Legal Online Poker for North Dakota Folds

Not all Republicans back the Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA).

In July 2006, when the U.S. House of Representatives first passed Internet Gambling legislation, North Dakota State Rep. Jim Kasper reacted by saying, "My fellow Republicans just don't get it" when it comes to Internet gambling.

Kasper, R-Fargo, had promoted a bill and state constitutional amendment during the 2005 Legislature to allow North Dakota to license and regulate online poker sites. His bill resembled the way the UK Gambling Act will regulate and tax online gambling and protect its citizens when it goes live in 2007.

Kasper believes that by regulating the online poker industry in North Dakota that the license fees generated would cover the costs for all state public services and reduce property taxes. He also believed that the state-owned bank of North Dakota will be able to make profits since they would be the only bank allowed to handle North Dakota-licensed online poker transactions.

His proposals won approval in the House. But after a well-timed letter from the Department of Justice (DoJ) worried senators about possible legal costs to oppose the DoJ, the proposals were overwhelmingly defeated by the North Dakota Senate.

"The DoJ wrote what I call a 'poison pill' letter [to North Dakota's attorney general]," Kasper said. "It had misinformation about the Wire Act, implying it applies to all Internet gambling."

Fast forward to September 2006. When U.S. Senate Majority Leader Bill Frist (R-Tenn.) stated he would get the Senate to approve the same legislation in the waning days of the 109th Congress, Kasper called the proposal "ridiculous."

When Frist slipped the UIGEA into the Safe Port Act in the last hours before Congress adjourned, Kasper commented, "I was saddened to see what the Republican Congress did." He added, "It was a terrible way to make public policy."

So now, passage of the UIGEA has effectively killed any plans Kasper had to re-introduce his legislation for licensing online poker. This is because UIGEA is Federal policy and all states must comply.

"The new federal law makes the bill clearly illegal," said North Dakota Attorney General Wayne Stenehjem, who is a director of the Bank of North Dakota.

"The federal law prohibits the use of credit cards, which are issued through banks, and the use of banking institutions to transfer money to pay off the gambling debt," Stenehjem said. "You can't use the Bank of North Dakota for that purpose under the federal law."

"It's time to fold 'em," the attorney general said.

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