US Law Roundup - May 2007

4 May 2007

Staying on top of interactive gambling bills as they move through the United States' federal and state legislatures no longer entails hours of research, thanks to this monthly update on U.S. state and federal legislation.

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State Legislation

New York: A3434

Summary - A3434 would amend sections 225.00 & 225.15 of the New York penal law and add SS225.45 & 225.50 as it relates to possession of electronic or computerized gambling records and computerized gambling. The bill aims to prohibit the use of computer systems or storage media, including the Internet, in furtherance of illegal gambling or possession of gambling records.

Status - The measure was introduced on Jan. 27, 2007 by Rep. Sam Hoyt and referred to the Committee on Codes.

Outlook - This bill is similar to S66, which is also currently in Codes. An industry legal expert suggested that once a bill is referred to Codes, it has a good chance of passing.

New York: S66

Summary - S66 would amend section 225.00 of the New York penal law as it relates to gambling over the Internet within provisions of law relating to gambling offenses. The amended sections would include "Advance gambling activity," which includes persons that aid in the advancement of an illegal gambling activity, including Internet gambling.

Status - The measure was pre-filed on Jan. 3, 2007 by Sens. Frank Padavan, Mary Lou Rath and Dale Volker, and referred on Jan. 23 to the Committee on Codes, often the most powerful committee in any state legislature.

Outlook - The Committee on Codes is chaired by Sen. Volker, whose presence gives the measure a good chance of passing. An industry legal expert said because S66 was given a first and second reading and immediately referred to Codes, it is likely about to pass.

New Jersey: A995

Summary - A995 would authorize licensed land-based casinos in New Jersey to offer their games via the Internet.

Status - Sponsored by Assemblymen Vincent Prieto and Neil Cohen, A995 is the latest version of a bill that has appeared in the state's last three legislative sessions. A995 was introduced on Jan. 10, 2006 and referred to the Assembly Tourism and Gaming Committee. It has not moved since.

Outlook - Unlike a similar I-gaming bill that passed Nevada's legislature in 2001, this bill, in its three previous manifestations in New Jersey, has failed to garner much support among legislators and casino operators.

New Jersey: S1106

Summary - Senate Bill 1106, authored by Sen. Richard Codey, is identical to Senate Bill 1013 of the 2004- 2005 legislative session and Senate Bill 2376 from the 2002-2003 session, which Codey also authored. The bill broadens the definition of illegal gambling to include Internet gambling and voids credit card debt incurred through illegal gambling. The bill also includes a clause establishing that only the state may sue to recover gambling losses.

Status - The bill was introduced and referred to the Senate Wagering, Tourism & Historic Preservation Committee on Jan. 26, 2006 and has not moved since.

Outlook - Codey became president of the Senate last session, so it would seem that any bill with his name on it ought to be taken somewhat seriously. Nonetheless, the same bill he authored in 2004 didn't even make it out of committee.

Federal Legislation

HR 2046 - The Internet Gambling Regulation and Enforcement Act

Summary - HR 2046, authored by Rep. Barney Frank, D-Mass., proposes not to repeal the Unlawful Internet Gambling and Enforcement Act (UIGEA), but to defend companies against it. The UIGEA would remain in place, in that banks and credit card companies would still be prevented from doing business with illegal online gaming operators, but HR 2046 proposes a federal licensing and regulation regime for offshore Internet gambling companies that would be overseen by the Financial Crimes Enforcement Network.

Status - The bill, introduced on April 26, was referred to the House Financial Services Committee, of which Frank is the chair, and the House Energy and Commerce Committee. Frank said he expects the bill to come up for debate sometime in June.

Outlook - Frank, who is also chairman of the House Financial Services Committee, has said that he would not put the legislation to a House vote unless he knew he could win. At last count, Frank estimated his legislation had at most 130 to 140 votes out of 435 in the House.

HR 2140 - The Internet Gaming Study Act

Summary - HR 2140, introduced by Rep. Shelley Berkley, D-Nev., proposes a one-year study on Internet gambling to be conducted by the National Research Council, a branch of the National Academy of Sciences.

Status - Berkley submitted HR 2140 late on May 3 and it was referred to the Committees on the Judiciary, House Financial Services, and Ways and Means.

Outlook - HR 2140 is backed by the American Gaming Association, which has long called for this type of study. One industry exert said that this study could go a long way in getting Congress to take Frank's bill seriously.