Internal Strife Threatens Future of Online Gambling Legislation
By CHUCK BLOUNT - Express-News
One thing is for certain in the political landscape of HR 2267 — there's a lot of potential money to be made, and the infighting within the gambling industry may destroy any and all support for it.
As lawmakers appeared to be warming up to a bill that would provide national regulation of the online gambling industry and much needed tax revenue, recent Congressional testimony has online advocates and land-based casinos prematurely primed for war.
Tom Malkasian, part owner and board member of the Los Angeles-based Commerce Casino (one of the largest poker casinos in the world), shocked the gambling industry with his vehement opposition to the legislation.
He cited improper tax benefits to online entities, misleading revenue projections and the dismantling of existing federal and state gaming laws as his reasons.
The Poker Players Alliance countered the testimony scornfully, accusing the Commerce of placing its “narrow corporate interests ahead of the interest of America's poker players.” It also hinted the opposition to HR 2267 was because the casino has aspirations to control California intrastate online gaming.
Malkasian argues that the taxes imposed upon online gaming stand to be significantly less than those subject to land-based licensed casinos.
Online advocates counter that more people are frequenting those casinos after getting their feet wet first with online games. The biggest draw to online gaming is convenience. It cannot compare to the excitement of the actual casino.
Using poker as the barometer, online gaming does bring bigger land-based business. Twenty years ago, poker was a revenue drain. Now it's widely considered a revenue generator.
Events such as the World Series of Poker enjoy record attendance, and the Commerce has benefited financially with increased numbers as well as a tour stop on the World Poker Tour.
Malkasian also believes that illegally operating online sites (such as Pokerstars.com or FullTiltpoker.com, although he didn't name them directly) are in a better position to take advantage of HR 2267 and would quickly dominate the market. Licensed U.S. casinos that stood pat in areas of online gaming would have to build from the ground up.
