American Gaming Association Shifts Position

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Last week Senate Majority Leader Democrat Harry Reid suddenly changed his stance on online gambling, stating that he is willing to support online poker only. This did surprise many industry watchers who are closely following the moves of those who would have a say in the final outcome. Now an article published in the eGaming Review suggests a possible reason for the Senator’s shift in position.

Senator Reid is from Nevada and would hold the interests of his constituency above all. The land casinos have a significant stake in the constituency. The American Gaming Association (AGA) represents the interests of the land casinos of Nevada. The eGaming Review article cites an interview with AGA president Frank Fahrenkopf in which he appears to have considerably softened his stand on online gambling. The article indicated that the AGA has started discussing legalized and regulated online gambling with those involved in drafting Barney Frank’s bill and with other agencies pushing for a regulated online gambling regime in the United States. However in the interview Fahrenkopf maintained that the official position of the AGA is that it is monitoring the situation.

Several other interesting aspects about the frame of mind of the AGA were revealed in the article. The AGA considers the 2006 Unlawful Internet Gambling Enforcement Act (UIGEA) an unsuitable piece of legislation. Fahrenkopf criticized the lack of clarity in the UIGEA. He echoed Reid when he said that if they could get only poker out of the purview of the UIGEA they would be very satisfied.

What came through in the interview was not an urgent desire to see online gaming become a reality but an acceptance of its inevitability. Therefore the priority of the AGA is to protect the offline interests of its member land casinos who have been in the doldrums since the economic turndown. The AGA is getting involved with online gaming legislation because it does not want the federal government to, intentionally or unintentionally, do something that harms the industry.

One of the key issues in this regard is the proposed treatment of online gambling sites that have continued to illegally accept bets from players in the United States after the UIGEA was passed. The AGA is working to ensure that provisions are put in place that would prevent these operators from cashing in on the opportunity created by legalization of online gambling. Fahrenkopf said that he had spoken to legislators who say, "So, you deny someone a license because they have been operating in violation of US law, that’s a penalty for what they did. But if you let them turn around and sell their assets, and make millions of dollars, they have benefited from violating the law, they shouldn’t allow that."

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