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Pressure mounts for online poker in Iowa


This news story was published on January 30, 2012.
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Rod Boshart, The Gazette, Cedar Rapids, Iowa –

DES MOINES — Proponents seeking to rein in the unregulated “wild, wild West” environment of illegal online poker in Iowa are girding for another legislative battle this year, while critics worry about a new gaming expansion that could spread addictive forms of electronic gambling from casinos to living rooms.

Iowans on both sides of the gambling issue say last year’s federal crackdown on major illegal offshore poker operations and a separate Justice Department opinion that narrowed prohibitions for forms of Internet gambling to primarily sports betting have increased the pressure on Iowa lawmakers to set regulatory perimeters for state-licensed casinos to offer legalized poker to adult players via smartphones, laptops or other Internet-linked purveyors.

“It was a real surprise when (the U.S. Department of Justice) reversed what’s been a long-standing precedent on that, which I think potentially throws the door for Iowa not only to be one of the early states into the arena but even to go beyond their borders,” said Tom Coates, an official with Consumer Credit of Des Moines who has been a leading gambling opponent in Iowa. “I was not worried before, but I am more worried now that it might go and that it will be a viable model and you will damage an increasing number of players and young players.”

State regulators who studied the issue last fall were able to verify that illegal online poker is going on in Iowa, but they could not corroborate gambling industry estimates of 150,000 players. The Iowa Racing and Gaming Commission study also projected that legal online poker operations could generate between $13 million and $60 million in yearly activity which could produce an estimated $3 million to $13 million in tax revenue annually.

For now, that money and the jobs and economic opportunities that go with it are leaving Iowa, say lawmakers like Sen. Jeff Danielson, D-Waterloo. He plans to offer legislation as early as next month that would authorize the commission to establish a framework for hub operators and state-licensed casinos to provide online poker to Iowans via an intrastate network or join multistate partnerships to attract more players and bigger wagering pots.

“Over the last year or so we’ve had a tremendous change in the dynamics around online poker and I believe it’s the responsibility for us to have a thoughtful, responsible gaming policy when it comes to online poker,” Danielson said.

“I don’t believe do nothing is the appropriate answer,” he added. “To do nothing means it is the wild, wild West and no ability to account for the costs if you’re not thoughtfully engaged in what policy you have.”

However, critics say Internet poker will be the gateway to other forms of online gambling in a state that has shown a lack of restraint since pari-mutuel wagering, the state lottery and riverboat gambling were legalized.

“Everybody can see the handwriting on the wall, we’re moving toward legalization of online gambling,” said Rep. Jeff Kaufmann, R-Wilton, a gambling opponent who attended a House State Government Committee meeting last week during which state gaming officials conceded that the advent of online poker might mean more people will gamble or those who currently play will play more.

Coates said the argument to legalize something because it goes on unregulated anyway is “the rationalization and the mantra of the scoundrel,” while Kaufmann argued that adding another form of legalized gambling will mean an increase in the social and financial problems associated with gambling.

“I don’t buy the arguments that it’s happening anyway, so let’s legalize it,” Kaufmann said. “I’ve heard that same argument on the legalization of marijuana; I’ve heard that same argument on a whole host of vices. If the premise for legalizing online gambling is that it’s happening anyway, there is a huge slippery slope on what we’re going to legalize in this state and I know we would go places where the vast bulk of Iowans do not want to go.”

Wes Ehrecke of the Iowa Gaming Association, an umbrella group that represents 18 state-regulated casinos, said the American Gaming Association and members of his group prefer passage of a federal law to address online gaming from a national perspective. Absent that, however, the Iowa industry generally favors a plan to allow Internet poker “on the casinos’ platform,” regulated by the state Racing and Gaming Commission and with reciprocity to enter into partnerships with Nevada, the District of Columbia and other states that legalize the games.

“We want to tread slowly and evolve cautiously along the way to make sure that this makes sense,” he said.

Rep. Peter Cownie, R-West Des Moines, chairman of the House State Government Committee, said he was unsure how an online poker bill might fare in the House if it manages to garner the necessary 26 votes for Senate passage this session.

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