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Casinos> 2007
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Pessimistic Outlook For U.s.
Online Gambling
American financial services group thinks
study is more likely than repeal in the immediate future
Stanford Financial Group, a privately held, wholly owned global
group of financial services companies has a pessimistic outlook
when it comes to online gambling in the U.S.A. in the wake of the
UIGEA, it seems. Its current report suggests that whilst a study
of the regulation of online gambling is possible, it is unlikely
that the Unlawful Internet Gambling Enforcement Act will be successfully
repealed.
"We do not believe there is the political will to overturn
this legislation or to carve out poker from the prohibition,"
reads the report. "More likely would be legislation authorizing
the National Institute of Science or a similar non-partisan think
tank to study whether Internet gambling could be effectively regulated
and taxed. We also expect the Federal Reserve to release shortly
the rules governing how banks should stem the flow of financing
the Internet gambling websites.
"In our view the Internet gambling ban [on financial transactions
with online gambling entities] benefited from a perfect storm of
political forces. Those who want to repeal the ban will not enjoy
those favorable political wins. As a result, we expect the ban to
remain and the bank regulations will take effect this year."
The report suggests that currently publicised attempts to overturn
the new law will "...open Democrats to charges of being in
bed with Internet gamblers. It also would link Democrats with disgraced
lobbyist Jack Abramoff."
Stanford feels that another difficulty could be that Republicans
might accuse Democrats of "tampering with criminal investigations"
and that strong anti-online gambling manouevring by Senator Jon
Kyl could muster enough support to overcome any filibuster attempt.
"Given these problems, we see only a 10 percent chance that
Congress lifts the gambling ban," the report opines, going
on to comment that it likewise holds out little hope that poker
will be defined as a game of skill and may thus be exempted from
the provisions of the UIGEA. It does, however suggest that there
is, at 20 percent a better chance for poker to prevail.
Stanford is a little more upbeat when it comes to the question
of whether there will be a study to determine whether online gambling
in the USA can be regulated.
"This is the option that has the greatest chance of passing.
It provides a means for [Representative Barney] Frank and others
who opposed the prohibition to declare victory without actually
overturning the prohibition. We doubt that Kyl and others would
expend substantial political capital to block an 18-month to 24-month
study of whether it is possible to regulate and tax Internet gambling."
Stanford's report concludes with the observation that by late June,
the U.S. Federal Reserve should have banking regulations in place
that will in all likelihood exempt checks and ACH transactions,
predicting that the Federal Reserve Bank has the discretion to make
these exemptions and probably will. Even so, the banks won limited
protection from court injunctions and may argue for further exemptions
that expand beyond just ACH transactions and checks.
__________________
"Many of life's failures are people who did not realize how
close they were to success when they gave up"
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