Jon Kyl Celebrates Wall Street, London Stock Exchange Losses
In a letter that many politicians, shareholders and online gambling analysts alike are scratching their heads at, Arizona Senator Jon Kyl (R) expresses jubilation at the loss of some $7 billion by Wall Street and the London Stock Exchange.
Kyl refers to the law he helped author, the Unlawful Internet Gambling Enforcement Act, which holds the banking sector directly responsible for monitoring online gambling transactions.
The immediate impact of this legislation on offshore operators was overwhelming: Online gambling businesses on the London stock exchange lost over $7 billion in market capitalization in one day after the bill was passed by Congress.
One of those companies that lost a nice chunk of that $7 billion - PartyGaming. That company was the largest IPO on the London stock exchange in 2005. Jon Kyl's antics were sure to infuriate British shareholders, banks and politicians even further.
London newspapers reported last month that the US Justice Department had subpoenaed a handful of British and other European banking institutions for any customer records related to the online gambling industry. This was in conjunction with a government investigation into online gambling solution NETeller. Two of its co-founders were arrested and charged with racketeering and money laundering in the United States, however, the government has asked for a third extension (April 16) to determine if charges should be dropped.
United Kingdom Culture Secretary Tessa Jowell has criticized the US government for its stance on internet gambling.
"America should have learnt the lessons of prohibition" said Ms Jowell.
Jowell warned that there was a "real danger" the U.S. would create "the modern day equivalent of speakeasies" which could provoke an increase in fraud and exploitation reminiscent of the 1920s ban on alcohol sales.
Senator Kyl's comments are likely to inflame Britons from all walks of life, irregardless of whether they bet on the Web or not. But closer to home, Wall Street was feeling the sting of Kyl's comments as well.
A handful of major Wall Street investment firms owned shares in online gambling companies, most notably BetonSports, which has suffered immensely as a result of US prosecution.
Should We Allow Arizona to Remain a State in the US?
ProfessionalGambler.com is asking the question many were following a major shift in the United States political landscape this past November. While even some of the best Republicans lost in the elections seemingly as a result of their political affiliation and a backlash fueled by the Iraq war, the one Republican politician many feel represents "the most hardened stance" of that party, managed to retain a third term as Arizona State Senator. He'll be serving Arizona for another six years.
J.R. Miller of ProfessionalGambler.com argues the extreme case against Arizona politics:
"There is a good argument that any group of people dumb enough to elect Jon Kyl to the United States Senate may be too dumb to be citizens of the United States. What the hell must the people of Arizona have been thinking?"
In fairness to the good people of Arizona, they were not left with much of a choice. Kyl's opponent, Jon Pederson, was widely viewed as "inexperienced", which had even democrats in Arizona voting for Jon Kyl.
Said one Arizona voter of Pederson:
"I can't stand a candidate that can't try to win an election by promoting themselves. If the only thing you have going for you is how you're trying to pull someone else down, I'm not voting for you. I'm so sick of the smear campaigns. Tell me what YOU are going to do for me--not the crap someone else is doing."
While some may view Jon Kyl as a "protector of family values" with his "firm" stance regarding online gambling, it should be noted that Kyl ensured exceptions for the powerful horse racing lobbyists (yes, you can still legally bet the ponies online), state lotteries (yes, Arizona has one) and - most telling of all - fantasy sports leagues. Why an exception for fantasy sports leagues had been added is anybody's guess. Then again.....
The New York Sun criticized Kyl for including an exception for fantasy sports, explaining some rationale for why this was done.
"Happily for baseball, Mr. Kyl's ban on online gambling includes a carve-out for fantasy sports," the article explains. "Five card stud might be crack, but apparently the crystal meth that is fantasy baseball is fine with the good senator, who obligingly cleared out a whole gang of rival dealers so that MLB and the other major team sports could sling their product on the corner.
"Head over to MLB.com and you'll be pointed to clean destinations where you can wager on baseball through fantasy sports leagues - a good, legal way to spend some of that cash you otherwise would have burned in your virtual crackpipe."
The author then claims that according to records accessed through the Center for Responsive Politics, Kyl raked in $41 398 from MLB executives and the game's political action committee last year.
Kyl Causing More Problems in the Senate
It's not just online gambling where Jon Kyl has inserted his political empowerment.
Two weeks ago, the administration abruptly dropped its opposition to a bill that would require Senate confirmation for U.S. attorney replacements. But Sen. Jon Kyl (R-AZ) "still intends to object," Roll Call reports (sub. req.).
Just how disruptive that objection will be is up to Kyl. Senate Majority Leader Harry Reid (D-NV) intends to bring the legislation up for a vote "as quickly as possible," his spokesman tells Roll Call. By the rules of the Senate, which give individual senators considerable power to stymie legislation, Kyl could gum up the works with his objection, or he could simply sound his disapproval and let the bill come up for a vote.
Kyl has already blocked the bill, authored by Sen. Dianne Feinstein (D-CA), once. Republicans blocked it a second time when Feinstein tried to attach it as an amendment to another bill.
The bill, co-sponsored by Sen. Arlen Specter (R-PA), would reverse a change slipped into the colossal PATRIOT Act reauthorization bill in December of 2005, by Specter's chief counsel, Michael O'Neill. Feinstein's bill simply restores the law to the way it was before that change.
Before the change, the attorney general was allowed to appoint replacements for fired or retiring U.S. attorneys, but if the president hadn't nominated someone for Senate confirmation after 120 days, the local federal judge appointed a replacement. The law change removed that 120 day requirement, effectively allowing the administration to install appointments indefinitely without Senate confirmation.
Kyl (and until recently, the administration) has cited separation of power concerns as his objection to Feinstein's bill.
Once seen as the "Quiet Conservative", Jon Kyl is starting to become fodder for his critics as seen above where bloggers paint a picture of how the Senator would have appeared during another time in politics.
A critique in LoftyDonkey.com attempts to explain potential ramifications of Kyl's quest.
Republican Sen. Jon Kyl of Arizona has seen the enemy. And he thinks it’s us.
By us we mean the press, the people empowered by the First Amendment to keep an eye on the government. And by us we mean our confidential sources, the people who love their country enough to reveal information categorized as classified when our leaders go astray. And by us we mean you, the people entitled to know what our government is doing to safeguard our freedoms as it seeks to eradicate terrorism.
Allow us to outline Kyl’s attempt to erode your right to know. First he proposed an amendment making it a crime to publish classified information “concerning efforts by the United States to identify, investigate or prevent terrorist activity.” The wording was broad, the ramifications severe. The proposed law could have been applied to everything from public safety and health threats to emergency response planning and national security breakdowns. Had it been in effect, you may not now know about the Bush administration’s eavesdropping on overseas telephone calls, its monitoring of international banking transactions, its secret CIA prisons abroad – all constitutionally questionable acts being committed in our names.
But Kyl failed. He withdrew the amendment under heavy fire from First Amendment advocates. Now, though, he’s attacking from the rear.
His new proposal targets news sources instead of journalists. Government employees who leak classified information related to the war on terror would risk 10 years in jail. Different victims, same impact: A government with the power to classify any document could, with such a law, operate with relative impunity.
No Longer The Quiet Conservative
There as a time when Senator Jon Kyl received praise from both Republicans and Democrats alike.
Matthew Scully of the National Review once wrote:
Halfway into his first Senate term, Kyl ought by all rights to be viewed as an "obstructionist," one of those narrow conservative ideologues always in the way of responsible governance. It is not surprising that a former aide, Dan Coakley, describes him as "a fighter -- a man of principle and absolute integrity." Just about every Republican close to Kyl says this.
Curiously, however, Democrats say basically the same thing. In the chemical-weapons debate, Joseph Biden (D., Del.), who favored the bill, could hardly praise Kyl effusively enough. Somehow Kyl seems to have built up an exemplary conservative record without making enemies or even getting much attention outside Arizona.
Scully explained
"With his issues," one conservative activist at the time said, "he could have a national name by now. Except on technology, he's perfect. He just needs to work on exposure. He could be President someday."
Now Kyl is making waves in the Senate. His letter to President Bush came only one day after chairman of the House Financial Services Committee, Barney Frank, announced he will be submitting legislation to repeal the passage of the Unlawful Internet Gambling Enforcement Act.
Kyl's letter goes on to point out that use of direct bank debits would "rely almost exclusively on government-provided lists".
This comment comes only two weeks after the hoopla over abuses with the Patriot Act and privacy concerns.
We renew our request that you (President Bush) ensure the law enforcement and regulatory personnel commit the resources needed to identify illegal online gambling businesses and give the new law the teeth that Congress intended it to have.
Sorry Mr. Kyl. Most of those "resources" are currently being deployed in Iraq and the war on terrorism.
For the record, Barney Frank has called the "new law" one of the “stupidest laws”.
President Bush, when he signed the all important Port Security bill into law made no mention of the unrelated internet gambling provision that had been attached.
----
Christopher Costigan, Gambling911.com
Originally published March 20, 2007 10:09 am ET
