Gambling News by Gambling Headquarters

In the high-stakes poker game of politics, online gambling lobbyists lost a monster hand late last month after Congress passed legislation prohibiting financial institutions from making payments to online gambling sites. The long-standing issue came to a head after presidential hopeful Senate Majority Leader Bill Frist, R-Tenn., became the torchbearer for conservative groups lobbying to ban Internet gambling. Despite repeated attempts by gaming groups such as the Poker Players Alliance and the International Interactive Alliance to stymie the debate, Frist's maneuvering proved too difficult to overcome. After unsuccessfully tacking the bill onto the defense authorization measure earlier in the week, Frist and House Speaker Dennis Hastert, R-Ill., were able to persuade the Republican leadership to add the measure to the Port Safety Act. Passed in the wee hours of Sept. 30, before Congress went into recess, the Internet Gaming Prohibition and Enforcement Act prohibits banks and financial institutions from processing payments for online gambling companies. Congress exempted state lotteries, fantasy sports leagues, horse race betting and Indian gaming from the legislation. "The politics of the moment got the bill passed," says Frank Fahrenkopf Jr., head of the American Gaming Association. The AGA, which had long been against regulating online gambling, did an about-face in April, advocating for the first time that Congress look at whether the technology exists to regulate online sites.

"While we were neutral [in the debate], we really thought the better way to go was a study commission," says Fahrenkopf.

The bill, eight years in the making, was a huge victory for social conservative groups and professional sporting leagues. They persuaded lawmakers to ante up and overcome any lingering Abramoff mystique. Former lobbyist Jack Abramoff, who represented eLottery Inc., was credited as one of the largest contributors to the defeat of a similar ban on online gambling in the House in 2001.

In the past five legislative sessions, bills banning online gaming have passed the Senate twice and the House once, just never at the same time. Advocates including Reps. Jim Leach, R-Iowa, and Bob Goodlatte, R-Va., and Sen. Jon Kyl, R-Ariz., have historically tried different legislative stratagems to pass the bill. But this time, Leach got Frist to promise to bring to the floor an online gambling ban while Frist attended a field hearing in July in Iowa, site of the first presidential caucus in 2008.

Currently, it is illegal for online gambling companies to operate in the United States or for U.S. residents to place bets on the Internet, with the exception of parimutuel horse racing, which enjoys an exemption from the law.

Frist's former aide Martin Gold of Covington & Burling led the charge for the National Football League, assisted by National Basketball Association lobbyist Frank Donatelli of McGuireWoods. While they pushed for the overall ban, Gold and Donatelli made the case to lawmakers that fantasy sports leagues should be left untouched.

"It's been 10-plus years that the NFL has been supporting legislation," says Joe Browne, an NFL executive vice president. "We don't believe that gambling of any sort is healthy for our league -- that it goes to the integrity of the NFL and, perhaps just as important, the perception of the integrity of our games."