Frank plots US Internet gambling ban repeal
No slam dunk
House of Cards U.S. House of Representatives Financial Services Committee Chairman Barney Frank's press office has confirmed that Thursday at 10am Frank will introduce legislation to repeal the controversial Unlawful Internet Gambling Enforcement Act (UIGEA). Frank's opposition to the UIGEA has been public ever since socially conservative Republicans snuck the legislation through on the back of an unrelated port security bill, but this is the first concrete step taken to undo the legislation itself.
Whether the legislation has the votes to pass through Congress and survive a potential Bush veto is another question entirely. Nonetheless, Frank’s maneuver is certainly good news for the online gambling industry, which went into free fall after the passage of the act. The publicly traded companies, listed primarily on the London Stock Exchange, lost about half of their value in the days after the act passed.
The act, which prohibits American financial institutions from processing internet gambling transactions, does not even take effect until June 2007, and might never spring in to life if Frank can push the legislation through. That would put major online gambling groups like Sportingbet (which flogged its American operations for $1) in the awkward position of having lost enormous shareholder value due to a law that never came to be.
The UIGEA galvanized gaming proponents of various stripes, and led to the creation of the Poker Player’s Alliance, which has picked up 350,000 members in the few months since its inception and has been pushing Congress to exempt poker from the law. Some in Congress believe that online gambling should be legalized on libertarian principles; others resent the way the law was rushed through after midnight without any debate on its merits. It remains to be seen if they have the votes necessary to repeal the UIGEA. ®
Burke Hansen, attorney at large, heads a San Francisco law office