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House Hearing for Internet Gambling Bill

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WASHINGTON, July 23, 2010- H.R. 2267, the Internet Gambling Regulation, Consumer Protection and Enforcement Act, will require online gaming sites to purchase licenses and subscribe to existing gambling laws. In a hearing this week the main stakeholders voiced their concerns.

Edwin Williams, president and CEO of Discovery Federal Credit Union represented the Credit Union National Association (CUNA). He said the Unlawful Internet Gambling Enforcement Act (UIGEA) has unreasonable compliance costs because credit unions and other financial institutions can be liable if transactions with illegal Internet gambling providers are approved. However, the act does not give an actual definition of what constitutes “unlawful internet gambling” or a list of the known illegal online gambling providers. Williams said that the Treasury Department and Federal Reserve Board cannot find the illegal providers, so they pass the burden on to the private sector, where many of the financial institutions will struggle to comply.

However, Williams said that the proposed bill H.R. 2267 could help credit unions with those compliance costs. The bill would require Internet gaming providers to pay fees and have licenses. By having these sites federally registered, the credit unions could feel safer in making payments to them without fear of violating UIGEA.

Tom Malkasian, owner and director of strategic planning at Commerce Casino, said his company fully supports legalizing online gaming. However, he said he “must testify in strong opposition to H.R. 2267 as currently written, and urge members of the committee to vote against it barring numerous and significant changes to address what we view as the many weaknesses currently in the legislation.”

His criticized the projected revenues, $42 billion, that the bill’s supporters say will result from legalizing online gaming. He said those estimates are built off of unreliable information and false assumptions. The revenue estimates assume the internet sites would be American, but H.R. 2267 does not require that the sites be hosted in this country.

Malkasian also said the bill would constitute a violation of states’ and tribal lands’ rights, all of whom have their own gaming laws in place. Instead, he proposed amending the bill so that states and tribal lands could opt-in by voting in state legislatures of tribal councils, which would allow more time for public debate.

Lynn Malerba, chairwoman of the Mohegan Tribe in Connecticut, said that she is glad the federal government has worked with Native Americans on H.R. 2267, since Indian gambling has been the biggest economic benefit to the Native Americans. The Mohegan Tribe and a coalition or other tribes say that they support the bill’s vision that regulating internet faming can be possible.

She said the most important improvement in the bill would be a provision that makes it clear that tribal land governments and gaming facilities would be allowed to operate online gaming sites. She was also concerned that the bill could conflict with regulations in the Indian Gaming Regulatory Act, and wanted the committee to ensure that a combination of the two laws would not be too restrictive to tribal gaming facilities.

Law enforcement and anti-terrorism consultant and former federal prosecutor Michael Fagan was concerned with the costs of enacting the bill. He said he was positive that the bill would be much more costly and difficult to comply with than the current status quo. He has particular compliance concerns were with law enforcement, and said “it would be irresponsible to take any steps toward expanding the availability of internet gambling — such as giving up on controlling the problem — in the United States before first directing and funding the Department of Justice and/or the states’ attorneys general to enable a coordinated, systematic approach to enforcing existing laws prohibiting and taxing such conduct.”

Professional poker player Annie Duke spoke on behalf of the Poker Players Alliance, a group formed to combat efforts to eradicate online poker playing. She said the baseline issue of the bill was personal freedom, and that people’s activities should not be constrained in the privacy of their own homes by the government.

Duke said H.R. 2267 is not proposing to expand internet gaming, but it will simply provide a set of regulations and safeguards to an already growing industry. Instead of playing on foreign-regulated sites, American poker players want to play online on American sites, “which will provide even greater consumer protections for the player and yield badly-needed tax revenue for state and federal governments.”

Congressman Ron Paul also spoke at the hearing in support of the bill. He said it creates no new federal laws, only a process in which gambling sites comply with current laws. Paul felt like a ban on internet gambling is in an infringement on someone’s right to use their money as they see fit. And while he said he personally thought gambling to be a “dumb waste of money,” Americans have the right to take the same financial risks gambling that they do when buying a used car or investing in a hedge fund.

He urged his colleagues to support the bill, and restore the right of Americans to decide whether or not they want to gamble online.

Candidate Meets Web: Internet Campaign Directors on What Worked and What Didn't in 2008

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NEW YORK, June 23, Lunch – The final morning discussion focused on the 2008 online political campaigns, what worked and what didn’t, and the insiders’ perspective from the staffers who directed the Internet campaigns for the major candidates. On the panel, from left to right between moderators Andrew Rasiej and Micah L. Sifry are Mark Soohoo, in charge of Internet Communications for John McCain; Justine Lam, who spearheaded Ron Paul’s Internet campaign; Peter Daou, Internet Director for Hillary Clinton; Joe Rospars, New Media Director for Barack Obama; Mindy Finn, Online Strategist for Mitt Romney 2008; and Tracy Russo, Chief Blogger for John Edwards 2008.

The essential question for the panel is “has the Internet finally arrived as a campaign tool with a power that politicians both understand and can harness?” The essential answer is that not only do politicians understand the Internet and its influence, they’re even watching “that YouTube channel!”

Peter Daou was points to the fact that Hillary Clinton began her official campaign online as a sign of the importance of Internet marketing. For all of the candidates, websites and online video channels are not just part of a campaign, they now are a prerequisite and are integral to campaign preparation and launch. As Peter says, “the Internet arrived this election cycle.”

For John Edwards campaign, the power of the Internet was evident in the fact that he was able to extend his campaign beyond what could have been a debilitating loss in the Iowa caucuses. Likewise, the Clinton campaign may have been able to remain in the race longer because of the ease with which additional funding can be quickly obtained through online channels. Tracy Russo also cites the importance of senior staff reserving a seat at the strategy table for the Internet campaign staff as being a key enabler for increased utilization of the web during this cycle.

So the game has changed, but is this because the candidates are utilizing new media tools or just their staffs? The moderators are wondering how much the candidates actually contribute to online campaigns. Joe Rospars from Barack Obama’s staff says the candidates are definitely involved and have a particular interest in engaging the online community. Tracy Russo agrees and adds that nowadays, it’s no longer a staffer proposing and issue to a candidate or strategist, it’s a staffer backed by hundreds of bloggers and thousands of commenters who care about a particular issue that may not otherwise be brought to the candidate’s attention. But do the candidates actually respond to emails from supporters? Mr. Rospars says “you’d be surprised how many folks are able to get direct contact w/ candidates and campaign managers.”

Reflecting on the work of the Bush/Cheney 2004 campaign, Mindy Finn reminds the audience that it’s not just the online campaign that matters, and what she found most significant in her 2004 efforts was the way the campaign was able to connect Internet marketing to offline activities. For example, the Internet was utilized by the Bush staff to get out the message and motivate the grass roots to canvass and get out the vote on election day. Ms. Finn says it was about “empowering people who want to be a volunteer and putting tools and messages in their hands that they can then distribute to their friends.”

Mark Soohoo, a member of John McCain’s Internet Communications team, seemed to value this approach as well and in defense of his candidates less tech-savvy image stated that “you don’t necessarily have to use a computer to understand how it shapes the country…John McCain is aware of the Internet…he’s a man with a long history of understanding a range of issues.”

Expect the next big moment for Internet campaign marketing to arrive when Hillary Clinton and Barack Obama reach a deal on sharing their invaluable email lists. Peter Daou who still serves as Hillary’s Internet Director says some “unity emails” to Democratic supporters have already been sent out and that the Clinton staff is enthusiastic to contribute to Barack Obama’s campaign in any way possible.

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