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Federal Legislation Near?

While Nevada is pressing ahead with plans to have intrastate online poker in full swing by the end of the year, federal legislation is being put on hold. “Political gridlock in Washington and retirement of key proponents of online gaming could push discussion of the issue into 2013.” That was the view of the Las Vegas Review-Journal last week.

There still may be hope for federal legislation in 2012, however. A summary of Harry Reid and Jon Kyl’s eagerly anticipated online gambling bill has been leaked this week, and it outlines the Senators’ attempts to strengthen anti-gambling laws in the United States—with notable exceptions for online poker, online lotteries and off-track horse race betting.

The pair is calling for the formation of the Office of Online Poker Oversight (OOPO), a part of the Department of Commerce, to oversee the regulation of the industry. Only currently licensed brick-and-mortar operators would be granted online poker licenses for the first two years.

The bill would also restrict entities (for five years) that were involved in online gambling in the US after the UIGEA was passed in 2006. A “whitelist” of permitted operators would be issued to financial institutions, which would be required to block transactions from “blacklisted” operators.

Online operators would be subject to a 16% tax, with 14% going to states and tribes and the other 2% to the federal government to cover regulatory costs.  

Interstate poker between participating states would be permitted, but the player pool overall would be US-only. Further, businesses would not be allowed to offer public access to online gambling and internet gambling cafes would be strictly prohibited.

Reid and Kyl’s bill is expected to be introduced in the lame-duck session following the presidential elections later this autumn. If introduced, states would undergo an opt-in procedure that would require a majority vote in each chamber of the state legislature to pass. A blackout period of 15 months would then go into effect before operators would be allowed to launch online platforms.


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