any Effect on US Internet Gambling Policy?
A question being asked in the US and around the world is whether the results of the 2008 presidential and congressional elections in the US have any effect on existing US Internet gambling policy. Although your guess is as good as ours, some things are clear. Because neither the Democratic nor the Republican Party is likely to gain a veto-proof (2/3) majority in either the Senate or House, any change of legal approach regarding Internet gambling in the US will probably depend on who is elected President.
A “plank” of the Republican Party platform specifically addresses Internet gambling, and states: “Millions of Americans suffer from problem or pathological gambling that can destroy families. We support the law prohibiting gambling over the Internet.”
Although nominees sometimes take positions different from the party platform, there is no incentive for John McCain to do so on an issue which is important to conservative members of his own party. So if McCain is elected, there is little hope for change in United States prohibitionist policy.
By contrast, neither Barack Obama nor the Democratic Party platform has adopted any position regarding online gaming. Therefore, an Obama administration – with a Democratic-controlled Congress – might be willing to go so far as supporting the Internet gambling study bill (H.R. 2140). But a substantive change in US Internet gambling policy still appears to be years away.
Insofar as the future UIGEA is concerned, because its lack of clarity and the opposition to its implementation by the influential financial services sector some clarification or modification is possible if Obama is elected and Congress remains in Democratic control. Change is unlikely if McCain is elected, since UIGEA was a Republican initiative in the first place.
As for the regulations proposed under UIGEA, the difficulties with them have been well-publicized. An initial draft was issued late and received a very hostile reception, both from the financial services sector and from Congress itself. The main criticism was that the regulations did not define what constitutes “unlawful gambling,” they merely transferred responsibility to banks and other financial services providers to figure it out and prevent related financial transactions. The draft regulations were later withdrawn with the promise that new regulations would be issued by the end of 2008.
If McCain is elected, the UIGEA regulations will likely be reissued without much change, despite the opposition. But if Obama is elected, and the Democrats retain control of Congress, the UIGEA regulations may be delayed, modified or killed completely, by one or more of the pending bills.
Frank Catania Appointed by Kahnawake Gaming Commission To Serve as Independent Monitor/Investigator of Parent Company of Absolute Poker and Ultimate Bet
Following a cheating scandal involving two of its licensees, Absolute Poker and Ultimate Bet, the Kahnawake Gaming Commission (KGC) appointed Frank Catania – President of Catania Gaming Consultants – to serve as an independent monitor to investigate the parent company of the licensees. It will be the monitor’s function to conduct a full forensic audit/investigation of the online gaming business of both licensees to ensure that the games being offered to the public are fair. The monitor must also verify that anyone involved in any fraudulent activities has been, or will be, removed from the companies, and that the companies are in full compliance with all directives issued by the KGC and recommended by the monitor.
Professor Kelly Authors Article on Fantasy Sports
UIGEA contains an exemption for fantasy sports, which has achieved significant popularity as a form of online entertainment. Nevertheless, fantasy sports raises a number of both federal and state legal issues. These issues, together with some background and history, are addressed in a recent article authored by Professor Joseph Kelly, an Associate of Catania Gaming Consultants. The article, entitled “Living in a Fantasy,” can be found at 12 Gaming Law Rev. & Economics 310 (2008).
