What's Next For Federal Online Poker Regulation?

As summer draws to a close and the November elections grow nearer and nearer, many online poker enthusiasts in the United States have turned their attention to another political matter – that of regulated online poker. This issue has been at the forefront for months, and has recently gained more attention as the two Senators from Nevada, Harry Reid and Dean Heller, have publicly drifted apart on the matter.

A little catch up: last week Reid decided to impose a deadline for the gathering of votes to support the bill in the Senate, with his Nevada counterpart Heller allegedly responsible for securing the necessary votes from fellow Republicans. Heller, however, balked at the idea of Reid’s deadline, which was this past Monday, and called for the bill instead to be proposed in the House rather than in the Senate. Reid and other Democrats believe the bill lacks enough bipartisan support to be able to successfully move through the Senate.

Details of the legislation, now being called the Reid-Kyl bill, were leaked last week. The bill paves the way for federally regulated online poker, while tightening prohibitions against other forms of online gambling, including sports betting and typical land-based casino style games, such as online blackjack and online slots, by strengthening aspets of the 1961 Wire Act, which prohibited gambling over the “wire”. The news of the Heller-Reid spat and the leaking of the bill have been huge news in the last couple of weeks, for once surpassing the buzz about the PokerStars Full Tilt deal.

Under the terms of the new law, states would have to “opt-in” to the law to be able to offer online poker rooms. Those states that do not act will automatically be opted out. Should the bill pass into law, the Federal government will oversee and tax the online poker industry, with language allowing for a 16% online poker activity fee to be paid by online poker operators mostly to the benefit of tribes and states. States will also be prohibited from allowing Internet cafés geared toward gambling, specifically designed to prevent creating a location where gambling crowds can gather.

It will be interesting to see what, if anything, happens with the Reid-Kyl bill. Online poker players have high hopes that there will be some movement on the issue before the end of this year, with Reid hoping for passage during the upcoming lame duck session. For now, online poker remains out of grasp for American players with big names such as 888 Poker, PokerStars, and Titan software simply not accessible to US-based players.