Skill Game Exemption Act For UIGEA Gains 20th Co-Sponsor

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Currently there are at least four bills in the House of Representatives that attempt to address the bad decision that congress made last year when it enacted the UIGEA.

Rep. Robert Wexler of Florida’s 19th District in June introduced bill H.R.2610 that would exempt ‘skill games’ from the UIGEA. Skill games mentioned are chess, backgammon, mahjong and poker. Yesterday, Rep. Robert E. Andrews [NJ-1] became the 20th congressman to endorse this bill.

Rep. Shelley Berkely in June also introduced a bill that would commission a study by the National Academy of Sciences to identify the proper response of the United States to the growth of Internet gambling, this bill is identified as H.R.2140. Yesterday, two additional members of congress added their names to the list of co-sponsors for this Bill, they are Rep. Robert E. Andrews [NJ-1], and Rep. Melvin L. Watt [NC-12], bringing the total co-sponsors to 68.

Rep. Jim McDermott introduced H.R. 2607, a bill to amend the Internal Revenue Code of 1986 to regulate Internet Gambling, this bill has 1 co-sponsor. It is designed to be a companion bill to H.R.2046

The bill that started all of this activity was presented by Barney Frank [MA-4], this bill is H.R.2046 and is co-sponsored by 44 congressman.

Of all these bills, H.R.2046 goes the farthest to overturn the UIGEA by allowing for regulation, enforcement, and licensing by the Federal Government, and includes safeguards to protect minors and problem gamblers.

None of these bills addresses the problems that the U.S. is facing concerning Internet gambling and the loss it suffered in the WTO.

Claims by the European Union alone could see the U.S. having to compensate them upwards of $100 million for not allowing this trade in service. The U.S., after losing it’s case and appeals in a badly fought battle against Antigua & Barbuda, decided to withdraw it’s commitment in this area, which has given all other member countries that are party to this Treaty the opportunity to file claim. The entire 27 member states of the EU, China, Japan, Costa Rica, Australia, Canada, India, and Mexico have filed claims for compensation.

The U.S. now finds itself in a lose-lose situation. The USTR violated the Rule of Law when it decided to withdraw this commitment and did not bring the issue to congress as they are mandated to do.

Congress is now in a position that they never should have been put in. Procedures in the U.S. dictate that when they are found to be in violation of trade agreements, those violations are to be brought to congress so that congress can find ways to come into compliance and avoid situations such as this.

Recent activity by the House Judiciary Committee has led to speculation that now, with arbitrary enforcement of vague laws by the Justice Department in this area, and the exclusion of input from congress, that some firm movement will be undertaken and a resolution is near at hand.

Although many consider gambling of any type to be immoral, the UIGEA does not make any form of gambling illegal. The only purpose it serves is to prevent Americans from transferring money to a foreign company for the purpose of gambling, while allowing them to do so domestically. This is the primary reason that the WTO found in favor of Antigua & Barbuda, citing that measures taken are protectionist.

December 6, 2007

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