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A Closer Look into the Internet Poker and Games of Skill Regulation, Protection and Enforcement Act

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Poker enthusiasts have another bill on which to latch their hopes in the fight to legitimize online poker in the United States. Sen. Robert Menendez (D-NJ) introduced the Internet Poker and Games of Skill Regulation, Protection and Enforcement Act to the Senate on Thursday.

"Pulling Internet poker out of the shadows and into the light of the law, we have the opportunity to help our economy while protecting our families," Menendez said. "By bringing these games of skill into the mainstream, we can generate billions in revenue for businesses and the Treasury during these tough times."

The Poker Players Alliance immediately threw its support behind the bill, which would require online poker sites to apply for licenses from the Treasury Department in order to conduct business in the U.S.

"(Thursday's) action by Senator Menendez is yet another powerful step towards protecting Internet freedom, protecting customers and protecting online poker," PPA Chairman and former Senator Alfonse D'Amato said.

Rep. Barney Frank (D-Mass) introduced a similar bill — The Internet Gambling Regulation, Consumer Protection, and Enforcement Act — to the House of Representatives in May. While Frank's bill applies to online gambling as a whole, Menendez's bill paid poker the compliment of separating it as a game of skill.

Although Frank's bill never even mentions poker specifically, either legislation would accomplish the goal of legitimizing online play and both measures have the full support of the PPA.

"It's like asking a parent which child you love more," said John Pappas, President of the PPA. "We love them both equally, and hope one becomes law some day. I think at some point these bills will converge or collide, and we'd be pleased with either bill."

The Frank bill is still the favorite to go through, with a powerful push from the chairman of the Financial Services Committee. Frank is committed to holding hearings on his bill in September or October, following the August recess, according to Pappas.

Other differences in the Menendez bill include a 10-percent tax on all incoming deposits, to be paid by the site and split between federal and state governments. Pappas believes sites would accept the tax, pointing out that U.S. Casino giant Harrah's — which almost certainly will become involved in online gaming if the bill passes — has called the charge fair. Pappas doesn't think sites would pass the tax on to the consumers. However, taxes on player winnings would be withheld.

The legislation would set the age requirement for online play at 21, rather than the 18-year-old limit used by most sites today. States could opt out of the regulations, making it illegal for sites to accept bets from individuals in those jurisdictions.

The bill also would establish safeguards to confirm age verification and ensure the games are fair.

"The safety benefits of the bill are particularly crucial," Menendez said. "Parents are worried about their children falling prey to illegitimate gaming sites and thousands of Americans have been fleeced of millions of dollars by these sites. With proper regulation, we can prevent minors from playing poker online, crackdown on predatory operations, and sanction the legitimate ones."

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