Report: Odds against Congress overturning act

There's only a 10 percent chance that Congress will lift the Unlawful Internet Gambling Enforcement Act and legalize online gambling, according to a respected global financial service group.

There is not enough political support at this time to overturn anti-Internet betting legislation says a report compiled by the Stanford Group Company, which provides research and strategies for banks, financial institutions and investors.

“In our view the Internet gambling ban benefited from a perfect storm of political forces,” the report said. “Those who want to repeal the ban will not enjoy those favorable political wins. As a result, we expect the ban to remain and the bank regulations will take effect this year.”

The Unlawful Internet Gambling Enforcement Act (UIGEA), which was passed by President Bush last October, makes it illegal for banks, financial institutions and third-party payment processors to knowingly transfer money to online sportsbooks, casinos and poker Web sites.

Banks already have been complying even though the law isn’t formally expected to be implemented until around June. The latest bank to face U.S. pressure is Giro Bank in Curacao, where several prominent online sportsbooks are located, including Pinnacle.com and VIP.com. Pinnacle stopped taking bets from U.S. customers in January, while VIP is no longer accepting new bettors residing in America and Canada.

Earlier this month, U.S. Rep. Barney Frank, D-Mass., called the UIGEA stupid and said he might look into the possibility of having the law repealed.

If that happened, Republicans would accuse the Democrats of being in bed with Internet gamblers and tampering with criminal investigations, theorizes the Stanford Group Company in their report.

The Democrats also then would be linked with disgraced lobbyist Jack Abramoff, according to the Stanford Group Company.

“Given these problems, we see only a 10 percent chance that Congress lifts the gambling ban,” the report said.

The Stanford Group Company isn’t optimistic either about online poker becoming legalized. For poker to become exempt under current anti-Internet law, it would have to be defined as a game of skill rather than luck.

“We believe the odds are against this for many of the same reasons that Congress will not overturn the broader prohibition,” the report stated. “It leaves Democrats accused of interfering with criminal investigations and it would force them to figure out a way to overcome the ability of Senator (Jon) Kyl to stymie legislation in the Senate.”

The chances of Congress carving out an exemption for poker like they did horse racing are only about 20 percent, according to the Stanford Group Company.

What has the best possibility of happening is the government agreeing to a study of how online gaming can be taxed and regulated. There’s a 60 percent chance of this occurring, says the Stanford Group Company.

“This is the option that has the greatest chance of passing,” the Stanford Group Company report said. “It provides a means for Frank and others who opposed the prohibition to declare victory without actually overturning the prohibition.

“We doubt that Kyl and others would expend substantial political capital to block an 18-month to 24-month study of whether it is possible to regulate and tax Internet gambling.”