AGA Calls for US Congressional Study into Impact of I-Gaming

27 April 2006

The American Gaming Association (AGA), a group that represents the commercial land-based casino entertainment industry in the United States, has modified its legislative position on Internet gambling and now strongly supports the creation of a one-year congressional study commission that would evaluate the impacts of online gambling.

The association stresses that while it would like to see a study performed on relevant issues, it remains neutral on the pending bills introduced by Reps. James Leach, R-Iowa, and Bob Goodlatte, R-Va.

The decision to support a comprehensive study was reached by the AGA's board of directors at a meeting Wednesday night. The AGA envisions that such a study would research policy issues ranging from how to best protect children and problem gamblers to whether Internet gambling can be effectively legalized and regulated in the United States.

"We're not going to introduce a bill, but we will be supportive of such a bill if it is introduced," AGA President and CEO Frank Fahrenkompf, Jr. said. "Clearly there is no time for that bill to be introduced in this session of Congress--there's only about 45 days left--but we would be hopeful that in the next session one of the first things before anyone runs off and introduces other legislation is that they would take a look at this."

Fahrenkompf emphasized that in calling for such a study, the AGA is not stating that it favors the legalization of Internet gambling in the United States.

"We're saying, 'Let's have a look here.Let's see what the technology now is,'" he said. "For 10 years we didn't think the technology existed to properly regulate it, but we think there have been great advancements in technology, and that you can in fact come up with means to make sure that bets aren't coming in from jurisdictions where its illegal and that there are now technologies to prevent underage people from gaming. So let's take a hard look at this before we run off and do things."

A bill that appears to be similar to the one the AGA would like to endorse was introduced to the last Congress by Rep. John Conyers, D-Mich., in March 2003 but went no further than a hearing before a House Judiciary subcommittee.

Conyers' HR 1223, The Internet Gambling Licensing and Regulation Commission Act, would have created an official committee of Congress equipped with the power to issue subpoenas and to invite testimony. Such a commission would have likely heard evidence from a broad spectrum of interested parties, ranging from regulators in Nevada and Britain, to technology firms, gambling operators and organizations that oppose online gambling. The commission would have been composed of five individuals selected by the majority and minority leaders of both the House and Senate.

The AGA has suggested than one year could provide ample time for such a commission to gather enough information to report to Congress. It would also like the commission to consider the recent WTO ruling that states that American policy on Internet gambling is a violation of international trade obligations.

While the AGA believes that it is necessary for Congress to thoroughly study issues relating to online gambling, it will apparently not fight against the efforts of certain Republican legislators who have introduced bills to ban offshore remote gambling.

Said Fahrenkompf, "We're not opposing Leach because the important thing you have to remember is that the legislation that is there now is aimed at illegal Internet activity. Leach, and particularly Kyl--although Kyl hasn't introduced his bill formally--talk about not defining what is illegal but leaving it to the courts to define what is legal.

"So even if Internet gambling were to be legalized in the U.S., we would be opposed to offshore, unlicensed, unregulated Internet activity. It would have to be prevented somehow, and it may be that the Leach and Oxley approach is the only way to do it. That's why we feel the study commission is necessary."

Some companies in the online gambling industry, including BetOnSports Plc and PartyGaming Plc, received a small boost in share price today on the back of the AGA's position change.

Bradley Vallerius

Articles by Bradley P. Vallerius, JD manages For the Bettor Good, a comprehensive resource for information related to Internet gaming policy in the U.S. federal and state governments. For the Bettor Good provides official government documents, jurisdiction updates, policy analysis, and many other helpful research materials. Bradley has been researching and writing about the business and law of internet gaming since 2003. His work has covered all aspects of the industry, including technology, finance, advertising, taxation, poker, betting exchanges, and laws and regulations around the world.

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