Summary
A companion bill to Barney Franks' in the House, by Robert Menendez in the Senate, greatly increases the chance Internet poker will be made legal next year. Both bills favor land-based gaming companies getting into the act. But they differ on whether gaming will be limited to poker, and whether operators like PartyPoker, which pulled out of the U.S. market after the passage of the UIGEA in 2006, will be allowed back in.
Analysis
Barney Frank now has 60 co-sponsors in the House, including representatives tied to the land-based casino industry, including Shelley Berkley (D.-NV), who represents the Las Vegas Strip. Frank and the Democrats can get anything he wants through the House. But he has to have the support of the Majority Leader, to get it through the Senate. That is Harry Reid (D.-NV). So, both the Frank bills and the new bill from Menendez, who represents New Jersey, are biased in favor of established U.S. licensees. The patrons will be from the bigger states, California, Texas and New York, which are given only 90 days to opt out. There are significant differences in whether online casinos and lotteries will be allowed, tax rates, and lots of details. But for foreign operators the Frank bills look like a deadend, while Menendez expressly says that having taken poker bets from the U.S. cannot be used as a ground for denial of an Internet gaming license. Lobbyists for both Harrahs and PartyGaming are working hard on these issues. It will come to a head in hearings, possibly as early as this year. And probably a bill will pass and be signed into law before the Fall 2010 elections.
I. Nelson Rose consults with leading institutions through GLG
Analyses are solely the work of the authors and have not been edited or endorsed by GLG.
