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.

Several months ago, Harrah’s Entertainment became the first American land-based casino to launch an online gambling website. Harrah’s online casinos are based overseas and do not currently accept players from the United States. However, they are now for the first time advertising to U.S. players.

Harrah’s, sponsor of the World Series of Poker, has begun advertising for their online casinos on their WSOP website. Players cannot gamble for real money on the WSOP.com website. Instead, the online poker website can be used as a tutorial to learn the game. Visitors play poker using chips of fake money. The World Series of Poker website has links to Facebook apps, iPhone apps and online casinos. In those online casinos, unlike the other options, players can gamble using real money.

Right now, American customers cannot play for real money at the online casino, but Harrah’s is hoping it will be an option in the near future. The casino company may be thinking that UIGEA will be repealed soon, since the Barney Frank/Ron Paul online gambling bill (Internet Gambling Regulation, Consumer Protection and Enforcement Act) has passed the House Financial Services Committee. However, as I have pointed out, there are numerous obstacles still in the way of that bill becoming a law. Many in the online gambling industry are growing pessimistic of its chances.

Though I doubt there is anything illegal in advertising for their real-money online casinos in the United States, you can expect Harrah’s to get some heat from the government. The Nevada Gaming Control Board is already looking into their online casino deal and determining whether it is proper. By advertising online casinos in the United States for the first time, the casino will bring itself under further scrutiny, possibly by the federal government this time.

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.

Well, if you’ve been reading Gambling Review for a while then you have likely read countless articles on the Unlawful Internet Gambling Enforcement Act (UIGEA) and Barney Frank’s attempt to repeal it with his proposed bill, the Internet Gambling Regulation, Consumer Protection, and Enforcement Act. Now there is a new attempt to legalize and regulate online gambling and it comes in the form of a bill that sets out to simplify the U.S. tax code.

Any American readers don’t need to be reminded of the ridiculous nature of the tax code, which is thicker than a phone book and more confusing than a T.S. Eliot poem. The code, of course, is deliberately that difficult for people to comprehend, because being that complex guarantees that mistakes will be made and if they are, those in power can use those mistakes as a weapon against those who oppose them. Ever wonder why people who accused President Clinton of misconduct found themselves getting audited by the IRS? Nixon did the same. By making the tax code complex, those in power can use it to punish their enemies and help their friends by giving them a break. That’s why tax cheats like Timothy Geithner are in President Obama’s cabinet rather than in jail.

Given how absurd the tax code is, rewriting it is a good idea. Ron Wyden, a Democratic Senator from Oregon, and Judd Gregg, a Republican Senator from New Hampshire, have proposed to do exactly that, by introducing the Tax Fairness and Simplification Act of 2010.

I haven’t read or even seen the bill yet, so I can’t tell you what’s in it. I can only tell you what those two Senators say the bill will do. According to them, it will eliminate many “specialized tax breaks” and “create policies that benefit everyone.” That wording scares me, but let’s continue. They also say the bill will include “fiscally-responsible middle-class tax cuts, business tax breaks to help American companies compete globally and create jobs, and a fairer and simpler tax system for all Americans.”

Okay, all of that sounds good except that I cringe when I hear a politician talk about taxes being fair. They normally do so when calling for a progressive tax system that unfairly places an extra burden on the upper class citizens who are the ones starting companies and creating jobs. Also, America already has a progressive tax system, with most of the tax burden being shouldered by the wealthy.

The one aspect of the bill that is of the most concern to online gamblers, though, is the fact that it calls for the regulation of online gambling, with all operators paying a 2% licensing fee to the government on all deposits. Many of the provisions in the gambling section of the bill are like those in Frank’s bill. The bill calls for “strict federal licensing and regulatory framework” to ensure that the games are safe and fair. A Joint Committee on Taxation analysis determined that the regulation of online gambling called for in the bill would generate almost $42 billion over the next 10 years.

Now that the bill has been proposed, its next step is to be debated in a Senate committee. Even though it would clearly legalize and regulate online gambling, I’m not sure if this bill is a good idea. It calls for some tax cuts but lets some of Bush’s tax cuts expire. It also changes the tax brackets and does other things that could be detrimental to the economy. It’s simply too early to tell, without having read the bill, whether it’s a good thing or bad. Rest assured, Gambling Review will follow this bill closely.