From the office of U.S. House Rep. Peter King (R-NY)

FOR IMMEDIATE RELEASE
June 6, 2013

King Introduces Legislation to Legalize Internet Gambling, Protect Consumers

Washington, D.C. – Today, Rep. Peter King (R-NY) introduced the “Internet Gambling Regulation, Consumer Protection and Enforcement Act of 2013” which will legalize online gambling and address the regulatory uncertainty surrounding online gambling resulting from a December 2011 Justice Department ruling.
After years of prohibiting online gambling, DOJ’s 2011 ruling made online gambling of every type, except sports betting, legal at the federal level if it is lawful at the state level. But while online is legal, it is not uniformly regulated, the operators are not licensed, and consumers lack protection from fraud and abuse. With states approaching this issue piecemeal, it can lead to conflicting or inconsistent laws from state-to-state, varying levels of consumer protection, and a perverse incentive for a race-to-the-bottom on standards to attract gaming operators and revenues.
The current situation is not in the best interest of the American people. “A common federal standard will ensure strong protections for consumers, protect against problem and underage gambling, and make it easier for businesses, players, lawmakers, and regulators to navigate and freely participate,” said Rep. King.

The Internet Gambling Regulation, Consumer Protection and Enforcement Act of 2013 will remedy this situation by establishing a system of licensing and regulation at the federal level, while grandfathering any existing state activity that is limited to the geographic confines of the state, such as the laws in place now in Nevada, Delaware, and New Jersey. Online gambling on horseracing, currently permitted in the U.S. under the Interstate Horseracing Act, would also be grandfathered in. Specifically, the bill:

• Establishes a uniform federal system for states that choose to participate, enabling adults to gamble online, with controls to protect against compulsive gambling and to prevent underage persons from gambling.
• Creates an Office of Internet Gambling Oversight in the Department of the Treasury, and establishes criteria for state and tribal bodies to carry out licensing activities on behalf of the federal government. The federal government retains overall jurisdiction and oversight, but relies on state expertise for licensing of operators, enforcement and other activities, under a common federal standard.
• Gives any state or tribe that does not wish to participate in the federal interstate system the ability to opt-out and prohibit online gambling or to operate intrastate gaming within its borders as authorized under state or tribal law.
• Applies tough penalties to unlicensed operators. One major goal of this bill is to put them, and their off-shore, untaxed, unregulated services, out of business, forever.
• Shuts down money launderers and criminals seeking to use internet gambling to move funds. Regulating online gambling at a federal level will clearly separate illicit operators from law-abiding licensed operators.

More from Mr. King's office; one page summary of the bill.

Outline of the King Internet Gaming Legislation
“Internet Gambling Regulation, Enforcement, and Consumer Protection Act of 2013”

1. Legalizes all forms of online gambling, with the exception of sports betting, when offered by federally licensed and regulated operators who meet strict standards for integrity and controls to protect consumers.

2. The federal government retains overall jurisdiction and oversight over federal internet gambling, but relies on state expertise for licensing and enforcement under a common federal standard. The rationale for a federal standard is that, as a result of the DOJ revised opinion on the Wire Act released in December 2011, states are racing to adopt varying laws legalizing online gambling. A common federal standard will ensure strong protections for consumers, protect against problem and underage gambling, and make it easier for businesses, players, lawmakers, and regulators to navigate and freely participate.

3. Creates an Office of Internet Gambling Oversight in the Department of the Treasury. As the federal regulator, the Office would oversee state and tribal agencies carrying out licensing activity, and would have independent authority to carry out licensing activity for any entity that chose to apply directly to the Office instead of an existing state or tribal authority. The bill establishes criteria for state and tribal bodies to carry out licensing activities on behalf of the federal government.

4. Gives any state or tribe that does not wish to participate in the federal interstate system the ability to opt-out and prohibit online gambling or to operate intrastate gaming within its borders as authorized under state or tribal law. To opt-out, the state governor or tribal leader would simply notify the Treasury of the decision to opt-out, or the legislature can pass a law to opt-out.

5. The Act treats casinos, Indian tribes, lotteries, and other potential operators equally. None would receive preference in licensing, and once licensed an operator would have the authority to take play on all types of online gambling as authorized under the Act.

6. Requires qualifying licensing bodies to prescribe regulations to prevent underage gambling and enforce fair play, and for the development of a compulsive gaming, responsible gaming, and self-exclusion program for each licensee to implement as a condition of licensure, and minimum standards applicable to such programs.

7. Revises the Public Health Services Act to allow federal funds to be used to treat gambling addiction – currently federal health funding cannot be used to help those who suffer from this addiction.

8. Applies tough penalties to unlicensed operators. One major goal of this bill is to put them, and their off-shore, untaxed, unregulated services, out of business, forever.

9. Shuts down money launderers and criminals seeking to use internet gambling to move funds. Regulating online gambling at a federal level will clearly separate illicit operators from law-abiding licensed operators.

10. Grandfathers online gambling operations offered by states and tribes as of the date of enactment.

Full text of the bill can be found here.

John A. Pappas
Executive Director, PPA

What about player penalties for playing on off shore sites?

unless this gets 100+ bipartisan co-sponsors by August; it's DOA

Well.... GOGOGOGOGO

Opt out is good obv.

It's definitely ambitious, seems to be a reasonable bill. It does represent a huge expansion of gambling nationwide though, and that will run into some resistance to be sure.

I would think that Reid would oppose it though, if not strictly as a partisan issue then because it opens the market pretty wide, mostly at Nevada's expense. And him being the Majority leader in the Senate, a companion bill seems unlikely.

No bad actors clause? Or would that be left to the regulating body?

What about the tax?

When can we start yelling "one time?" What kind of process are we looking at? Are future revisions possible with something like this?

I'll have full cliffs in a little while. Starting to read through now.

I like opt out. Sad that a governor can unilaterally opt out though. Perry will likely opt out for Texas. I also think the bill is probably too ambitious to pass. Opening up all gambling except sports betting is a pretty big expansion of online gambling. Somehow I doubt they can get enough votes for this as a standalone bill. Still for the most part it sounds good at first glance.

I am by no means an expert, but after reading the bullet points above provided by Mr. Pappas, this bill seems fantastic, if it is passable. I would love to hear from those with more expertise as to the % chances something like this gets passed. Or do we just have to wait and see?

Obviously this is really great news but it will have a lot of hurdles for it pass. I am suprised there is no "bad actors" clause in this bill yet but maybe the feds will leave that up to the states. Obviously for poker, player pools and interstate play is key!

That this came from King surprises the hell out of me. Way to go, Congressman.

Wow. This talks about all non-sports betting internet gaming. The compromise to the social conservatives of banning everything except poker is gone. And the default is the states are opted in.

Yes, this would be a major expansion of igaming, but the status quo is already a major expansion. The debate now is what should be the nature of this expansion, ie what role if any the federal government should play. Things have never looked better for US online poker, that much is obvious

Correct the bill does not include a bad actor clause. It preserves the rights of state regulators to determine the suitability of their licensed operators. I think that is a reasonable approach.

The bill does not include a tax title, therefore, a seperate tax bill will need to be introduced or attached to this bill at a later point in time.

John A. Pappas
PPA, ED

Looks good so far. I really like the state opt-out provision too.

Looks good so far, thanks for the update John!

Looking forward to reading PX's cliffs

Does this bill allow states discretion on how they may participate in the regime?

For example, could a state choose to allow their residents to participate in tournaments only? Could a state restrict access to temporary domiciles or restaurants and bars, etc.? Or is it all in or fold?

I believe the whole idea behind a Federal bill is to prevent these inconsistencies

My apologies to the Congressman as I got Peter King of New York confused with Steve King of Iowa.

This seems like a bit of overkill, setting up a federal oversight agency, and a federal license, yet allowing, even encouraging States to keep on licensing before and after this passes.

Interesting treatment of tribes.

Not so much in this for lotteries that they do not already have, except a federal blessing of online sales within a State.

Would amend federal criminal law to make offering poker a federal crime (10 years in jail) AND players who play on unlicensed sites forfeit their balances.

Full blown casino would be allowed and "Poker only" looks deader than Julius Caesar going forward under this bill.

My take ... this likely is not passing the House, let alone something comparable coming from the Senate..... although it makes deals by Nevada much easier if it passes.

A federal bill blessing State licensing and Multi-State compacts would have been MUCH cleaner, but the folks writing bills do not yet seem to want that.

I'm getting close to half way through. So far I like EVERYTHING about it.

I called Peter King and took him to task as one of his constituents after he allowed Frist to attach UIGEA to Port Security in his committee. At the time he apologized and said he would work hard to do undo that error. I am happy to see that he is now fully on our side in this fight.

He has earned back my vote.

He's been strongly on our side since right after that fateful decision regarding UIGEA, having cosponsored every poker bill. Great to see him stepping up and sponsoring this one!