Financial Services Committee Approval a First, Washington Insider Says

Although the Payment Systems Protection Act was vehemently disapproved by some House Financial Services Committee members, one insider saw yesterday’s 30-to-19 vote in favor of sending the act in front of the full House as a positive step.

The newly approved bill, HR 6870, which was revised by the committee's chair, Barney Frank, takes online sports betting completely off the table and leaves all other forms of gambling for the Treasury Department and Federal Reserve Board to define.

J. Daniel Walsh, an Internet gambling lobbyist, saw the bill's passage as a good step and said it was the first time a committee has voted affirmatively for anything supported by the Internet gaming industry.

“I think it sends a good signal to the people writing the UIGEA rules -- how the committee wants them to proceed,” he told IGamingNews by telephone this morning. “It sets the table for next year.”

Mr. Walsh, the director of governmental affairs at Greenberg Traurig in Washington, D.C., reiterated that there’s no room to be confused about the legality of online sports betting since sports betting is illegal everywhere in the United States except Nevada. Although he doesn’t agree with the law, he said the addition of immediately clarifying online sports betting as illegal to the bill was an appropriate step by Mr. Frank.

Spencer Bachus, the committee's ranking Republican member and an opponent of the bill, mentioned during yesterday’s markup that sports leagues are not in support of the bill. In response to his assertion, William L. Clay, a Missouri Democrat, said he found it puzzling that professional teams were against the bill.

However, Mr. Walsh said sports leagues want a list that clarifies things for the banks but not an exclusive one.

“They want the banks to have to establish policies and procedures as well,” he said. “So, I think the position of the leagues is that (the bill) moved in the right direction, but it didn’t move far enough for them.”

As far as the banks' position on the bill, Peter E. Garuccio, a spokesperson for the American Bankers Association in Washington, said they haven’t taken an official position on the legislation.

“Our concern remains -- as it has always been -- that if they’re going to promulgate these regulations, it’s important to ensure that they are not overly burdensome on the banking industry,” Mr. Garuccio told IGN by telephone yesterday afternoon.

Looking toward the future, Mr. Walsh said he doesn’t know what the implications are at this point of the bill moving to the full house. He said there is not a lot of time left in this year’s session though there’s been talk of a lame duck session in November.

“I think the dust has to settle a little more before we can figure that out,” he added. “Whether it’s something that happens this year or something folks try to do next year.”