Strange Bedfellows: Jon Kyl and Harry Reid New Internet Gambling Bill

Written by:
C Costigan
Published on:
Nov/17/2011
Jon Kyl and Harry Reid New Internet Gambling Bill

The New York Post is reporting that Republican Jon Kyl and Democrat Senate Majority Leader Harry Reid are working on a new Internet gambling bill.  The significance of this cannot be overstated.

Kyl, who over the past year has changed his stance on regulating online gambling, was the co-author of legislation that has essentially made the activity illegal in the US for the past five years.  That watered down bill allowed for a number of loopholes, big enough to drive a truck through (i.e. not all banking instruments were excluded, horse racing and state lotteries were exempt, the gamblers themselves could not be prosecuted, etc..). 

Senator Kyl of Arizona is also part of the highly touted Super Committee in charge of slashing a few trillion dollars from the nation’s deficit.  Legalized online poker could find its way onto a related jobs bill, many experts believe.

Most pundits believe it helps to have Kyl on the industry’s side even if he and Reid have thumped their chests regarding the elimination of current online operatives who target the US market.  

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From the New York Post: 

“A bill will be proposed by the end of the session,” a second source close to the situation said. “There is a 50 percent chance it will be approved by next year.”

Sen. Jon Kyl (R-Ariz.), who was once a gambling opponent, may co-sponsor the bill, several sources said. A Kyl spokesman did not return calls. There is a similar bill in the House of Representatives.

Time is of the essence. Sources believe Congress will not pass such a controversial bill during the 2012 presidential election year, and the following year may not be opportune as poker advocate Harry Reid (D-Nev.) may no longer be Senate Majority Leader.

Morgan Stanley has estimated legal online gambling would generate $14 billion annually.

If taxed at 25 percent, Uncle Sam and the states would share $3.5 billion in revenue. States would have the option of whether to opt in.

Sources close to Gambling911.com suggested that there has been a lot of pressure applied to Kyl to correct the damage caused by his 2006 online gambling prohibition bill, the Unlawful Internet Gaming Enforcement Act (UIGEA), which has made it impossible for big businesses to enter the US Web gambling sector while offshore operators targeting customers in the States continue to thrive.

“He is trying to make amends before leaving office,” a source tells us.

- Chris Costigan, Gambling911.com Publisher

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