The Internet Gambling Prohibition, Poker Consumer Protection, and Strengthening UIGEA Act of 2012 — the bill that has come to be known as the Reid/Kyl bill — found an “ally” in the American Gaming Association (AGA) after the industry lobby group announced a campaign to have an online poker bill passed post haste.
According to the AGA, unless Reid/Kyl (or something similar) passes, the US will see a “widespread legalization of all types of online gambling and a state-by-state patchwork of regulations that puts gaming patrons, problem gamblers and minors at unnecessary risk.” Sounding very much like people looking to abrogate the traditional rights of individual states to regulate gambling as they see fit, the AGA insists that while individual states have the freedom to license and regulate online poker, they can only do so while adhering to the federal guidelines set forth in Reid/Kyl.
The AGA’s support of the general provisions contained in Reid/Kyl means that any form of online gambling that isn’t poker or horse racing would be out of bounds; no online sports betting, instant-win lottery tickets, slots or other casino games. It’s not the least bit surprising to see the AGA take this stand, as it represents the commercial casino entertainment industry, whose online preferences are in perfect synch.
Reid/Kyl has driven a wedge between groups that either stand to gain or lose something by the bill’s passage. For instance, state lottery providers want to see the bill scrapped while convenience stores are pushing rather aggressively for it to pass. According to The Hill, state lottery operators claim they would be negatively affected by the inability to offer a full variety of products online. The bill does allow lotteries that draw winners no more than once a day to sell their tickets online, but any other type of game — particularly instant-win games that simulate scratch-off cards and casino-type games — would be “scratched off” the Internet. Reid/Kyl’s restrictions aren’t lost on Arch Gleason, president and CEO of the Kentucky Lottery Corporation and one of the strongest voices opposing the bill. There is a sense of urgency,” he said. “If this attached to legislation, this can have a negative impact on state lotteries and how their funds are raised for public benefit.”
“It unfairly limits the states’ rights to determine their own destiny,” Gleason added. “The states stand to lose a fair bit of money if they decided to opt in because of the restrictions in the bill.”
Gleason’s words reflect the stance the National Governors Association (NGA) took last month when it voiced its opposition to Reid/Kyl, stating that the bill “in its current form is an unnecessary preemption of state authority,” especially after last Christmas’ opinion by the Department of Justice that interstate bets not related to a “sporting event or contest” are not prohibited by the Wire Act. Following that interpretation, states began to move forward with their own online gambling legislation, including Illinois, which was at the forefront of initiating the sale of online lottery tickets, and Delaware, one of the first to legalize online gambling, including casino and poker games.
The NGA argued that under the current set-up, states that “authorize gaming in whatever form derive significant revenues critical to help fund programs for education, senior citizens, military veterans, and other important services.” If Reid/Kyl was to become law, the states’ authority to legalize whatever form of gambling they deem beneficial within their borders would be effectively neutered by federal limitations.
Despite the AGA’s support for Reid/Kyl, it’s no guarantee that the folks on Capitol Hill are going to buy the misguided message the AGA is selling. The chief beneficiary of Reid/Kyl remains Nevada, and there are 98 senators representing other states, many of whom either (a) don’t see this as a priority or (b) don’t fancy having to explain why they took money out of their state lottery’s wallet and gave it to voters in a state they don’t represent. Small wonder that Sen. Reid’s on-again, off-again BFF Sen. Dean Heller recently mused to the Las Vegas Review-Journal that getting the requisite number of Republican votes to support Reid/Kyl “is going to be tough”.
