Poker Law Debate -- Coming Soon to Capitol Hill

While representing Massachusetts’ 4th District for nearly 30 years, Barney Frank has emerged as one of the most powerful and recognizable politicians in Congress. After the Democrats took majority control of the House of Representatives in 2007, he became the chairman of the Financial Services Committee, which oversees the housing and banking industries — the latter of which is particularly important in the fight for the regulation of online poker.

Now, nearly three years after one law rocked the poker industry, Frank is leading the charge to repeal that legislation and explicitly legalize and regulate online poker for good. He calls being able to play poker online a “personal freedom” and an issue of “people’s liberties.”

The original law, of course, was the Unlawful Internet Gambling Enforcement Act (UIGEA) — a name with which poker players are familiar. It was passed by Congress on Sept. 30, 2006, as a last-minute attachment to the SAFE Port Act, a must-pass piece of legislation to increase the security of U.S. ports.

The UIGEA made it illegal for banks, credit-card companies, and payment processors like PayPal to transfer funds from potential customers to online casinos, and vice versa.

Even though the law didn’t ban the playing of online poker, the negative effects it had on the poker industry are incalculable. It forced many legitimate gaming companies to pull out of the U.S. market entirely. It created difficulties for customers to make deposits to or withdrawals from poker sites, undoubtedly driving many of those potential players away from the game. It put a cloud over the industry, as companies and players wondered just how far the government would go in enforcing this law.

Fortunately, many poker players have fought back and have welcomed allies in Congress to their effort to repeal the UIGEA. More than a million people have joined the Poker Players Alliance [PPA], the nonprofit membership organization with the mission of establishing favorable laws that provide poker players a secure, safe, and regulated place to play.

Besides Frank, several members of Congress — including Sen. Robert Menendez (D-N.J.), Rep. Jim McDermott (D-Wash.), Rep. Shelley Berkley (D-Nev.), Rep. Pete Sessions (R-Texas), and Robert Wexler (D-Fla.) — have introduced poker-related bills, most of which were to repeal or clarify the UIGEA. Unfortunately, facing opposition from the religious right as well as sports leagues that feared that these bills would allow rampant online gambling on their games, none of these bills ever made it to a vote.

Frank believes that this time will be different.

With the current somber economic situation, he believes that many people will open up to the idea of online poker regulation once they realize how much revenue it can bring in. A recent PricewaterhouseCoopers report estimated that regulating and taxing online poker could generate $52 billion over the next 10 years.

Frank, in an interview with Card Player on April 9, spoke about his plans to introduce the newest poker bill. With a Democrat-controlled Congress, a new president, and a stronger and more influential PPA, there has perhaps never been a better time for such legislation. Frank discussed the bill and the likelihood of it becoming law.

Card Player: What can you tell us about this upcoming poker bill?

Rep. Barney Frank: I was appalled when my colleagues took it upon themselves in the original bill to tell adults they couldn’t play cards, whether or not it’s on the Internet. I was angry that it was slipped into an overall bill at the end by Sen. [Bill] Frist; although it did pass the House, I think a lot of people voted for it, thinking, “Oh, well, this isn’t going to go anywhere.” Then Frist, in his effort to be president, put it in there.

This is a big thing for religious conservatives. There’s probably something in the Bible that says, thou shalt not gamble; I missed that part. And I also missed the exception for bingo.
 
And I think my friends on the left weren’t consistent; they said, well, this is bad for the poor people, and they decided to be nannies to the poor people. When I became chairman of the committee, I tried to get rid of it. We finally got to the point, thanks to a lot of the people whose rights are being taken away by this, where we’re ready to vote for it.
 
At first, I tried to simply block the regulation that was making the banks the task force on this; the Bush administration pushed that through at the last minute. What I now want to do is introduce a bill that will repeal it — and, frankly, the federal government could use the money right now to pay for important public means.  
My view is that this shouldn’t be excessively taxed, not taxed out of existence, but like any other legitimate activity, it could be subject to a small percentage of taxation — but the committee I chair isn’t in charge of that. I just want to repeal it, because I think it’s an intolerable way to limit people’s liberties.
 
CP: What’s different about the bill that you’re going to propose compared to your 2007 bill regarding this?
 
BF: There won’t be a lot of difference. It will simply be to repeal it. You do have to have some protections against underage people, so it’s essentially the 2007 bill with some minor tweaking here and there, making it a little better.
 
CP: What’s the timeline on the bill?
 

BF: We’re going back from congressional recess the last week of April. I’m going to introduce it then, and I hope in May or early June to have hearings on it and try to move it to the committee.
 
CP: And why won’t you include this as part of must-pass legislation, like the UIGEA was passed?
 
BF: Well, that wasn’t an appropriate practice. It was a mistake for Frist to do it. I would rather not do it that way; I’d rather go through the Democratic process. It is true that’s the way it was put in, so in the end, if that’s the only way to do it, I think it would be justified, but I would rather try to do it the appropriate way.
 
CP: Will this bill address where the revenue generated from the regulation of online poker will go?
 
BF: No. Whether or not it’s taxed and where the tax revenue would go would be for a separate committee — the Committee on Ways and Means. It’s true that we’ll be able to make some money off it, but that’s not what’s driving me. What’s driving me is, why the hell is it any of my business if somebody wants to gamble on the Internet? It’s an intrusion on personal freedom.
 
CP: Do you think you have enough support to get this through the House?
 
BF: I’m mildly optimistic about it now, yes.
 
CP: I read an article saying that it’ll be much tougher to get it though the Senate than the House. Is that true?
 
BF: Well, it’s tougher to get anything through the Senate, but you begin where you begin.
 
CP: In your opinion, who are the major opponents and what are the obstacles to the bill?
 
BF: Well, in the very conservative realm of the country, religious people think gambling is a terrible sin. There’s a great quote about Puritanism by H.L. Mencken: “The haunting fear that somebody, somewhere, might be having a good time.” They think it’s immoral; they need to explain what moral code it breaks, as I cannot figure it out. 
And then some of my friends on the liberal side say, “Oh, well this is bad because now there’s more ways for people to spend too much.” And my answer is: Look, don’t tell them how they should spend their money.
 
There are people in the House who have had relatives with compulsive gambling problems, and that’s what motivates them. But we have compulsive alcoholics. We have to recognize that there’s a small percentage of people who will become addicted in a lot of legitimate activities, but we don’t ban the whole activity; you deal with the addiction.
 
CP: What are your thoughts on Congressman McDermott’s bill? Do you support it?
 
BF: He’s on the Ways and Means Committee, so he’ll deal with the tax piece of it.
We haven’t studied it as much together. I think he’s going in the right direction, but I haven’t focused on it fully.
 
CP: The European Union recently criticized the U.S. for its gaming policies. Do you agree with that criticism?

BF: Yes, we’re in violation of the World Trade Organization. A lot of conservatives are being very hypocritical about this. When it comes to trade generally, they say that even if it costs Americans jobs, we have to live up to our trade obligations. But this is a violation of our obligations under the World Trade Organization. George Bush said that we must abide by those, except in this instance.
 
My main motivation is to take the government out of private lives.
 
I hope that everyone will write to his or her member of the House and tell them to vote for it. That way, we’ll get it passed.
 
CP: What do you think would be a realistic timeline for it to reach the House floor for a vote?
 
BF: Probably not until September, because when we come back, we’ll be working with the appropriations bill. I don’t mind that, because it gives more people chances to write to their representatives.

Poker Players Everywhere — Unite!

Congressman Barney Frank and the Poker Players Alliance [PPA] have worked diligently to craft a bill that will finally repeal the UIGEA. But that bill won’t go anywhere without everyday poker players taking up the fight.

“The best thing for the poker community to do now is to rally behind Congressman Frank and his bill,” said John Pappas, the executive director of the PPA. “You need to make sure you tell your congressman or congresswoman how important this bill is to you.”
Write to your representatives today. Let them know that you demand the freedom to play poker wherever you like, whether that be at your kitchen table or online. Let them know how much this bill means to you, and how much you look forward to seeing them vote it through.

You can find out the location of your representative’s office and his or her e-mail address by going to www.house.gov/writerep. All you need to do is enter your home state and zip code. The PPA’s website, www.pokerplayersalliance.org, also provides quick and easy access for those who want to write their members of Congress.
“We don’t want this bill to be introduced in a vacuum,” said Pappas. “We want it to be introduced in an echo chamber.”

The PPA is arranging several grassroots campaigns in the coming months, including letter-writing and phone-calling efforts. The organization is also planning on flying PPA state directors and professional poker players from around the country to Washington, DC, in July to convince lawmakers of the necessity of Frank’s bill.