Harry Reid Poker Bill 2010

While Harry Reid’s push to legalize online poker is believed to be a payback to the many casino interests that donated to Reid’s re-election campaign, Reid might have been planning this big push for months. Yet it all comes down to the next couple of weeks.

The poker blog Pokerati revealed in April 2010 that Reid’s office was preparing an online poker bill and was planning to introduce it to the senate by the summer.

Instead, Harry Reid (D-Nev.) went to work getting re-elected and did so successfully, many believe with the help of the millions in donations from large Las Vegas casino groups. In early December, it became apparent that Reid was finally pushing the online poker bill. Some say it was to be attached to “must pass” legislation like the current tax bill winding through the lame duck congress, but according to many reports, the poker bill was not attached to President Obama’s far-reaching tax relief bill that was formally introduced last week.

In 2006, HR4411 (the SAFE Ports Act) was passed into law during that year’s lame duck Congress with the bill attached that prohibited companies from making transactions with Americans playing online casino games. That bill, later called the Unlawful Internet Gambling Enforcement Act, became effective in June of this year.

Since June, there have been rumors of a number of other bills that would allow Americans to play online poker and other casino games with companies operating in the U.S. The most notable of these bills was HR2267, a bill sponsored by Rep. Barney Frank (D-Mass.), but it has slowly died in committee.

Instead, all eyes have turned to Reid’s bill. Though some details have changed over the many days that it’s been pitched through congress, and there are actually two different bills that have apparently come out of Reid’s office, there is some basic understanding:

• The bill would not legalize other forms of online gambling, only online poker
• There is a 15-month waiting period before any licenses would be issued
• States can opt in or out of legalizing online poker (estimates are that at least 40 states would allow online poker)
• The player pool from the U.S. would be segregated from the rest of the international playing pool for as many as three years after the first license is issued in the U.S.
• Owners of companies found operating an online poker room without a license could be subject to a five-year prison term and $1 million per day penalties

The most controversial element is the seeming preference Reid’s bill would provide to existing land-based casinos, like MGM and Caesar’s, both of which donated millions to his re-election campaign. Reid, in turn, issued a statement last week that read in part:

“Experienced regulators already trusted by millions of Americans will maintain oversight and reputable operators with proven track records will provide a secure gaming environment for Americans.”

The American Gaming Association and the Poker Player’s Alliance have both come out in favor of the bill, with the PPA sending an email blast to its members that read in part, “we are currently working very hard to ensure that the final bill is something the poker community can embrace, but it won’t be easy. We have our detractors and even other gaming interests do not fully appreciate the current marketplace, nor do they respect the ability of Americans to continue playing online unless they control the system.”

There are few bills left to be considered by the current Congress that the poker bill could be attached to, other than the “omnibus”, or the budget bill still to be passed. It’s the only bill currently pending that the poker bill would appropriately be attached to since passage of the poker bill could bring billions into both Nevada casino and federal government coffers.