After “Black Friday,” when the federal government unsealed an indictment against the founders of the three largest online poker rooms operating in the U.S. and seized their domains, it was only a matter of time before someone asked Barney Frank’s opinion. Congressman Frank has been the loudest voice for the repeal of UIGEA since its passage in 2006, so he’s not happy with the recent crackdown.

Speaking with The Hill, Frank said that the Obama administration is “wasting its time” and resources by going after online poker sites. Frank is an expert on that, because his entire tenure in the House of Representatives has been a waste of time and resources. Frank also indignantly added that the Justice Department should be focused on prosecuting those responsible for the mortgage crisis and financial downturn in the country, rather than on those offering online poker. “Go after the people responsible for empty houses, not full houses,” he joked.

Of course, going after those responsible for empty houses wouldn’t be tough for the Justice Department. They could start off in Congress, particularly with the man with that great sound bite. Along with former senator Chris Dodd, Frank was one of the people most responsible for the collapse of the housing market. Let’s not let a little detail like that get in the way, though, Mr. Frank.

Hypocrisy aside, Barney Frank is right that the government shouldn’t be wasting their time with online poker. There are certainly more important things for the Justice Department to do. “I’m not saying violate the law, but to give this priority in law enforcement over some other things is a terrible idea and I think the administration is wrong on this.”

Frank is yet again involved in a push to repeal UIGEA and replace it with federal regulation. This time, instead of proposing the bill, he has co-sponsored a bill proposed by Republican John Campbell. Many have wondered why the crackdown would happen now. Some optimistic people think it could be an effort to get rid of the dirty companies before regulating the market. Others aren’t so sure. To me, it all comes down to some unknown agenda. For Attorney General Eric Holder, everything is political, including who he does and does not decide to prosecute. I don’t know what the political angle for this is, but I’m sure there is one. Finding out how Holder and the administration benefits from this is the important thing.

Online gambling proponents in the United States, you might want to sit down, because I have more bad news. Things just aren’t going well for you. I know a lot of you got excited about Barney Frank’s online gambling bill, especially when it passed the House Financial Services Committee, and optimism is a good thing, but there are too many reasons to think that UIGEA will survive 2010.

The biggest obstacle is simply time. As I mentioned before, Congress has a limited time to pass the law. Any bill that isn’t signed into law when the new Congress takes over in 2011 will be killed. Congress then has to start the process over from the beginning. Even if they took the same exact bill, they would still need to get support from the new members of Congress, get new markups from those members, clear committee, have the bill reach the floor for debate, be voted on, passed and signed into law.

Congress recesses on October 8 and from then on is going to be in full-on campaign mode until after the mid-term elections on November 2. Before October 8, few bills will be passed and certainly nothing of a controversial nature, giving ammunition to the opposition.

For all of those reasons, Barney Frank admitted to The Hill that his legislation, the Internet Gambling Regulation, Consumer Protection and Enforcement Act (H.R. 2267) is not likely to become law in 2010. Another problem is that the companion bill, the Internet Gambling Regulation and Tax Enforcement Act (H.R. 2268), is going nowhere. The bill, proposed by Jim McDermott, would set up the tax laws and structure for online gambling once it is legalized by Frank’s bill. Recently, McDermott admitted that he does not think the bill will be marked up before the Congressional recess, meaning the bill would never even make it to committee.

Even if Frank’s bill and McDermott’s bill somehow both got passed by the House, there’s another problem: the Senate. Senator Robert Menendez introduced the Internet Skill Game Licensing and Control Act (S 3616) and companion legislation last year, but it has little support and is drastically different from Frank’s bill. The bill has yet to be marked up and may not have enough support to clear committee. Even if it does, Harry Reid, the Senate Majority Leader, opposes the legislation. Reid, who represents Nevada, is looking out for the interests of the Las Vegas casinos. His office released a statement that said that he “does not support any of the existing bills and he would oppose any proposal that would put jobs in Nevada at risk.”

It’s hard to pass a bill in the Senate without support from the Majority Leader. Even if that happened along with the House passing both H.R. 2267 and H.R. 2268, the bills would be different, so they would have to go to conference committee until there is only one online gambling bill. Then it would have to be signed into law by President Obama before the new Congress takes over in January. Sure, that is possible, but I can tell you that the odds are worse than any game in Vegas.

It was not long ago that seemingly every online gambling news source reported that UIGEA was likely to be repealed this year. They touted accomplishments like Barney Frank’s bill passing the House Financial Services Committee. Meanwhile, I was one of the few people telling you not to hold your breath, that in the limited time left before mid-term elections, it was unlikely that a Congress that is concerned now more with elections than in passing legislation would floor such a controversial bill. Now it seems that Barney Frank agrees with me.

Representative Frank recently told Capitol Hill that he does not believe his online gambling legislation will be discussed on the floor before the mid-term elections. He also does not believe it will be discussed during the lame-duck session. Traditionally, Congress does not pass any major legislation during the lame-duck session because doing so would likely go against the will of the American people, who voted the people out for a reason. Still, some members of Congress have hinted that major controversial legislation such as a climate change bill could reach a vote due to lame ducks having no more fear of losing their job.

Aside from lame-duck legislation, the other dirty trick that could get Frank’s bill passed would be to tack it onto another larger bill, such as a jobs bill or a tax-cut bill. UIGEA was itself tacked onto the SAFE Port Act in 2006 as an amendment and the best chance bill that would repeal UIGEA has is likely to do the same.

Yet even if that happens and Frank’s bill passes the House in 2010, there is still a much bigger problem: the Senate. The closest thing the Senate has to a comparable bill has little support and is also not scheduled for debate. In order for UIGEA to be repealed in 2010, the bill would have to pass the House and then the Senate and if the two bills are different, which is almost guaranteed, it would then have to be combined by a Conference Committee and passed again. It would then have to go to President Obama and signed into law. All of that before the new congressional session in January.

It is for that reason that I think 2011 is the best chance we have for repealing UIGEA. Though Frank may no longer be Chairman of the House Financial Services Committee anymore (and may not even still be in office), Congress should be full of moderate Democrats and Tea Party Republicans that lean toward small-government libertarianism. If that happens, both sides should be able to agree that the government shouldn’t be banning online gambling.

This seemed like crazy talk a few years ago, but online poker is coming to the United States. Tribal casinos in more than 30 states have joined together and the collaboration will result in the first interstate online poker network in America.

Atlantis Internet Group Corporation announced today that they signed a licensing deal with Cake Gaming NV that will open up online poker in the United States. The licensing agreement will allow tribal casinos to run online poker networks on their land. The Atlantis Internet Group Corp. will use their Tribal Gaming Network, which was approved by the National Indian Gaming Commission (NIGC).

This deal succeeds where Congress so far has failed. Many in Congress – most notably Barney Frank and Ron Paul – have been trying to get online gambling legislation passed, but it has stalled in the House after passing the Financial Services Committee and no bill with any support exists in the Senate. It seems increasingly unlikely that a repeal of UIGEA will happen this year. Since intrastate activity and activity on tribal casino is exempt from federal laws, the Tribal Gaming Network needs no such legislation.

The Atlantis Internet Group Corporation will run the only online poker network operating in more than one state. With it, anyone on tribal land can access the online poker network, existing on a Wide Area Progressive network (WAP) and play online poker against anyone else that is on the network.

Before UIGEA created a de facto ban on online gambling in the United States, America accounted for approximately two-thirds of the worldwide online gambling revenue. Losing that market meant online gambling operators losing a lot of money. The tribal online poker network will bring much-needed revenue to the tribes.

Donald L. Bailey, the CEO of the Atlantic Internet Group Corporation, said that the new system offers “an immediate and legal solution to Indian casinos nationwide, providing the largest online poker network in the U.S.” He also called the network a milestone and said that they will provide an “economic shot in the arm for tribes and states facing deficits nationwide.”

It’s getting harder and harder to find people who aren’t mad at Harry Reid. The U.S. Senate Majority Leader, elected by Nevada, seems to be unpopular with everyone. People on the right hate him because of his radical leftist policies. People on the left feel that he hasn’t gotten enough done for them. People in the middle realize that he’s incompetent and possibly senile. After all, several times he has accidentally voted against his own bill and had to be reminded by a colleague that he wants to vote for it. “Hey, Harry, you sponsored and wrote this bill. I think you meant to vote yes.” And then there are the Las Vegas casinos.

A large part of Nevada’s economy is based on tourism and a large part of that is in Las Vegas. For that reason, Reid has always tried to keep the casinos happy. Therefore, when the topic of legalizing online gambling came up, Reid tried to walk the tightrope. Some of his colleagues in Congress have been trying to overturn UIGEA ever since it passed in 2006, but Reid held out as long as he could and avoided giving his opinion on the issue. The reason is simple. Some Las Vegas casinos are against online gambling and others want in on the market. There is also the issue of tribal casinos to deal with.

Earlier this year, Reid – whose approval rating has been listed as low as 8%  –  finally gave in and decided to support a federal legalization of online poker. As a compromise, he opposes any other form of online gambling and only wants to allow poker. It is a stance that was meant to give him more support but instead it guarantees that he will have none.

The Vegas casinos who oppose online gambling are furious, stating that legalizing online poker puts the foot in the door for a wider online gambling expansion that they believe will hurt their businesses. Eric Dale, general manager of Baldini’s Sports Casino, says that legalizing online poker will not only hurt the casinos in Nevada, but it will also hurt the rest of the tourism industry. He says that such legislation would “take money out of the hands of those who play online, money they won’t have to go out to a restaurant, to a movie, to gamble or eat. They won’t need to come out to a physical box (like a restaurant or casino) that employs people and that scares me.”

I suppose it’s the same problem that brick and mortar stores have had with the popularity of Amazon.com and other e-commerce websites. Like those stores, Nevada businesses will have to adapt to online poker. One such adaptation would be to get into the online gambling business themselves, something Harrah’s Entertainment is already doing.

While those who oppose online gambling are mad at Reid for supporting online poker, those who support it are mad that he wants to draw the line there. Barney Frank’s bill in the House, which passed the Financial Services Committee, would legalize all online gambling except sports betting. If Reid developed a Senate bill that only allows online poker, the two bills would be incompatible and no online gambling bill could be passed. In fact, it’s hard to find anyone who agrees with Reid that online poker is fine but all other games need to be banned. So who is he pleasing? Seemingly 8% of his voters. Good luck with that reelection campaign, Harry.

Earlier today I wrote about how time limits and the strict procedure of the American legislative process could derail any hopes of online gambling legislation passing this year. Did you read it yet? If not, I’ll wait. Go ahead.

That is far from the only obstacle facing Barney Frank and Ron Paul’s Internet Gambling Regulation, Consumer Protection and Enforcement Act (HR 2267), though. Another major obstacle is amendments added onto the bill by congressmen. For better or worse, lawmakers have the ability to tack amendments onto any bill being discussed, even if those amendments aren’t related. Sometimes it is done as a compromise to get more votes for the bill. Sometimes it is done to sabotage the bill by getting those who would otherwise support it to vote against it. Sometimes unrelated bills are tacked onto another bill (like the UIGEA being added to the SAFE Port Act).

Last week, 14 amendments were added to the online gambling bill that would repeal UIGEA and regulate the online casino industry in the United States. One such amendment was added by Brad Sherman, a California Democrat. Sherman’s amendment bans any online casinos that violate existing U.S. laws from receiving a license to operate in the country once HR 2267 is passed. Since federal laws on online gambling are extremely vague – when they exist at all – it is hard to say which online casinos are in violation of U.S. laws and which are in the clear. Therefore, that amendment’s impact is unknown, but it could cost a lot of online casinos the ability to accept U.S. customers. The online gambling lobbies, obviously, are not happy with Sherman’s amendment.

That wasn’t the only amendment added during the mark-up that hurts the bill. A similar amendment by Spencer Bachus (R-AL) and Michele Bachmann (R-MI) forbids overseas companies that have engaged in illegal online gambling business in the U.S. from receiving a license. It also bans anyone who had been employee of said companies from obtaining a license. Peter King (R-NY) added an amendment that prohibits sports betting.

Another amendment by Sherman allows states a full legislative session to opt-out of online gambling. Interestingly, an amendment by Joe Baca (D-CA) that allows states and tribes to opt-in to online gambling was defeated. So I guess they can opt-out but not opt-in.

The biggest head-scratcher was another amendment by Baca that would have allowed Native American tribes to participate in online gambling. Frank, as Chairman of the Financial Services Committee, denied the amendment without allowing a vote on the basis that the amendment is not germane, meaning it is not relevant to the subject of the bill.

Excuse me? That seems pretty relevant. You want to legalize online gambling in the United States but don’t think the question of whether members of Native American tribes are allowed to participate is relevant?

First of all, the “not germane” argument is only used when a congressman doesn’t want something to be voted on. Unrelated amendments are added to bills all the time. The only conclusion I can draw from this decision is that Barney Frank wants you to be allowed to gamble online, as long as you’re not one of those Indians.

Whether the post-mark-up bill will have more or less support from Congress is unclear, but with no urgency to pass a similar bill in the Senate, it may not matter. For that reason, though it’s still early, Frank and Paul’s online gambling regulation bill just may be dead.

Many in the online gambling industry, including this writer, were excited to see the Internet Gambling Regulation, Consumer Protection and Enforcement Act (HR 2267) pass the House Financial Services Committee last week. The bill, drafted by Barney Frank and Ron Paul, would repeal UIGEA and regulate the online gambling industry in the United States. Though many were quick to celebrate, the objectivity of time allows us to look at the obstacles still in the way of that bill becoming a law.

The first obstacle is simply the calendar. This is the beginning of August, but Congress is currently in their summer recess, from which they won’t return until September. The November elections will ring in a new Congress, so the 111^th Congress only has a small window – little more than one month – to get things done.

Though HR 2267 has passed the House Financial Services Committee, it has yet to be placed on the legislative calendar for floor action. From there, it needs to have a floor debate. Generally, bills receive an unlimited floor debate, which means the members of Congress can argue about and discuss the bill until the session ends and nothing will happen with it. Also, anyone who is strongly opposed to the bill can filibuster and talk the bill to death. Since online gambling is such a controversial issue, I’m sure there is a representative or two who would love to do just that.

Congress can avoid a filibuster by invoking cloture, which limits the debate to 30 hours and then requires a vote. However, a bill requires a 3/5 vote rather than a 2/3 majority to be passed once cloture is invoked. Though the bill passed the committee by a 41-22-1 vote, it’s hard to say whether it has enough support in the general House to pass by a 3/5 margin.

Once the online gambling bill is passed by the House, it would then be sent to the Senate for approval. Or, since a similar bill has been proposed by the Senate, that bill could be used instead. In any case, that bill would first have to be debated on and then passed by the committee by a 2/3 vote. It would then have to be put on the calendar for floor action and debated, just like in the House. It would then have to pass by a 2/3 vote in a normal debate or, if cloture is invoked, a 3/5 vote.

Once the online gambling bill passed the Senate, that version would likely be different from the House version, if for no other reason then due to the amendments added to the bill. Since both chambers of Congress would have a different version of the bill, it would then need to go to a conference committee. There, representatives from both chambers of Congress meet to work out the differences in the bill. There is no time limit for debate during the conference committee. If they are able to come to an agreement, the committee drafts a conference report, which is presented to both chambers. The House and Senate both then have to approve the conference report by a 2/3 vote.

After the bill passes both chambers (again), it would then be sent to President Obama, where he would have 10 days to sign the bill into law or veto it. The president’s veto can be overturned by a 2/3 vote in both chambers of Congress, which would pass the bill into law.

All of that has to be done during the 111^th Congress. Once the next Congress takes over, all existing bills that had not been signed into laws are killed. The process would then have to start over again from scratch. Though Frank and Paul could use the same bill, it would have to repeat the same steps, going through committee again (this time with different members) and having a floor vote (again with different members).

Those are just the problems that go along with the time limit placed on the legislative process. There are also problems in the form of various amendments that have been added to the bill. I will have more on that later.

What all of this means is that no one should take the passage of the online gambling bill as a certainty. Even if there is enough support to legalize online gambling in the U.S., there may not be enough time for this Congress to get it done.

If The Barney Frank/Ron Paul online gambling bill becomes law, UIGEA will be repealed and online casino gambling will be legalized and regulated in the United States. Sports betting, though, would still likely be left out.

Yesterday, the Internet Gambling Regulation, Consumer Protection and Enforcement Act (HR 2267), which was concocted by Democrat Frank and Republican Paul, cleared the House Financial Services Committee. By a 41-22-1 vote, the bill to license and regulate online gambling in America passed the committee, paving the way for it to be voted on by the full U.S. House of Representatives.

There are already compromises in the bill, though. Republican Peter King inserted an amendment that emphasizes that sports betting would remain illegal online and offline. King did so to protect the interests of powerful and loved sports leagues in the country, particularly the NFL. King admitted that “the NFL has concerns about gambling.”

To be honest, so do I. Sports betting scandals are terrible for the leagues, the teams and America (just ask the Chicago White Sox or Tim Donaghy). Concerns over game fixing don’t necessarily mean that sports betting should be banned, but it is a legitimate concern.

In any case, the bill passed the House with King’s anti-sports betting amendment. However, that doesn’t mean the amendment will say in the bill. During the full House mark-up, it can still be removed. Another amendment was added by Republican John Campbell and Democrat Brad Sherman. That amendment ensures that online casinos that target U.S. customers would have to be based in America, thus ensuring that the country would profit from the legislation and not lose revenues overseas. Other amendments were added for the protection of players, requiring the online casinos to post the odds of the games, have loss limits and verify the players’ age and location.

The online gambling bill is not yet scheduled for a floor debate and is not expected to be brought to the floor earlier than early September.

It seems that U.S. Representative Earl Blumenauer (D-OR) has changed his mind about online gambling. Four years ago, he joined the majority in voting for the Unlawful Internet Gambling Enforcement Act (UIGEA). Though the bill doesn’t actually ban online gambling (a fact reinforced by a recent Supreme Court decision), it does allow the federal government to go after financial institutions that are involved in transactions that are considered “unlawful” internet gambling transactions. Which transactions are unlawful is anybody’s guess – that’s one of the problems with the law – but many people believe it only applies to states that have banned online gambling.

Though he voted for a government restriction of online gambling in 2006, Blumenauer now says that he was wrong to do so. Yesterday he released a statement saying that the United States is missing out on gambling revenue that could help states and the federal government with their budget problems. In addition, he believes that allowing online casinos to operate in the U.S. would create jobs.

Blumenauer also suddenly realized that restricting online gambling is hypocritical, since fantasy sports, horse racing and state lotteries are exempt from UIGEA’s rules. So Blumenauer has finally seen the light. Good for him. I wonder who pointed it out to him (maybe he’s been talking to Ron Paul).

There is a popular misconception that Democrats are for legal online gambling and Republicans are against it. They say that UIGEA was pushed through Congress because the Bush administration wanted it done and Democrats have been fighting it ever since.

Like much of the popular opinion regarding politics, that is inaccurate. UIGEA was passed in 2006, during Bush’s second term. That much is true. However, the bill, which was part of the SAFE Port Act, had overwhelming bipartisan support. In fact, it had a type of bipartisan support that is rare in such a polarized era. The bill passed the House of Representatives by a vote of 421-2, with 9 representatives not voting (why members of Congress can abstain from voting so often when that is their only job is another story). It then passed the Senate by a 98-0 vote, with 2 senators not voting. After differences in the House and Senate versions were resolved, the conference report was then passed by the House 409-2, with 21 representatives not voting.

Two, folks. Two people voted against the bill. Of those two who voted against the bill, one was a Republican (Jeff Blake of Arizona) and one was a Democrat (Edward Markey of Massachusetts). Barney Frank, the current “patron saint” of online gambling, did not vote.

This is the legislation that he now deems to important to overturn, yet he didn’t even vote on it. Not an aye, not a nay. Nothing. Keep in mind that UIGEA was part of the much larger SAFE Port Act, which was concerned mostly with port security, but to say that it was a Republican bill that Democrats opposed isn’t exactly accurate, considering that only 1 Democrat voted against it and just as many Republicans did as well. Now, I don’t support either party, because they both suck (though I think Republicans suck less), but it’s time for some people to get their stories straight.

Some members of the U.S. House of Representatives are trying to get a federal legalization of online gambling so they can regulate and tax the industry. Such initiatives would overturn the Unlawful Internet Gambling Enforcement Act of 2006, which – though it didn’t outlaw online gambling – does allow the feds to go after financial institutions used in “unlawful” online gambling transactions. There is currently no federal law that bans online gambling, though it is banned in a few states.

The push to overturn UIGEA and regulate online gambling in America has been led by Democrat Barney Frank (D-MA) and Republican Ron Paul (R-TX). My personal opinion is that Paul wants online gambling legalized because the government has no business telling people what they can and can’t do with their money and Frank wants it regulated because he loves the government controlling and taxing businesses.

Since the Frank-Paul bill was introduced – but not yet brought to the floor –Jim McDermott (D-WA) introduced a companion bill called the Internet Gambling Regulation and Tax Enforcement Act. It has been co-sponsored by Earl Blumenauer (D-OR), Frank and John Larson (D-CT).

Last week McDermott’s bill was brought before the House Ways and Means Committee, which is the chief tax-writing committee in the House. Strangely enough, several members of this tax-writing committee – such as Charlie Rangel (D-NY) – have used ignorance of the tax code as defense for tax fraud.

Anyway, last week the committee looked at McDermott’s bill and they seemed unimpressed. McDermott stated that America was simply driving gambling revenue offshore, giving money to foreign countries that America desperately needs. He also said that his bill would generate $72 billion in revenue over 10 years from creating new taxes. Among the new taxes are plans to tax the players on their deposits up front, taxes on the casinos on the wagers themselves, taxing the players’ winnings and more. Of course, there would also be many different types of licensing fees for the casinos, just like for current brick and mortar casinos.

Two representatives from Nevada weren’t too big on the bill, which isn’t surprising, since they have to look out for the interests of Las Vegas. Republican Dean Heller said he would keep an open mind, but he is concerned about online gambling’s impact on the Vegas strip. He is also against the “deposit tax” that would take money away from players up front, whether they win or lose at the casino. The other Nevada representative on the committee, Democrat Shelley Barkley, said she supports the legalization of online gambling, but not the taxing of it – at least not right away.

I know what you’re thinking? What? A Democrat is wary about adding a new tax? How can that be? Also surprising for a Democrat, she made a good argument. She wants to legalize and regulate the new online casino industry and let it develop first before taxing it. “Because the industry is not even established yet, I can’t imagine how we can know with any degree of certainty how the special tax would affect operators or customers,” she said. Instead, she says that it should be legalized and regulated, but should not be looked at as a source for revenue. Wow, now she’s sounding like a conservative.

No decision was made on whether to move forward with the bill. This is Washington; things move slowly.