It was not long ago that seemingly every online gambling news source reported that UIGEA was likely to be repealed this year.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 In order for UIGEA to be repealed in 2010, the bill would have to pass the House and then the Senate and if the two bills are different, which is almost guaranteed, it would then have to be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.

In the same way that businesses have to pay off the Mafia for “protection” in order to operate, Sportingbet just reached a deal with the U.S. federal government. With the feds shaking them down, the online betting site did the only thing that would make the harassment stop: They paid for protection.

Sportingbet, a company based in the U.K., reached a non-prosecution agreement with the United States government. As part of the agreement, the company agreed to forfeit $33 million to the authorities, supposedly as penance for their American online gambling operations that took place between 1998 and 2006. Of course, there was no American ban on online gambling during that time period and there still is no federal law against it, though the passing of UIGEA in 2006 acts as a de facto ban.

So here’s how it worked. The government accused Sportingbet of violating a law that didn’t exist and if they wanted to avoid prosecution and maybe even be able to obtain a license if the U.S. decides to regulate the industry, they would have to pay up to the tune of $33 million. Relatively speaking, Sportingbet got off light. PartyGaming, the only other online gambling company to reach a non-prosecution deal with the feds, had to pay $105 million. Under the deal, Sportingbet agreed to pay $15 million by September 30 of this year, $12 million by the same date in 2011 and $6 million by 2012.

A lot of people think the United States will eventually legalize and regulate online gambling, though it’s doubtful that it will happen this year. If that happens, it’s likely that those who agree to pay off these government thugs will have first dibs at overseas licenses. In that way, perhaps Sportingbet and PartyGaming are making business decisions that will turn out profitable in the long term. However, in the short term, it’s hard to get past the bad taste that caving in to the mob leaves in your mouth. For those two companies, I hope it’s worth it.

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.

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.

This weekend, liberal bloggers, reporters and other activists got together in Las Vegas for one big evil progressive seminar called the Netroots Nation convention. It was a seminar in which radicals cried that the Obama administration is moving too slowly and hasn’t transformed the country enough, as if they expected us to already be a militarized nation under totalitarian rule at this time. Not quite yet. It was a conference where radicals lamented the lack of a public option (so far) in Obamacare, the fact that America is still a somewhat-capitalist country and the fact that Americans are starting to recognize radical organizations like the Tides Foundation, which basically launders money for radicals.

Even in a convention based on pushing agendas with which I couldn’t possibly disagree more, there was some positives, the main one being discussion on online poker. Professional poker player Andy Bloch, current Full Tilt sponsor and a former member of the MIT blackjack team, spoke about the industry. At the seminar, Bloch called on the government to legalize and regulate online poker, stating that denying Americans the ability to play the game violates their freedom of choice. Pro-freedom speeches aren’t exactly the norm at progressive conventions like Netroots, but the people were willing to hear him out.

Bloch said that a ban on online poker goes against freedom of choice and a free Internet and stressed that the activity is a mainstream one that people of all political stripes watch on TV. If it’s too dangerous for people to do, why are ESPN, Bravo, E! and countless other channels allowed to televise it?

Since he was speaking to radicals at Netroots, Bloch was sure to also take on a progressive tone regarding online poker. He talked about the additional revenue the government could generate and the responsibility of the government to protect people from themselves. Bloch said that the government is “forgoing billions in tax revenue when our budgets are most in need.” He also said that by not regulating the online poker industry, the government is “ignoring their responsibility to protect children and other vulnerable members of our society.”

Never mind the fact that protecting people from themselves is not the role of the government. Putting that aside, Bloch made good points at the convention, particularly when he criticized the Unlawful Internet Gambling Enforcement Act (UIGEA) and pointed out that, despite the federal government’s opinion, some form of poker is legal in 48 out of 50 American states.

And that is where I agree with Bloch. If the federal government just gets out of the way and lets states handle the question of online poker, things will be a lot better. I imagine most states will opt to legalize online poker and many will tax it for additional revenue. An activity like poker was never meant to have federal intervention and that intervention must stop.

It’s not often that I agree with Shelley Berkley, or any Democrat for that matter, but she had a rare moment of common sense this week. In a Roll Call article, the U.S. Representative from Nevada criticized the Unlawful Internet Gambling Enforcement Act (UIGEA) of 2006.

Berkley stated that the UIGEA does nothing to protect the American people from dangerous online casinos and is also ineffective in preventing online gambling. She also pointed out that the “law doesn’t even make clear what is illegal gambling and what is not when it comes to the Internet.” She said that the law takes enforcement out of the hands of the correct agencies and instead pins “a cyber ‘tin star’ to the chest of the financial industry with the idea that these companies would become the new ‘virtual sheriff’ in town.

UIGEA never defines what online gambling is illegal and there is no federal law that does so, either, though the Department of Justice considers the practice to be against the law. Of course, the DOJ often invents new rules and laws like that, despite a lack of authority to do so. The UIGEA simply places the burden on the financial industry to make sure no “unlawful” online gambling payments are processed, without even defining what is unlawful. It is an unfair burden on an already hurting industry and it is bad for online gamblers throughout the country.

In the article, Berkley compares UIGEA and the de facto ban on online gambling to the prohibition of alcohol during the 1920’s and 1930’s. It’s always funny when liberal Democrats use Prohibition as an example, considering that the law was passed during the Progressive Era, when big government took unprecedented control over industry and the private lives of American citizens all in the name of the “greater good.” Progressives of that time period are heroes of the big-government liberals of today, yet they’re happy to denounce Prohibition. I guess they’re fine with the government controlling everything else, but they also enjoy their booze.

Ideology aside, Berkley is right. During the Prohibition, the government tried to keep Americans from drinking, but instead it just made them more secretive about their drinking. It also had the added bonus of giving power to gangsters like Al Capone. UIGEA and the unlawful de facto ban on online gambling does not prevent Americans from gambling at online casinos, but it makes them hide it and it keeps those casinos away from the watchful eyes of regulators.

Of course, government regulation isn’t necessarily a good thing. The two most heavily regulated industries in the United States are the oil and financial industries and we’ve seen a bit of damage to those lately. Additionally, government regulation of online casinos would most likely result in the players being charged more, such as the poker rake increase we’ve seen in France.

Whether the U.S. government should regulate online gambling is a question open to debate, but one thing is certain: The government needs to stop trying to prevent people from spending their own money as they please. Like during Prohibition, this is a case of the government thinking they know better than the people and we have seen time and again that nothing could be farther from the truth.