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Federal internet gaming legislation poses many risks for Georgia

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Though the bulk of Congress’s lame duck discussion will center around talk of fiscal cliffs and sequestration, a bill that would grant federal permission and regulation of internet poker is making a splash far greater than what would factor into the realms of possibility for a nation $16 trillion in debt.

The legislation would grant federal licensing for online gaming exclusively to internet poker, with all the rights and “privileges” of regulating the industry therein.

What it really can be called is an attempt by Senate Majority Leader Harry Reid to circumvent competition between states to enforce a gambling monopoly for Nevada.

Should it be implemented, prior-regulated land-based casinos, racetracks and machine manufacturers would be the only vendors eligible for an internet poker permit from the federal government for two years. Naturally, this gives Nevada a headstart on everyone else when it comes to navigating the new regulation.

With the ability to enforce regulations on their own terms gone in favor of federal intrusion, and while Nevada already holds an advantage, other states would be left behind.

Those are just the surface level flaws. Adding to the concern is the loss of revenue that would befall states under the federal tax structure that would be imposed. While the language states that 14% of the federal taxes collected would remain with the states, 30% of that would head to the state where the online poker licenser is located.

And where would that be? Nevada, more than likely.

In other words, Reid’s using Senate clout to push his personal agenda through; a worthy payback to the gambling-based donors who have kept his coffers full for years.

He’s been hard at work with the political chest-pounding, attacking Dean Heller, Nevada’s junior Senator, for failing to whip fifteen Republican votes to secure a veto-proof majority in the upper chamber. For his part, Reid’s promised forty-five. He openly refers to the bill as potentially “the most important issue facing Nevada since Yucca Mountain” and proclaiming its passage as “jobs for Nevada.”

For Georgians, the risk stems beyond whether or not Nevada is given a stranglehold on online gaming.

Funding for the HOPE Scholarship is dependent on lottery revenues. Following budget shortfalls, declining take-in by the Georgia lottery and an ever-increasing number of students, 2011 marked painful changes finally being made to the cherished program.

Siphoning off lottery revenues for the sake of more federal oversight is hardly in the best interest of Georgia’s citizens. This year has marked what would appear a turnaround for the Georgia Lottery’s fortunes, as the last fiscal year marked a record $3.8 billion in sales. In July, the Georgia Lottery Board let the bridge down on online lottery sales.

Yet Reid’s concoction would essentially serve as a death knell for lottery expansion into the online realm, depriving Georgia students of the HOPE funds that would come with such a move. Sympathizers point to an opt-out provision included in the bill, but regardless of that, states wouldn’t be able to offer intrastate gambling as they prefer. Basically, Harry Reid’s game would take states out of the game.

Earlier this year, Georgia Lottery President and CEO Margaret DeFrancisco sounded off the federal government making a play, calling the idea of federal intrusion on gaming regulation near “insulting.”

Already both the National Governor’s Association and National Conference of State Legislators have denounced the measure, and five governors (three Democrats, two Republicans) have directly petitioned Washington. It’s not an issue of partisanship, but of common-sense.

Capitol Hill sources tell Tipsheet that both Congressman Lynn Westmoreland and Senator Johnny Isakson are among those on the fence when it comes to supporting the measure. Their votes against such intrusive measures, which serve Harry Reid’s political interests rather than Georgians, are vital in defeating the bill.

Ultimately, it’s no more than a fifty-state bill for a one-state problem, and it’s ripe with potential issues for Georgia.

-Dome Confidential

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