Inside Straight -- News

Report Estimates Online Gambling Could Bring in $42 Billion
New Congressional Study Shows Financial Implications of Regulation
By Stephen A. Murphy

A new congressional report estimates that the regulation of Internet gambling could bring in up to $41.8 billion in revenue in the next 10 years. Rep. Jim McDermott (D-Wash.), one of the co-sponsors of Rep. Barney Frank’s (D-Mass.) legislation to explicitly legalize and regulate online gaming, announced the findings of the report by the joint committee on taxation.

“I suspect that many of my colleagues, especially those on the fence, will take more interest in this issue once they see $41 billion available that they can match up with any number of worthy programs,” McDermott said. “I would suspect it’s only a matter of time before Congress appropriately moves to regulate the industry in order to protect consumers and reverse the flow of billions of dollars currently lost offshore as Americans gamble billions online despite attempts to prohibit the activity.”

McDermott has introduced a companion bill to Frank’s legislation, which would raise money for the U.S. Treasury through taxes and license fees on Internet gambling companies.

Michael Waxman, a spokesperson for the Safe and Secure Internet Gambling Initiative, said that he expected the report would “encourage immediate interest in this issue on Capitol Hill, as they struggle to pay for health care and other government programs.”

Frank’s bill seeks to reverse the Unlawful Internet Gambling Enforcement Act, which forces banks to monitor and block all unlawful wagering transactions with debit and credit cards online. The UIGEA, however, does not identify which forms of wagering are unlawful.

WPT Enterprises Sells to Peerless Media
Peerless Media Succeeds Despite Third Offer
By Rebecca McAdam

World Poker Tour Enterprises has closed its deal with Peerless Media, a subsidiary of PartyGaming, fully agreeing to sell nearly all of its substantial assets — other than cash, investments, and certain other assets — to the company.

Despite a third offer, from Mandalay Media in late October, in which the company offered to pay roughly three times the amount that Peerless Media was offering, WPT Enterprises decided that it was not a “Superior Proposal,” and went with Peerless in the end.

Peerless Media will pay WPTE $12.3 million in the deal, as well as 5 percent of the company’s future gaming revenues — a total equal to at least an aggregate of $3 million in the three years following the close of the deal.

The World Poker Tour was originally sold to Gamynia Limited for $9.1 million in August, but it was bought out of that arrangement when the Peerless bid came through.

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