Online Legalization Bill Rests Until 2008, Shows Promise

(From the Las Vegas Review Journal) - WASHINGTON - Rep. Barney Frank, D-Mass., on Tuesday acknowledged his bill to overturn an Internet gambling ban has stalled, but he said pressure from foreign countries could revive the legislation.

Frank, who is chairman of the House Financial Services Committee, conducted a hearing on the bill in June but no further action is planned this year.

"It's not dead. It's not very active," Frank said. "It depends on whether or not there's support. I don't think there's support for it yet. It's growing."

Frank said it is up to gamblers to push efforts to overturn the ban, but then quickly corrected himself.

"I take it back. If the EU (European Union) gets into this WTO (World Trade Organization) thing, that's a lot more pressure," he said.

Frank was referring to a ruling in March by a WTO judicial panel that the United States is violating international trade law by prohibiting Americans from gambling on Web sites based in the Caribbean island nation of Antigua and Barbuda.

The U.S. Trade Representative responded in May by exempting U.S. gambling from international trade regulations.

"There an interesting hypocrisy here about the WTO obligations. They are sacred for a lot of things, but apparently not for gambling," Frank said.

So far, Frank's bill -- which would require the U.S. Department of Treasury to regulate online gambling Web sites -- has 36 co-sponsors.

There are 64 co-sponsors for a bill by Rep. Shelley Berkley, D-Nev., which calls for a one-year study of the Internet gambling industry by the National Research Council of the National Academy of Sciences.

But Berkley's bill has not been scheduled for a hearing, and she said she does not expect one this year.

Berkley said she is waiting on Rep. John Conyers, D-Mich., who is chairman of the House Judiciary Committee, to introduce his own version of a bill to study Internet gambling.

In 2002, Conyers introduced the first Internet gambling study bill and tried again the next year, but neither measure advanced.

"He can replace mine with his," Berkley said.

Although Congress is running out of time this year, Berkley said she is confident there will be action on Internet gambling legislation in 2008.

tIf the House passes an Internet gambling study bill, Senate Majority Leader Harry Reid, D-Nev., would be open to moving the legislation through the Senate, Berkley said.

"I know Senator Reid is favorably inclined to let the study bill pass the Senate even though he is not as enthusiastic about Internet gaming as I am," Berkley said.

In addition to the bills by Frank and Berkley on Internet gambling, there are two other pending measures.

• Rep. Robert Wexler, D-Fla., has proposed exempting poker and other "skill games" from an Internet gambling ban. Wexler's bill has 13 co-sponsors.

• Rep. Jim McDermott, D-Wash., has proposed taxing Internet gambling companies if they are licensed and regulated in the United States. McDermott's bill has one co-sponsor.

Mark Mendel, the attorney who is representing Antigua and Barbuda in its dispute with the United States, said there should be a ruling in November on the amount of damages the United States must pay.

"I feel confident that what we will get will be a massive number -- one of the two or three largest WTO rewards ever," said Mendel in a phone interview from Ireland.

The amount could range from more than $1 billion to $3.4 billion, Mendel said.

"One of the frustrating things about our case is that everyone seemed to pretend the United States doesn't have to comply (with WTO guidelines)," Mendel said.

Instead of damages, Mendel has said Antigua and Barbuda would prefer an agreement with the United States which would allow Americans to use the island's gambling Web sites.

Mendel said he would welcome legislation calling for a study of the $13 billion Internet gambling industry. He said Antigua and Barbuda could serve as a pilot project for the study.

"If a true test is given, we feel strongly that we could prove Internet gambling in Antigua and Barbuda is a safe and respectable business," Mendel said.

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