Bonusbabe

There has been a lot of activity this year in the Internet gambling arena.  Devastating legislation has been passed, several operators have been the target of investigations and arrests, and the financial vehicles historically used to fund the offshore entities have been attacked.  In the midst of all this negativity,  a small but growing movement has begun to reverse the damage.  

The movement began with a few congressmen (Barney Frank, Ron Paul, and Jim McDermott to name a few) who introduced legislation to reverse the effects of the UIGEA passed in early 2007.  It continues with the creation of the Safe and Secure Internet Gambling Initiative (SSIGI).  The Initiative seeks to support U.S. citizens’ rights to gamble online while insisting the proper safeguards be put in place to protect consumers and ensure the integrity of financial transactions.   

Bonusbabe.com recently had the opportunity to pick the brain of Jeffrey Sandman, spokesperson of the SSIGI.  Mr. Sandman was kind enough to give us the SSIGI’s view on the flurry of activity occurring in the online gambling world this year. 

BB:  There are several bills recently introduced in Congress that cast a positive light on internet gambling - something that hasn’t been seen much in the past–certainly not at this level.  Do you attribute this to the clandestine way in which the UIGEA was passed last winter? 

JS: First, the introduction of legislation to allow Americans to gamble on-line in a safe and regulated environment is a positive move by Congress.  The Unlawful Internet Gambling Enforcement Act (“UIGEA”), which passed into law in the dead of night last year, is an attack on our rights and freedoms. 

We believe the positive movement to regulate Internet gambling can be attributed to a large degree by the decision by key legislators to seek a new direction on how the U.S. treats Internet gambling and by the shift in control in Congress.  It is also a reflection of the desire of these legislators to protect the rights of the individual to determine how they spend their leisure time in the privacy of their own homes. 

By introducing the Internet Gambling Regulation and Enforcement Act, Representative Barney Frank is taking the lead in fighting for American consumers, by seeking to regulate Internet gambling and provide strong protections against underage and compulsive gambling, money laundering and fraud.  Legislation has also been introduced by Representative Jim McDermott that would complement Mr. Frank’s bill by setting up a framework to tax regulated Internet gambling operators.  It is anticipated that regulated Internet gambling would generate billions of dollars for the U.S. Treasury that could fund important government programs.   

The reality is that prohibition is not working, and there is a better way.  Rather than legislate an individual’s leisure activities, Congress should regulate Internet gambling and implement systems to protect consumers and ensure the safety of Internet gambling transactions.   

BB:  What has caused the sudden interest in regulating internet gambling in some form in this country?  For the past 10 years, the U.S. government has involved themselves in a campaign to eliminate the fledgling industry using every tactic possible - arrests, legislation, intimidation, etc.

JS: The current prohibition of Internet gambling as a result of UIGEA is not effective in stopping people from gambling online.  Right now, apart from permitted bets on horse racing, Internet gambling is a multi-billion dollar underground industry without adequate regulation or sufficient protections for consumers.  The regulatory framework presented in the Internet Gambling Regulation and Enforcement Act provides a new approach to bring transparency to industry operations by requiring a licensing regime that ensures consumers are protected and that applicable taxes are collected. 

BB:  Would the passing of any of these bills affect the cases the government currently has pending against the operators of BetonSports and PayPal (among others)?

JS: We don’t know.  However, it might change some attitudes and momentum.  The BetOnSports case is also much wider than just regarding online gambling. 

BB:  Why do you feel that internet gambling has such a stigma attached to it in the U.S. when it is openly accepted and regulated in several other “first world” countries?  Do you think this has anything to do with the government’s ability to monitor the funds flow and “get their cut”?

JS: It does not make sense for Internet gambling to remain unregulated, uncontrolled and underground in the U.S.  Millions of Americans enjoy gambling online, and should be able to do so without government interference.  This is reflected by the size of the current huge “underground” market.  The U.S. should learn from the countries that regulate Internet gambling, where it has been shown that a stringent regulatory environment can help combat compulsive and underage gambling and ensure the integrity of Internet gambling financial transactions.  

Though many Americans have never gambled online, gambling is a common form of entertainment.  In poll we conducted, it was found that over 62 percent of respondents have gambled in a casino.  With so many Americans gambling in a casino, it does not make sense for there to be a stigma associated with Internet gambling.

BB:  How has the Patriot Act affected Congress’ opinion of online gaming?  We know there have been isolated rare instances where terrorists have moved money, but is there a consensus that terrorist funds are laundered through gaming operations?

JS: It is not clear if the Patriot Act has affected Congress’ opinion of online gambling.  However, it is clear that unlike bricks-and-mortar casinos, the structure of the Internet allows Internet gambling financial transactions to be tracked, especially when existing controls required in the financial sector are utilized with these transactions.  In a regulated environment, the U.S. could require Internet gambling operators to cross-check financial transactions with existing databases used in anti-fraud, anti-money laundering and anti-terrorism efforts.  

BB:  Online poker and “skill games” seem to be the initial focus of much of this legislation.  Online casinos seem to be a secondary focus (at least initially).  Sports betting seems to be where the major divide lies.  Why do you feel this is?  Why does sports betting have such a nasty image?  Is it likely that regulated online sports betting will ever be legal in this country?

BB: There does not seem to be a distinction among most legislators on Capitol Hill between the regulation of casino games and sports betting.  This is evident in Congressman Frank’s legislation, which would regulate ALL forms of Internet gambling, including sports betting.  Mr. Frank’s legislation allows sporting leagues to opt-out of internet gambling. 

According to some surveys, sports betting is the single most popular type of gambling that exists in the United States today, and takes place in communities throughout the country.  Given this reality, we believe Congress should regulate online sports betting, an industry that currently generates billions of dollars for off-shore operators.  By regulating online sports betting, Congress can ensure that consumers who choose to bet online are protected.  A regulatory framework provides an alternative to illegal, underground book makers. 

BB:  Do the other major gambling markets (Las Vegas, Atlantic City, Indian Reservations, riverboats, etc.) seem to have a strong opinion one way or the other about online gambling?  Does it seem they support licensing and regulation?

JS: Major players such as MGM Mirage and Las Vegas Sands have publicly expressed an interest in taking advantage should efforts to regulate Internet gambling be successful.  NIGA has been consulted in regard to Congressman Frank’s Bill and this provides them with an opportunity to maintain their sovereignty.  They also have been given the same rights as the states.

BB:  The bills all stress regulation, licensing, safety, monitoring, etc.  Has there been any study done or any plan devised on HOW these activities would be incorporated?  Many of the offshore casinos today would be happy to comply with those regulations if there was a proven, cost-effective method available to them.  Those issues all apply to ANY online activity, and it seems to be a constant battle to ward off identity thiefs, hackers, etc. 

JS: As you know, the proposed legislation treats all license applicants – US based and others – equally.  Currently, the Financial Crimes Enforcement Network (FinCEN) is responsible for regulating financial transactions involving casino activity in the U.S.  The Internet Gambling Regulation and Enforcement Act would have FinCEN extend this role and also monitor and regulate Internet gambling.   

In creating an effective regulatory regime, lessons can be learned from existing programs in countries where a regulated approach for Internet gambling has already proven effective.  There are also many safeguards required in a regulated environment that are currently being implemented by many Internet gambling industry-leaders.   

There has not been a study done on how FinCEN would regulate Internet gambling, but the framework and tools are in use in other countries and have proven effective in protecting consumers.  Moreover, identity theft and hacking are problems that threaten all online businesses, and are not unique to the online gambling industry.  Many different people and companies are looking to develop solutions to minimize the threat from such activities across the board. 

BB:  Many American citizens have become disinterested in politics because of the incredible amount of nonsense that goes on in Congress.  A vicious cycle has begun that begins with Americans not exercising their right to vote…..politicians taking office or remaining in office who don’t have the pulse of their constituents….who as a result get little accomplished during their terms….which in turn creates the disinterested public.  What kind of message can you give to the readers of Bonusbabe and Betting77.com, about the importance of remaining aware of pending legislation and the current issues that may affect their lives? 

JS: If you are concerned about protecting your right to gamble online, we need your help in building support in Congress for the Internet Gambling Regulation and Enforcement Act.  Grassroots support of the legislation is critical to ensuring momentum is maintained as the bill is debated in Congress.  To protect your right to participate in this form of entertainment we encourage you to take action through the SSIGI website.

Rather than prohibit a popular recreational activity, the government should regulate Internet gambling to provide basic protections to guard against the risks of underage and compulsive gambling, fraud and identity theft.   

Please register your support by visiting the Safe and Secure Internet Gambling Initiative, www.safeandsecureig.org, where you can contact your elected representatives and ask them to support this important legislation.

The SSIGI website contains a wealth of information regarding online gambling, the legislation surrounding it, and the safeguards that would protect the consumer.  Bonusbabe.com would like to sincerely thank Jeff Sandman for his time, and would like to encourage all our readers to check out www.safeandsecureig.org.  Your input and support are needed!