Betting Against the Ban

Bettors, Companies Try to Reverse Online Gambling Law

Posted April 13, 2007 at 6:21pm

Online gamblers are not folding in the debate over whether their favorite pastime should be banned.

The bettors and the companies that support them instead are anteing up for a lobbying push to overturn a law — less than a year old — that bars the practice by forbidding credit card companies from accepting payments made through gaming Web sites.

That measure stalled on Capitol Hill for six years, in part as a result of an opposition campaign waged by Jack Abramoff, who represented a gambling services company. But last year, with Abramoff on his way to jail for his part in a wide-ranging corruption scandal, it cruised to passage.

Now, House Financial Services Chairman Barney Frank (D-Mass.) is moving to repeal the law, which he has called “one of the stupidest things I ever saw.”

Lobbyists close to the issue expect Frank to introduce his proposal in the next two weeks, though Frank spokesman Steve Adamske said the bill still is being drafted and declined to discuss its scope or a timeline for action.

In recent weeks, with Frank sending stronger signals of his intentions, gambling interests have gone on a hiring spree. The Poker Players Alliance, a grass-roots membership group, has tapped former Sen. Al D’Amato (R-N.Y.), and his team at Park Strategies, in addition to Patton Boggs. PartyGaming, a British company, signed up Paul, Hastings, Janofsky & Walker and Parry, Romani, DeConcini & Symms. And the Interactive Gaming Council, a group that formerly worked with Abramoff’s colleagues at Greenberg Traurig, hired Dickstein Shapiro.

D’Amato — once famous for hosting nighttime poker games in his Hill office — blamed Abramoff for tainting the debate last year. “I think that’s why it went through,” he said. “That stigmatized any Members seeking to protect the rights of individuals.”

Proponents of the ban made frequent reference to the disgraced former lobbyist and his work on behalf of gambling interests in their arguments. “This is legislation that was defeated by Jack Abramoff before. He is still out there with other lobbyists trying to do it again,” Rep. Bob Goodlatte (R-Va.), the bill’s House sponsor, told his colleagues in a floor debate last summer. “Support the legislation.”

Abramoff pulled in $440,000 in a single year of lobbying for eLottery, a small gambling services company. The company helped pay for a 2000 trip to Britain that Abramoff arranged for then-House Majority Leader Tom DeLay (R-Texas), his wife and two aides — two months before DeLay helped kill the gambling legislation.

D’Amato said he thinks sufficient time has elapsed since that scandal’s peak to move the broader issue out from Abramoff’s shadow. “He and his cronies have been dealt with, and we’re approaching this in a very open way, bringing this to the public’s attention,” he said.

The Poker Players Alliance has grown from about 100,000 members in October, when the bill was signed into law, to more than 335,000 now. The group aims to expand its membership to 1 million before the World Series of Poker in June.

That grass-roots strength could prove decisive to getting a repeal off the ground. Speaking to reporters in Europe last week, Frank said he will move the bill only “if the storm of public unhappiness is great enough.” Several lobbyists following the issue interpreted that as a sign he will be relying on the alliance, and other groups, to muster loud support from their membership.

Meanwhile, Michael Bolcerek, president of the Poker Players Alliance, said he will be in town this week to meet with Members of Congress, mostly on the House Financial Services panel, to discuss the repeal and security guarantees for online betting.

Despite the apparent energy behind a proposed repeal, several sources watching the debate privately expressed skepticism that Frank’s bill can make any progress. “It’s going to end up going nowhere,” one lobbyist said. He pointed to the wide margins that approved the bill in 2006, and the difficulty in convincing large numbers of lawmakers to reverse course to support enabling online gambling.

If nothing else, Frank’s interest in the bill has demonstrated the ability of newly empowered Democrats to move the financial markets. Lobbyists providing political intelligence for large investors and hedge funds have been scrambling for any new clues about Frank’s plans. In the month since his first public comments on the topic, shares of PartyGaming, the largest publicly traded online gaming company, have jumped nearly 50 percent on the London Stock Exchange. Shares of 888 Holdings, another online gambling company, have climbed 12 percent.