Frank proposals on US web gaming 'could take 18 months'
Posted by Gavin Smith on 13 May 2009 at 09:05
America's approach to online gambling could be in for an unpredictable period again after a new bill introduced last week by Barney Frank.
The Chairman of the US House of Representatives Financial Services Committee has announced the first step in a process designed to overhaul the rules introduced in October 2006 during the Bush tenure, banning internet gaming in the USA.
It has sparked some optimism across the pond among British-based web gaming firms, but some commentators are warning there is still a long way to go and that the bill, although it appears to be gathering pace and looks set to come up for a vote quickly, is far from a free-for-all guarantee.
The Times reports share prices for the likes of 888, Sportingbet and PartyGaming have improved since the announcement, but also warned investors should "tread cautiously" if they are looking to benefit in anticipation of a full overhaul of the law.
Although the bill could come up for a vote by August, it will face considerable anti-gambling lobby opposition, and will also have to compete for political space with a number of issues already filling the in tray of new president Barack Obama.
According to the Times, even if Mr Frank gets his bill through, a year and a half could pass before it ends up as a law and then there is no certainty that overseas operators will be granted licences under it. Recently PartyGaming reached an agreement with the US authorities to avoid prosecution. But in doing so, the Times reports, it had to admit that before October 2006 it targeted American players, 'resulting in the processing of transactions that were “contrary to certain US laws” ', which could harm an atempt in future to get a licence.
Sportingbet and 888 are also working on similar settlements, but according to the Times may also have to make similar admissions, although the Sportingbet situation is not as clear because it is involved in sports betting.
Mr Frank's plans could also be vulnerable to the fact that many states could simply make up their own rules even if the bill is passed. According to the paper, James Hollins, an analyst at Daniel Stewart, believes that the plan is geared to allow individual states and Indian tribes to issue their own licences, allowing other states not to get involved if they don't want residents to be involved in internet gaming.
The bill could also come up against opposition from some of America's biggest casino and gaming operators, not least the giants of Las Vegas, Nevada. Some companies could take their own form of action if they feel threatened by the re-emergence of online gaming, and the Times reports this is influenced by the fact gaming revenues in Nevada have recently run up their 15th monthly fall in a row. Some may attempt to sign licensing deals with firms based abroad in order to get access to the technology an expertise that they lack in terms of online gaming.
British companies will welcome the Frank approach, but with the US dealing with a struggling economy and lobbyists likely to mount a stern challenge, the pre-2006 days look a long way off yet.
