HR 2267 Companion Bill Moves Ahead

Representative Jim McDermott from Washington had introduced a companion bill to HR2267 that sought to tax online gambling and use the revenue to fund foster care programs. It was called the Gambling Regulation and Tax Enforcement Act. All along the focus had been on Barney Frank's HR 2267, which was for legalization and regulation of online gambling. The HR 2267 has been stuck in limbo, whereas McDermott's bill has been scheduled for a hearing on May 19 and May 20.

The Gambling Regulation and Tax Enforcement Act also known as HR 4976 was introduced in March 2010, almost a year after Frank's bill. It has only 3 co-sponsors, including Barney Frank, compared to over 60 for HR 2267. All of them are Democrats. One reason why McDermott's bill is being taken up ahead of HR 2267 is that it is in the House Ways and Means Committee. On the other hand HR 2267 is in the House Financial Services Committee, which is choc-a-block with more pressing matters in these economically hard times. The hearing on the HR 2267 was postponed last month and no fresh date has been set. Most members of the Ways and Means Committee would not be conversant with issues related to online gambling. The Poker Players Alliance is stepping in and trying to inform committee members about issues at hand. John Pappas, executive director of the alliance said, " we're spending a lot of time between now and then to talk to as many folks as we can on the committee." Incidentally HR 4976 has also been sent to House Education and Labor Committee.

The aspects of online gambling that this bill is dealing with are somewhat different. What the legislators will have to do is ascertain how accurate the estimates floating around of tax revenues from online gambling really are. And they will have to take a call on whether these revenues will survive over the long term so that they can be used to fund other programs. Social issues like problem gambling and customer protection could also come up for discussion.

Frank has also indicated that the HR 2267 could have a hearing in May. Frank's other bill seeking to postpone the implementation of the UIGEA Rules seems to have been given up. These rules now come into force on June 1, having already received an extension of six months. Industry observers opine that there is practically no chance of a second extension.