Part 2: AGA Prez Talks About Online Gambling Ban

This is part two of a three-part series on how the Unlawful Internet Gambling Enforcement Act was born. Allyn Jaffrey Shulman, Card Player Magazine's legal counsel, spoke with American Gaming Association President Frank Fahrenkopf, about it. Click here for part one.

What Happens While Playing Golf?

(Mike Oxley was the new Chairman of the House Committee on Financial Services at this time).

Fahrenkopf continued: "Oxley is a former FBI agent and a longtime friend. One day while we were playing golf, Oxley said that he realized that if the Kyl bill had passed, nothing would change because the online gaming sites are offshore. Oxley said he started thinking about the credit card issue. Oxley was the guy who introduced it into the house five years ago. Mastercard and Visa fought it, but got cut to pieces. Discover and American Express didn't fight it. At the same time, eBay bought PayPal. Eliot Spitzer went after eBay and got them to agree not to accept gaming transactions. PayPal agreed to pay big fees for having processed online gaming funds. As a result, in the last five years, almost no one uses credit cards for online wagering; they use companies such as NETELLER."

I commented that I recently wrote the same thing and was criticized by people in the industry who believe credit card use is still going strong. Fahrenkopf responded that the smaller banks might still process online gaming transactions, but all of the big boys have been out of business for five or six years.

Kyl Calls Fahrenkopf

"In February of last year, Kyl called me and said: 'I have crafted a bill that says people can't use credit cards for illegal Internet gaming; but I am not going to decide or define illegal Internet gaming. I am not going to decide whether the attorney general or the courts are correct in their interpretation,'" Fahrenkopf said. "I told Kyl that the AGA board would not take a position."

Goodlatte's Feelings Were Hurt

"Kyl gave the bill to Rep. Jim Leach, who introduced it in the House. The problem was that Leach hadn't spoken to Goodlatte, a member of the House who tried to shepherd the online gaming issue. Goodlatte is one of the most conservative and Leach one of the most liberal Republicans. Goodlatte was mad that Leach introduced the bill, so he quickly introduced his own bill," Fahrenkopf siad.

This explains why there were two similar bills in the House.

Tomorrow is the conclusion of the conversation Shulman had with Frank Fahrenkopf about the UIGE Act. Please stop by to read how it came to be. And click here to visit CardPlayer.com's section on legal issues and poker.

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