Fahrenkopf, Goodlatte at Odds

31 January 2002

In a move that could spell trouble for a bill that seeks to ban Internet gambling in the United States, the land-based gaming industry's most prominent lobbyist said Wednesday that he isn't sure the Goodlatte bill is the best way to handle online gaming.

The American Gaming Association (AGA), through its chief Frank Fahrenkopf, told congressional leaders that it doesn't like the way the bill targets online casino and sports books but still allows for online horse betting.

Fahrenkopf told the Las Vegas Review Journal that the AGA has yet to take an official stance on the measure, but one could come within the next two weeks. Fahrenkopf wasn't in the office today when called for additional comments, but if what he's said so far is any indication of things to come, the AGA may be willing to fight the Goodlatte bill.

"The majority view in our industry is clearly opposed to Internet gambling," Fahrenkopf said. "But, as I told Congressman Goodlatte, my concern is that his bill seems to side with the horse racing industry."

Fahrenkopf said it's odd that the bill would allow for a person to bet on the horses through a pari-mutuel service based in Las Vegas but not use the Internet to play a progressive slot machine that is tied to a secure system in the same location.

Fahrenkopf's meeting with Rep. Bob Goodlatte, R-Virg., came nearly two months after the AGA sent the congressman a letter expressing its concern over changes in the current bill compared to others in the past that were proposed. In 2000, Goodlatte pushed a prohibition bill that died in the House.

The opposition of the bill marks a reversal of opinion for the AGA. For years, land-based gambling entities have been in favor of shutting down Internet casinos and sports books. That trend started to change within the last year as companies like MGM Mirage and Harrah's made alliances with online gaming suppliers. MGM was awarded a license to operate an online casino in the Isle of Man, but will seek approval from authorities in the United States before launching a site.

Others in the land-based world still see online gaming as a threat and want to see the government put a permanent ban on such activity.

It's that kind of dissention in the ranks that makes Goodlatte feel confident his bill won't face too much opposition from the casino industry.

"He has told me that the vast majority of his members support what we're trying to do," Goodlatte told the Review Journal. "But he's got some who want it to go in a different direction. And I think that's the main quandary he's in. I don't think it relates to the bill itself. It relates to a division within the industry that is primarily in favor of what we want to do."

Fahrenkopf, though, remains adamant that there is no such division among AGA members.

"I haven't told (Goodlatte) there is a division within the industry in any way," Fahrenkopf said.

The House of Representatives has four bills under consideration that could potentially affect the legality of Internet gambling in the United States. Those bills include HR 556, which would stop financial institutions from accepting credit cards, checks or electronic funds transfers as payment for money laundering, and HR 3215 (Goodlatte's bill), which would update the 1961 Interstate Wire Act to specify Internet gambling as illegal.

Goodlatte told the Review Journal that the majority of those who oppose any of the bills are not tied to land-based gaming operations.

"The primary opposition comes from these offshore folks now," Goodlatte said. "The lotteries support the bill; the attorney general supports the bill. Both of those were against the bill in the last Congress in the Clinton administration."