House Subcomittee Holds Hearing on iGaming Industry

December 10, 2013
House Subcomittee Holds Hearing on iGaming Industry

The issue of online gambling was front and center on Tuesday the House Subcommittee on Commerce, Manufacturing and Trade held their latest hearing on iGaming. and various other sources reported on the hearing as lobbyists on both side of the issue testified in hopes of swaying Congressional support.

Geoff Freeman, CEO of the American Gaming Association and John Pappas, Executive Director of the Poker Player’s Alliance, both stood in support of iGaming. Freeman pointed to the iGaming black market that currently exists as a reason for legalization. Millions of Americans currently gamble with sites not licensed in the US and Freeman claimed that demand will grow.

Pappas shared the same sentiments but primarily supported the Internet Poker Freedom Act of 2013 drafted by subcommittee member Joe Barton. They heralded the Barton bill as giving states a way to implement their own iGaming regulations.

Several opponents to iGaming were present during the hearing. Les Bernal with Stop Predatory Gambling testified that government sponsored gambling is a proven failed policy that has failed to meet its proposed goals in the post. This type of policy failed primarily because it was a policy that he claimed exploits citizens and opens a gap between the rich and poor. He finally claims that gambling is not a sustainable revenue source.

Perhaps the most controversial witness before the subcommittee today was Andrew Abboud, the Vice-President of Government Relations for the Las Vegas Sands. Abbound spent the majority of his time trying to convince the subcommittee that a ban on iGaming is necessary. His testimony cited that iGaming was a significant threat to those deemed “most vulnerable” in society. As expected, children were highlighted as potential victims to iGaming. Holding up a cell phone, Abbout stated, “The thought of every single one of these becoming a casino should concern you.”

Abboud’s comments were perhaps the most criticized of the hearing. Jan Schakowsky (D-Ill) called his concerns “a little hypocritical” due to the fact that the Las Vegas Sands offers mobile gaming to its guests. According to Rep. Barton, “What you’re advertising…is the same thing that we’re talking about. It’s just a matter of how wide the geography is.”

Abboud followed up those comments by reminding the subcommittee that they are able to easily confirm who is gambling in their casinos. “That’s a very controlled environment in a regulated state.”

Adversely, the Poker Player’s Alliance in their testimony inadvertently may have negated Abboud’s “controlled environment” argument. During their testimony, they revealed that age verification was highly successful in Nevada and that there had not been a single reported case of underage iGaming in the state.

Pappas and Freeman both stood together and reiterated that a regulated market is best to ensure that player rights are protected. “As an industry, we are completely aligned on the need to protect vulnerable populations, though we may disagree on how best to do so.”

With iGaming finally beginning to expand outside of Nevada, one has to wonder whether Congress is contemplating a move on the issue or is taking an elaborate “wait and see” approach to the matter. While these hearings make for great publicity for the issue, the next 12 to 24 months could prove to be the most important as Nevada, New Jersey, and Delaware are now offering fully legal iGaming. We will have a better picture on what works and what needs improvement in the industry and could begin to see real progress toward a federal solution.

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