Poker Industry Reacts to Senate Internet Gambling Legislation S 3018

Last month, Senators Ron Wyden (D-OR) and Judd Gregg (R-NH) introduced S 3018, the Bipartisan Tax Fairness and Simplification Act. The measure includes language legalizing and regulating internet gambling in the United States. Now, the industry has had a chance to react.

As its name implies, S 3018 is primarily a financial bill whose mandates include abolishing the Alternative Minimum Tax and slashing the number of individual tax brackets in half from six to three. Among those keeping a watchful eye on Capitol Hill is Interactive Media Entertainment and Gaming Association (iMEGA) Chairman Joe Brennan, who told Poker News Daily, “It’s encouraging to see two people in the Senate who are as serious as Wyden and Gregg, particularly Gregg, who is as respected more than anyone in the Republican caucus when it comes to the economy. To see him offer internet gambling in the bill is encouraging for what may happen down the road as Republicans take a look at paying for things.”

The legalization and taxation of internet gambling appears as Subtitle C of the bill on page 126. Wyden and Gregg’s piece of legislation borrows language from Congressman Barney Frank’s (D-MA) Internet Gambling Regulation, Consumer Protection, and Enforcement Act, which was introduced last May and currently carries 66 co-sponsors. The bill is numbered HR 2267 and was discussed in the House Financial Services Committee in December. However, no markup has been scheduled.

Gregg nearly became the Secretary of Commerce for the Obama administration. According to CNN, “irresolvable conflicts” led to Gregg withdrawing his bid to join Obama’s Cabinet last month. Gregg told reporters at the time, “I realize that to withdraw at this point is really unfair in many ways, but to go forward and take this position and then find myself sitting there and not being able to do the job the way it should be done on behalf of the President, 100%, that would have been an even bigger mistake.” Now, Gary Locke holds down the Secretary of Commerce position.

To Brennan, Wyden and Gregg’s inclusion of internet gambling may signal a changing of the guard of sorts in the Senate: “While it’s not necessarily a victory, it’s something that shows that there are now people every bit as serious as Congressman Frank in the financial sector in the Senate.” Wyden had previously offered a proposal to use funds derived from taxing internet gambling to pay for health care reform.

The Poker Players Alliance (PPA) has made no official comment on the bill. In fact, there is no mention of S 3018 on the organization’s website. PPA Executive Director John Pappas told Poker News Daily in a prior interview that the lobbying group was still assessing its merits.

Contrastingly, the Safe and Secure Internet Gambling Initiative (SSIGI) has thrown its full support behind the measure. SSIGI spokesperson Michael Waxman commented in a press release, “With so much media focus on the differences between Democrats and Republicans in Congress, this bipartisan initiative highlights the growing support on both ends of Capitol Hill for replacing the failed prohibition on internet gambling with a system to regulate the industry, protect consumers and generate billions in new revenue.” Whether S 3018 will be addressed in Committee is not yet known. It was referred to the Senate Committee on Finance, whose Chairman is Max Baucus (D-MT).

Despite several promising bills on Capitol Hill, several posters on the online poker forum TwoPlusTwo were not overly optimistic. “grdred944” explained, “Do you realize the Senate is sitting on 209 bills already passed by the House during this Congress? Overturning UIGEA and coming up with an online gaming bill is so far off the radar right now.”

Other members questioned the interpretation of the bill’s language, including a 50% tax on deposits for residents of states that opt out of the legislation. Pappas posted on TwoPlusTwo, “We have provided language to relevant staff about removing the 50% tax for opt out states. We hope that it will be part of a change to the base bill in what is called a ‘manager’s amendment.’ If they do not accept it, we will seek a sponsor of a regular amendment to the bill.” Licensed operators are subject to a 2% tax on deposits under S 3018.

We’ll keep you posted right here on Poker News Daily.

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OPEN-HANDED - A category of games characterized by a part of each player's hand being exposed.
POSITION - One's location in the betting sequence, relative to the players still in the hand. First position is first to act.
TOP TWO PAIR - In flop games, having hole cards that make the highest possible two pair hand.
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