This week’s Gambling Compliance podcast looks at how recent events have proved once again how hopes of even tiny steps in the US with regard to online gaming can be stymied by a political process little understood outside of the Washington DC Beltway – and how the industry’s California dreaming will likely turn out to be just that.

With the UIGEA act now approaching its second birthday, attempts to lessen its impact have had negligible success so far – Congressman Barney Frank’s moves to block enforcement of the financial measures attached to the bill floundered earlier this summer.

Now a bill to clarify the illegality of online sports-betting in the US and at the same time retrospectively absolve those companies that offered only poker and casino and subsequently ceased doing business in the US after the act was passed, has become the focus of a heated spat.

The bill would clearly help those UK-listed companies like PartyGaming and 888; but US pro-internet gambling lobbyist Joe Brennan of the IMEGA group accused the London –based Remote Gambling Association of naivety in backing bills that had little chance of success, and meddling in things they did not understand  “No where else in the world are the courts empowered as a peer in government, equal to the executive and the legislative branches. Our Federal courts have more power than the WTO or any other extra-national body. Europeans do not know or do not believe this. We know this.”

It may be the height of summer, but for US politicians the flip-flop is never a good fashion accessory. As Bennan makes clear, the overwhelming majority of Congressman voted in favour of UIGEA; to be seen to switch positions on the issue less than two years later could be political suicide in an election year.

In fact the consensus at a recent Montreal conference on I-gaming developments in the US suggests the industry’s best approach towards the US for the time being will be survival.
If further confirmation were needed that online gaming faces powerful opponents, it came with the news this week from California.

A much-watched proposal that could have brought about the introduction of legal intrastate online poker in the state of California cleared another legislative hurdle this week.

Introduced by Van Nuys assemblyman and democrat Lloyd Levine, the bill was proposed as a means to study the online poker industry to determine whether it could be beneficial to legalize online poker in California.

But even mentioning that the bill should draft guidelines for possible legalization has proved too much for powerful Indian gaming interests to swallow.

While the revised measure passed through the Senate Appropriations Committee this week, the bill now finds itself in a more precarious position than ever, needing to secure at least $268,000 in funding ,and facing stiff opposition from a number of Californian tribes.

If the bill fails to progress by November 30th, the end of the current two-year legislative cycle in California, it will die and be returned to the drafting board.

Sacramento political commentator Steve Wiegand observes the bill is set to drift because, "it would cost money to do, and there ain't no money. Bills with price tags aren't moving until there's a budget."

This situation may well satisfy tribal gaming interests who have expressed their concerns that the guidelines proposed push progress on the measure too fast.

A spokesperson for assemblyman Levine’s office told GamblingCompliance, “There is a real problem that some of the language in the bill is causing heartburn for the tribes, and they think that drafting guidelines will amount to putting the cart before the horse.”

In any case the California State Assembly adjourns later this month leaving only a few legislative days left to pass the bill, and one of the bill’s sponsors Jim Tabilio of the Poker Voters of America has already indicated that they may instead choose to make another lobbying push next year, abandoning the current proposal.

Assemblyman Levine’s office is now reconciled to revisiting the matter in subsequent legislative sessions, but with Federal and tribal gaming opposition ranged around the measure no one should hold their breath.