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Lipparelli: Congress Should Use This Brief Window to Legislate Internet Gaming

Nobody would deny that we live in a time of political divide. So I find some irony in the debates regarding Internet gaming regulation. When it comes to the meaty parts of the Gambling Prohibition, Poker Consumer Protection Act, floating around Congress, there is near universal agreement. Congress should act to pass it before the last days of the 112th. Here’s why.

All agree that legal Internet gaming regulation should — mirroring the 60-year success of our gaming industry controls — prevent underage gaming, assure game integrity and taxable revenue collection, and protect the vulnerable. Congress has a key opportunity to give law enforcement the power to arrest illegal gaming operators who have for years enjoyed unregulated tax-free access to U.S. consumers. Further, draft legislation requires that interested states “opt in” to participate, allowing states not interested in offering legalized regulated gaming to pass and remain gaming free.

There are certainly people who decry any sort of gambling in the first place. But a recent Department of Justice decision has opened the door for states to license and sanction gaming over the Internet. As it now stands, at least five states will have Internet gaming up and running within the next 18 months. Without congressional action, slot machines and roulette wheels will soon be spinning inside every computer and cellphone in America.

The legislation under review in Washington would prohibit casino-style gaming on the Internet and sanction only online poker and lottery ticket sales. This is a wise and advisable compromise. Those opposed to gambling on the Internet will see 99 percent of it removed. The brick and mortar casino industry — which may have a lot to lose if casino-style gaming goes online — will retain its health and the jobs that go with it. Lotteries will see business expand to a new customer base. And, importantly, states will derive much-needed revenue from online poker — an iconic American game enjoyed by presidents and many others for centuries and one in which the outcome can be determined by shrewd play and not necessarily by the cards set down by the house.

There is a brief window of time for Congress to legislate this win-win-win-win scenario before cash-strapped states begin to set individual regulatory frameworks, racing against time to get the bets flowing. Federal legislation is the equivalent of saving Humpty Dumpty from falling and fracturing into 50 pieces ... because putting him back together will prove costly and frustrating.

And who wants Humpty Dumpty to fall? State lotteries.

Recently, representatives of lotteries from six states visited Washington to try to undermine the progress of federal legislation.

Lotteries have been around for a long time. As far back as the 1700s, they’ve been used to fund a host of state-level initiatives, including education. They usually enjoy great public relations even though the odds of winning are remote; odds in the recent Powerball jackpot were 175 million to one.

Very early in the discussion of online gaming legislation, lotteries worried that they wouldn’t have a seat at the table. With the DOJ opinion now in place, lotteries are positioned to enjoy a flow of new customers and increased profits as lottery tickets will become readily available over the Internet.

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