The future of online poker is like a Texas hold 'em hand where the flop wasn't great but the cards yet to come could turn the hand into a winner.

The "flop" in this scenario is the Unlawful Internet Gambling Enforcement Act. Pushed by then-Sen. Bill Frist, R-Tenn., it was hustled through Congress at the last minute of the 2006 fall session, piggybacked onto unrelated, must-pass port security legislation.

The act was aimed at banks and other financial entities, establishing stiff penalties for processing Internet gambling money transactions. Nearly two years later, amid complaints that the law is vague and unenforceable, the banking industry still awaits a federal definition of what forms of gambling are included.

Regulators at the Federal Reserve and the Treasury Department haven't figured out what types of gambling transactions should be monitored by financial institutions for enforcement. It's worth noting that Indian gaming, state lotteries and horse-race betting are excluded from the law.

"If the federal agencies themselves cannot agree on the law, what hope is there that banks can resolve these confounding legal issues," the American Bankers Association lamented earlier this year in sizing up the confusion.

Former U.S. Sen. Alfonse D'Amato, chairman of the million-member Poker Players Alliance, is among those fighting to overturn the UIGEA.

"The UIGEA is a completely unworkable and unenforceable bill that would do little to address the main concerns of its sponsors — namely, protecting underage and compulsive gamblers as well as cracking down on money laundering," he said in late June.

"Congress should implement thoughtful and effective regulation of the online gambling industry as opposed to outright prohibitions, which history has shown do not work," D'Amato said.

Jay Lakin, vice president of PokerSourceOnline.com, one of the largest online poker affiliates in the world, noted that regulation of online poker — those "cards yet to come" — has been the focus of several bills introduced in the wake of the UIGEA. Their progress through Congress has been spotty, however.

"Overturning a law is a very slow process, but with many other countries around the world beginning to embrace online gambling by licensing it and regulating it, it's just a matter of time before it happens in the United States," Lakin said.

The best hope for settling the online poker situation appears to be the Internet Gambling Regulation and Enforcement Act (HR 2046), introduced by Rep. Barney Frank, D-Mass., on April 26, 2007. Now with at least 48 cosponsors, it would establish a comprehensive licensing and regulatory framework for Internet gambling in the United States.

Another key bill, the Skill Game Protection Act (HR 2610), introduced 14 months ago by Rep. Robert Wexler, D-Fla., has collected 22 cosponsors. It would exempt poker, bridge, chess, mahjong and other games of skill pitting player against player from all existing Internet gambling law, including the UIGEA and the Wire Act of 1961.

"Both bills continue to languish in committees," Lakin said, "and nothing will happen to either before 2009 since this year's Congress is just about done. Because online gambling is pretty low on the list of things to deal with right now, it's also doubtful the November election will have any effect."

Lakin dismissed any downside to the taxes that players would have to pay on their winnings under a regulated online poker industry.

"People's winnings already are taxed in Vegas, at horse tracks, etc., and it hasn't kept them from going. People will understand that it's part of the cost of doing business," he said. "Moreover, the entire process will be regulated, which should help ease customers' qualms about the fairness of playing online."

Meanwhile, the upside is significant, he said. In addition to generating an estimated $4 billion annually in tax revenue to boost depleted federal coffers, "licensing and regulating online gambling will make it safer and more transparent, plus cut down on underage gambling, fraud and money laundering, which everyone should support," Lakin said.

So, what will it take to make a winning hand for online poker? Strong legislative efforts, to be sure, but Lakin added:

"Poker players can do their part by educating others about the UIGEA, registering to vote and supporting those politicians who believe in our right to gamble online in the privacy of our homes."

E-mail your poker questions and comments to russ@luckydogpoker.com for use in future columns. To find out more about Russ Scott and read previous LuckyDog Poker columns, visit www.creators.com or www.luckydogpoker.com.

COPYRIGHT 2008 RUSS SCOTT

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