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Analysis: Sports leagues the key to UIGEA puzzle17 September 2008
By Vin Narayanan
The fact that H.R. 6870 passed is definitely good news. But how it passed, and what it means for the future of the industry is more intriguing. Let's start with how it passed.
One of the most interesting revelations that emerged over the past couple of years is how the Unlawful Internet Gambling Enforcement Act (UIGEA) bus has been driven by the major sports leagues in the U.S. Yes, the conservative wing of the Republican Party has been trying for years to get online gambling banned. But its efforts never gained any significant traction until the professional sports leagues in America threw their weight behind the effort.
Prior to July, the significance of the influence of the professional sports leagues was known, but rarely discussed. That changed when the pro leagues leaned hard on House Financial Services Committee members in late June to vote down an earlier version of the bill that passed yesterday. After that vote, legislators and lobbyists alike openly blamed sports leagues, including the NFL.
In fact, the version of Frank's bill clearly reveals the intervention of the sports leagues. Frank's testimony indicates that he worked with the league in crafting this bill that would allow the Treasury and Fed to begin drafting and implementing regulations that would immediately block sports betting transactions while delaying the implementation of all other UIGEA regulations until a determination of what was illegal was made. Frank told the committee that he did this to get a bill that would pass, but he's not happy that the sports leagues are basically telling the American people how to spend their leisure time and money.
Rep. William Clay also voiced his frustration with the pro leagues as well, who opposed the bill despite getting the language they wanted. "If that (blocking internet transactions) doesn't satisfy major league sports, nothing else will," Clay said.
The other interesting development Tuesday was the actual vote. Frank's first bill failed to leave committee on a 32-32 vote. Tuesday's vote was 30-19. That indicates that 13 votes against disappeared, as did two votes for. So what happened?
Here are the changes in the two votes:
(Rep., First vote, Second vote)
The first thing worth noting here is that Frank's bill did indeed pick up support in the last two months. One Democrat and five Republicans changed their votes from "No" to "Yes."
The second thing to look at is the number of people who did not vote on the bill. In June, six committee members did not vote. Yesterday, 21 members did not vote. Part of that was a result of Hurricane Ike. Many of the members who represent districts affected by the storm were dealing with other issues. And there were some scheduling conflicts as well. Clay, for example, was part of the voice vote that passed the bill Tuesday morning. But he was unable to make the recorded vote that Rep. Spencer Bachus asked for.
And more than likely, there was also a set of voters that thought the bill was good policy, but not good politics. Those members were able to show their support by simply not being there.
All of these are considerations that a committee chairman takes into account when scheduling a vote. And given the brevity of the debate yesterday, and Bachus' own admission during the hearing that he was going to lose the vote, the outcome of Tuesday's vote was never in doubt.
Where this bill goes from here is uncertain. The bill is now in the hands of the Rules Committee. That committee will determine when the bill will be submitted to the full House for debate and how long the debate will last. Generally speaking, the Rules Committee won't report a bill out unless they want to -- and the votes are there for passage.
Since the House is scheduled to adjourn on Sept. 26 to allow members campaigning time for reelection, and because there are generally very few legislative days after an election, there is a good chance that this bill will not be voted on this year. If the bill is not acted upon by the end of this year, it will die and have to be reintroduced in the next session of Congress.