At midnight, on the last day of the current session of congress, the senate passed the Safe Port Act. Attached to this act unexpectedly was the Unlawful Internet Gambling Enforcement Act. Republican leadership, mainly majority leader, Senator Frist was responsible for this late addition. This addition was never debated in any Committees.
What this act mainly does is make it illegal for any financial institution to transfer funds to internet gambling sites. Many large online poker rooms including Party Poker, Poker Stars, and Pacific Poker have stated that they will comply with the law and shut down its site to the United States.
What remains unclear is why Senator Frist added this provision into an almost completely unreleated act. He states:
"Gambling is a serious addiction that undermines the family, dashes dreams, and frays the fabric of society. Congress has grappled with this issue for 10 years, and during that time we've watched this shadow industry explode. For me as majority leader, the bottom line is simple: Internet gambling is illegal. Although we can't monitor every online gambler or regulate offshore gambling, we can police the financial institutions that disregard our laws." - Senator Bill Frist
But I think his actions speak louder then words. According to Opensecrets.org, Frist has taken more then one donation from Gambling organizations. Before his recent run in 2000, he took $19,250 from Harrah's entertainment and $20,000 from Mandalay Resort Group, a casino now owned by MGM Mirage. Harrah's and MGM are two of the largest gambling businesses in the world.
Hypocritical? Obviously. But this may be corruption at its highest form. Currently, the major casino's do not do much business in the online gambling world and especially not in online poker. However, this law could change that.
But U.S. casinos hoping for a slice of the $12 billion online market aren't so sure the party is over. They see a reason to celebrate in the language that ended up on the Senate's cutting-room floor. Unlike the version that passed the House earlier this year, the approved legislation does not explicitly outlaw betting on online casino-style games, such as poker and blackjack. The bill does bar financial institutions from accepting "illegal" bets, leaving the question unanswered as to whether some forms of online gambling are permitted. To date, sports betting is one of the only forms of gambling explicitly outlawed in the act. - MSNBC http://www.msnbc.msn.com/...
Need some more evidence? Harrah's and MGM's stocks both opened up at much larger price on Monday then they closed at on Friday.
Harrah's closed friday at 66 and opened up on monday at 75, reaching a high of 79. MGM was up 2 dollars from friday and is currently up 1 dollar per share.
Online Poker has become a huge industry that the large casino's haven't been able to tap into. So the question begs, what were Frist's motivations here? Was it soley because of his moral problems with gambling or a nice little kick back to the Casino's that helped fund his campaigns.