"Creates a world of unnecessary risk and problems for law enforcement and consumer."
Senate leaders received some needed support Monday as they continued to try to move online gambling legislation through Congress during the lame-duck session, a tough task made tougher with the fiscal cliff looming and a key conservative ally retiring.
The American Gaming Association (AGA) launched a lobbying and educational effort urging Congress to pass a federal online poker bill by the end of the session in an effort to block gaming's rapid expansion on a state-by-state basis.
"Without swift congressional action, the U.S. will soon see the largest expansion of legal gambling in its history," association President and CEO Frank Fahrenkopf Jr. said.
Fahrenkopf said that without federal guidelines the result will almost certainly be inadequate oversight that "creates a world of unnecessary risk and problems for law enforcement and consumer."
Earlier this year, Senate Majority Leader Harry Reid, D-Nev., and Minority Whip Jon Kyl, R-Ariz., began crafting legislation that would legalize online poker while banning other forms of Internet gambling.
The decision by Reid and Kyl to craft a new online poker bill was prompted partly by a new interpretation of the Wire Act that the U.S. Department of Justice released late last year. The department reversed course in deciding that the 1961 federal law that bans wagering over telecommunications lines applies only to sports betting.
Fahrenkopf said that with Kyl's departure from the Senate next month it was "critically important to push for legislation now." A federal online poker bill faces several hurdles, especially with congressional Republicans on Monday introducing their own proposal to avert the fiscal cliff - a combination of more than $600 billion in U.S. spending cuts and tax increases that will start taking effect in January if Congress doesn't act.
"Kyl is critically important in convincing other conservatives that something must be done," Fahrenkopf said.
The bill would establish a framework to license and regulate Internet poker companies, and to assist in the growth of a U.S.-based online poker industry.
The bill would also punish overseas providers that ran online poker games in the United States and continued to take bets from American players even after Congress enacted online restrictions in 2006. It's aimed at companies like PokerStars and Full Tilt Poker, whose owners were arrested and their sites seized on April 15, 2011.
The "penalty box" provisions would prohibit those companies from applying for an online poker license for five years and from selling their trademarks or software to others seeking a license.
The Unlawful Internet Gambling Enforcement Act of 2006, or UIGEA, prohibited gambling businesses from knowingly accepting payments in connection with online wagers in the United States.
Fahrenkopf said his group has seen a draft version of the bill, The Internet Gambling Prohibition, Poker Consumer Protection and Strengthening UIGEA Act of 2012. Although it might not be the bill's final version, Fahrenkopf said his organization "supports the general provisions."