The Winners and Losers of the Internet Gambling Regulation Act

The online gambling industry has given mixed reviews when it comes to Rep. Barney Frank's proposal to regulate Internet gambling in the U.S. Frank's proposal would oblige companies to ensure that their gamblers are at least 18 years old and in a jurisdiction where gambling is allowed.

The licensed companies would have to demonstrate that they are able to combat money laundering, fraud, compulsive gambling, and that they would pay all their taxes. The States and the Indian tribes would have control of gambling in their own territories and the sports leagues would be able to disallow bets on their competitions.

Frank has been opposing the legislation that limits the ability of Americans to gamble on the Internet for a long time. He considers this to be among the worst laws that have passed and he is convinced that a lot of congressmen are having second thoughts about it.

The chairman of the Poker Players Alliance, Alfonse D'Amato, considers this bill as a common sense to approach to the online gambling. Eye on Gambling, a Web site focused on sports betting, considers that the act has limited purposes and that by any means the offshore gambling companies won’t be allowed back in the U.S.

Joseph Kelly, professor of Business Law at Buffalo State, believes the bill has no chance of being passed, but he sees it as a debatable subject. He is sure that the Congress won’t pass the bill until they have done some studies on the internet gambling. If the results would be favorable then the Congress might approve the bill.

He says that the Congress would like to see concrete evidence that the websites can prevent the under aged betting and the compulsive gambling. Nevertheless this is the first good news for the U.S based gamblers since last year when the UIGEA was passed.

Let's take a look at the possible winners and losers if the bill would pass in the current form:

Winners

1. The States

The States would be the biggest winners if this bill would be passed because they would have the power to allow or disallow internet gambling on their territory. They would also have the right to impose taxes on winners and licensees, which would mean more revenue.


2. The Sport Leagues

The NFL and the MLB always approved and sustained the online gambling ban but they have requested that their fantasy sports leagues not to be included in the UIGEA.

The new bill would permit the Sports Leagues to allow or disallow bets on their competitions. It is most likely that they won’t allow it, and then the sports books would have to comply otherwise they would lose their license.


3. Online Poker Rooms

Most likely that the biggest online poker rooms would pass all the requirements imposed by the IGREA, since they have been working hard to receive a license in the European nations.


4. Yahoo!

Yahoo! launched an U.K internet poker room last week and if the bill would pass, then Yahoo! would receive a large number of customers. People trust Yahoo! and if it would offer an U.S internet poker room they wouldn’t hesitate playing in it because they would know that they wouldn’t break the law.


5. The Banks, credit cards and PayPal

Banks were against the UIGEA because they were forced to track every transaction made by their customers to identify and to block the purchases made through Internet gambling.

PayPal did business with the offshore internet gambling sites, and because of this it had to pay $10 million. If the bill would pass, then they would receive a lot of customers who would use their services to bet online.


6. The U.S Players

The American players would be able to make instant transactions directly with the online casinos. The lags would be reduced and the costly fees would be eliminated. They would have more trust in the casinos they use if they would be approved by the American government.

The Losers

1. The Internet sports books and bettors

These would be the biggest losers if the IGREA would pass. Their entire business is based on sports betting and if the bill would allow the sports leagues to withdraw their games from any betting activities, the online sports books would lose a lot of customers.


2. NETeller, ePassporte and other Internet gambling payment processors

If they bill would pass, the players would be able to make transactions thought their credit cards, Paypal, of bank accounts, so these services would have no purpose.


3. Sen. John Kyl and Rep. Bob Goodlatte


These two congressmen were the main reason why the UIGEA was approved. Jim Leach, the former, Iowa Congressman made everything he could to get this bill approved and that cost him the last year's elections. Kyl and Goodlatte didn’t have any problems with the elections last year but if they continue to sustain the bill, the Internet gamblers might vote against them.