Internet gambling is a target of Patrick bill
By Matt Viser
Globe Staff / November 10, 2007
Even as Governor Deval Patrick seeks to license three resort casinos in Massachusetts, he hopes to clamp down on the explosion in Internet gambling by making it illegal for state residents to place a bet on line. He has proposed jail terms of up to two years and $25,000 fines for violators.
The provision, buried deep in Patrick's bill to allow three casinos to the state, puts the governor at odds with a fellow Democrat: US Representative Barney Frank, the sponsor of federal legislation to license and regulate online gambling nationally. Yesterday Frank strongly criticized the governor's plan to punish online gamers while inviting casino operators to set up shop.
"Why is gambling in a casino OK and gambling on the Internet is not?" Frank said. "He's making a big mistake. He's giving opponents an argument against him."
A 46-year-old federal law prohibits betting using telephone lines, which the US Department of Justice has interpreted as prohibiting all online gambling. The government's policy has been to prosecute the operators of Internet gambling sites, but not the gamblers.
Patrick's provision takes aim at both and would levy the same penalties on either end of the transaction. Courts have been divided over the legality of placing bets on line, and state laws vary on the issue. Massachusetts currently has no prohibition, and if its ban is adopted. it would join such states as Utah, Nevada, and Washington.
Patrick officials declined yesterday to explain the governor's rationale for including the provision in the proposed legislation. They also would not respond to Frank's comments.
"Several of the provisions of the governor's proposed resort casinos bill seek to clarify the laws relating to gaming in Massachusetts, including online gaming," said Kofi Jones, spokeswoman for the governor's chief gambling adviser, Daniel O'Connell, secretary of economic development. Others suggested the provision was included to make casino licenses more lucrative by preventing competition from online operators.
"If you were cynical about it, you'd think that they're trying to set up a monopoly for the casinos," said David G. Schwartz, director of the Center for Gaming Research at the University of Nevada, Las Vegas.
Patrick's casino legislation, which has been introduced at the State House but is not expected to get a hearing until next year, would license three casinos in three regions of the state. Casino developers would bid on the licenses, and Patrick expects they would attract 10-year licensing fees of $200 million to $300 million for each casino.
Since the first Internet casino went live in 1995, online gambling has exploded nationwide. Users have flooded thousands of gambling sites, punching in credit card numbers for the rights to play cyberbingo and real-time poker from their homes. It still lags behind brick-and-mortar casinos, but online gambling has become a formidable industry, totaling $12 billion in 2005, according to Christiansen Capital Advisors, a Maine-based research firm.
Based on its reading of the 1961 Wire Act, which bans using telephone line to place bets, the US Department of Justice contends that operating online gambling sites is illegal, although most of the sites are operated offshore and do not fall under US laws. Last year, Congress approved a gambling bill that bars credit card companies from making payments to online gambling websites, making it more difficult to place bets. Frank's bill, which was filed earlier this year, would effectively overturn that law and license and regulate online gambling in the United States.
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"I believe in personal liberty," Frank said. "Adults should be able to do what they want. I wish my fellow liberals would not be so inconsistent on this issue."
Patrick's provision, which is described in three paragraphs of the bill, applies to anyone in Massachusetts who places or receives a wager of any type using a telephone, cellphone, Internet, or local wireless networks. It also applies to anyone who knowingly installs equipment for transmitting wagers. The provision also specifically exempts the proposed casinos from the law.
It does not say specifically how the state would enforce the ban, but the bill would establish an independent Gaming Control Authority and a division of Gaming Investigation and Enforcement within the attorney general's office, which would have broad powers to enforce regulations and investigate crimes.
But in trying to ban online gambling while expanding casinos, the governor's administration appears to be alienating a constituency that might otherwise support his gambling expansion.
The Poker Players Alliance, a group that says it represents the interests of online gamblers, began a letter-writing campaign last week and has generated 1,700 letters to the governor and various state legislators. The Washington-based organization has 16,000 members in Massachusetts, which is a fraction of what the alliance estimates are the 250,000 online poker players in the state.
"I feel betrayed by the very existence of this legislation," the letter read. "It's especially aggravating that this language is contained in a larger bill to expand casino gambling in the Commonwealth. This contrast is utter hypocrisy."
The organization, which recently campaigned against Governor Ernie Fletcher of Kentucky for nixing a proposed casino referendum, supports the governor's proposal for three Massachusetts casinos, but plans to oppose the overall bill.
"It makes absolutely no sense to me," said Randy Castonguay, director of the Massachusetts chapter of the Poker Players Alliance. "It's actually kind of laughable if you think about it."
Laura Everett, spokeswoman for Casino Free Massachusetts, a coalition of anticasino advocates, said that while some in the group may oppose online gambling, the organization is focused on fighting brick-and-mortar casinos. "We think the whole bill is a problem," she said. "One provision is not going to make a difference."
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Internet gambling is a target of Patrick bill
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