When the Internet Gambling Regulation, Consumer Protection and Enforcement Act of 2009 passed through the House Finance Committee last week, it immediately set the record for the farthest along any bill that considers legalizing online gaming has come. And it did so quite resoundingly, by a 41-22 margin, with a non-partisan mix of supporters.

Proponents of online gaming immediately congratulated each other and plotted strategies for taking it the rest of the way. But that’s where it may get more difficult. Just some of the hurdles remaining include:

• Nancy Pelosi: As the House Speaker, Pelosi determines what gets voted on and what gets tabled. While she’s close to chief sponsor, Barney Frank, it’s unclear where she stands. She has previously gone on record opposing online gaming, but that was at least four years ago.

• Sports leagues: The National Football League and other major sports leagues are adamantly opposed to any form of regulated online gaming. They led the charge against sports betting outside of Nevada and effectively crippled that form of betting by challenging the Delaware law permitting it there. Expect many legal moves to keep the Frank bill from becoming law.

• Native Americans: Because tribal interests are split on the advisability of online gaming, the opposition may garner enough support from tribes to keep the bill from passing. And even commercial gaming companies are split on the bill—with Steve Wynn being one of the most vocal opponents—so the casino gaming industry may speak with two voices.

• Harry Reid: If by some miracle, Pelosi allows a vote in the House and the bill gets passed, Harry Reid will hold the bill in his hands alone. And like Pelosi, he’s been opposed to legal online gaming for all of his career. But for most of his career, so were the major gaming companies. That’s changed now to some extent, so will Reid’s attitude toward the bill change? Yet to be seen. And making things more difficult, there isn’t a “Barney Frank”—someone dedicated to shepherding an online gaming legalization—to push it through the process.

• Time: With Congress now out of session for the summer recess, they don’t return until September 13 and remain in session only until October 8, when they break for the mid-term elections. With many important bills to consider and the distraction of ethics trials for two Democrat House members, Charles Rangel and Maxine Waters, the bill may be ignored or forgotten. And a “lame duck” Congress that serves from the post-election period until the new Congress is seated likely would not want to take up such a controversial bill.

• Republicans: And finally, the November elections promise a major defeat for the Democrats because of growing dissatisfaction with President Barack Obama and the Democratically controlled Congress. There is a real risk Democrats could lose control of the House, thereby losing the powerful role that Frank plays as well as many of the votes that are needed to pass it. Should that happen, it will be at least two more years if not more before it is reconsidered.

• Bottom line: The markup of the Internet Gambling Regulation, Consumer Protection and Enforcement Act of 2009 has been a real victory, but it’s only the first battle in a long and drawn-out war.

Meanwhile, the Federal Deposit Insurance Corp. sent a letter to all banks on June 30, advising them it was finally time to enforce the Unlawful Internet Gambling Enforcement Act of 2006. Frank had engineered several suspensions of the date for enforcement, but those expired on June 1. UIGEA prohibits banks and financial institutions like credit card companies from processing payments to or from online casinos.

Most banks were well prepared to implement the measure due to the delay in implementation. James R. Silkensen, co-president of the New Jersey Bankers Association, said it’s just “one more thing” a bank has to consider when processing payments.

“They'll need a little more due diligence when they get new customers,” said Silkensen.

By Roger Gros

Roger Gros is publisher of Global Gaming Business, a the industry’s leading gaming trade publication, and all its related publications. Prior to joining Global Gaming Business, Gros was president of Inlet Communications, an independent consulting firm. He was vice president of Casino Journal Publishing Group from 1984-2000, and held virtually every editorial title during his tenure. Gros was editor of Casino Journal, the National Gaming Summary and the Atlantic City Insider, and was the founding editor of Casino Player magazine. He was a co-founder of the American Gaming Summit and the Southern Gaming Summit conferences and trade shows. He is the author of the best-selling book, How to Win at Casino Gambling (Carlton Books, 1995), now in its fourth edition. Gros was named “Businessman of the Year” for 1998 by the Greater Atlantic City Chamber of Commerce.

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