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Commercial Casino Operators Prepare for Internet Gaming in the United States

November 3, 2011 | Posted by Seffernick, Aubrey | Print this page

Two U.S. companies, Boyd Gaming Corp. and MGM Resorts International, have entered agreements with an international online gaming company in anticipation of the legalization of online poker in the United States. MGM and Boyd plan to form a new U.S.-based company in partnership with Bwin.Party Digital Entertainment PLC. Although Internet gambling is illegal in the United States the executives are betting on a change in federal law. "We see online poker as a compelling future growth opportunity for our company, and this agreement would position Boyd Gaming to quickly become a leader in the online poker market in the United States," Boyd CEO Keith Smith said. “It's all about preparing for the eventual opening of the market,” Bwin.Party Co-CEO Jim Ryan stated. “There's been an awful lot of momentum at the state and federal levels.”
The news comes on the heels of the U.S. House Energy and Commerce Committee’s Subcommittee on Commerce, Manufacturing, and Trade hearing on online gambling entitled “Internet Gaming:  Is There a Safe Bet?” held last Tuesday.  Ernest Stevens, Jr., Chairman of the National Indian Gaming Association (NIGA), testified at the hearing. In his testimony, Mr. Stevens said “Any federal Internet gaming legislation must also allow tribal governments to have an early entrance into Internet gaming, with a limited period of exclusivity. Carving out exemptions for certain states or gaming industries while violating existing tribal-state compacts is unacceptable to tribal governments and raises major concerns . . . " Mr. Stevens also reiterated that the Indian Gaming Regulatory Act (IGRA) requires that all tribal gaming revenue must be used for government and public purposes and cannot be taxed by the federal or state government. The House majority staff prepared a memorandum regarding the hearing. 

A number of Internet gambling bills are pending in Congress this session. In March of this year, Representative John Campbell (R-CA) introduced H.R.1174, the Internet Gambling Regulation, Consumer Protection, and Enforcement Act. The bill more or less mirrored two earlier bills proposed by Rep. Barney Frank (D-MA). The sponsors of H.R.1174 say that it would license and regulate Internet gaming while providing safeguards for consumers and much-needed revenue. Another online poker bill that appears to be generating discussion on the Hill was proposed by Congressman Joe Barton (R-TX), H.R. 2366, titled the Internet Gambling Prohibition, Poker Consumer Protection, and Strengthening UIGEA Act of 2011, which has garnered 25 bipartisan cosponsors. This bill is also designed to legalize and regulate online poker in the United States.