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Kyl asks Bush to Enforce UIGEA to Counter Frank's Repeal of the Anti-Online Poker Bill

Mon, Mar 19th, 2007 @ 12:00am

Arizona Senator Jon Kyl (R) sent President George W. Bush a letter thanking him for his protection of family values and urging him to act immediately in ensuring that the forthcoming regulations for the Unlawful Internet Gambling Enforcement Act (UIGEA) are as strictly enforced as possible.

In an effort to stop online gambling, the UIGEA was passed last October making it illegal for financial institutions to handle gambling transactions between online gambling sites and US residents.

Kyl, with the help of then Senate Republican Leader Bill Frist, had attached the UIGEA as Title VII of the unrelated and certain-to-be-passed Safe Port Act in the final hours before the Senate recessed. Thus most senators were unaware the UIGEA was attached until vote time, or they had already turned in their votes and had left the voting chambers because the Port Security Bill was so widely approved.

Kyl's letter seems purposely timed as it comes just a day after chairman of the House Financial Services Committee, Barney Frank, announced he will submit legislation to repeal the UIGEA (click here to read related PokerPages Article).

Frank called the UIGEA one of the "stupidest laws" ever passed.

Senator Kyl's letter had content aimed at Frank's effort to repeal the bill when it said, "Any progress made over the last several months may evaporate if immediate action is not taken to ensure strong and effective implementing regulations."

Kyl's letter circulated throughout the Senate by week's end.

"The politics of protecting state lotteries and Indian gaming is comical at times," said one Senator under the condition of anonymity. "Where are the families that this letter represents?"

Much criticism of UIGEA also relates to the hypocrisy of the exemptions it included. The UIGEA exempted horse racing, inter-tribal gaming and state lotteries from being included in the bill.

Kyl also made sure to exempt Fantasy Sports from the UIGEA.

The New York Sun recently had much to say about Kyl's position relative to Fantasy Sports, pointing out how Kyl has received many political donations from the sector:

For the past eight years, the article begins, "Mr. Kyl has been unable to speak about online gambling without comparing it to rack. Last year, he led a press release with this line: 'A Harvard professor once appropriately likened Internet gambling to crack cocaine use.'"

It then points out that Major League Baseball (MLB) loves the fact that you cannot play online poker, as it has made much money off the Fantasy Sports sites that it licenses:

"Consider this: MLB spent a good part of last year trying to corner the fantasy baseball market, unsuccessfully arguing in court that player names and statistics are not public events, and raising the licensing fees for officially endorsed fantasy baseball games such as those run by ESPN well into the millions of dollars. This was part of a basic strategy to centralize the huge fantasy market around MLB's Web site, thus giving baseball a finger in every fantasy pie."

"Though that strategy was dealt a blow by the August decision that MLB could not stop small companies from running fantasy games using baseball statistics, fantasy games remain a large and growing revenue stream for MLB (there are seven officially licensed fantasy games, with each licensee paying a reported $2.5 million) and an extremely valuable platform for the promotion of the sport."

The article stresses that online betting sites which were exempted from UIGEA, including Fantasy Sports, were sure to benefit from online gambling sites being closed to US residents:

"When you make an estimated $12 billion worth of annual gambling illegal, that frees up a lot of time and money for people to spend on the few legal games left standing."

"Happily for baseball," the article continues, "Mr. Kyl's ban on online gambling includes a carve-out for fantasy sports. Five card stud might be crack, but apparently the crystal meth that is fantasy baseball is fine with the good senator, who obligingly cleared out a whole gang of rival dealers so that MLB and the other major team sports could sling their product on the corner."

According to records the author says that they accessed through the Center for Responsive Politics, Kyl received donations totaling $41,398 from MLB executives and the game's political action committee last year.

"And if MLB were counted as a single corporate entity, rather than as a collection of 30 discreet businesses, it would have ranked as Mr. Kyl's sixth-most-generous contributor last election cycle, just $603 off being the fourth most generous."


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