Law Firm: Bill to regulate Internet gambling affects tribal rights

Monday, December 13, 2010  

"The staff of Nevada Senior Senator Harry Reid, the Senate Majority leader, is reported to be circulating an Internet poker (I-poker) bill that will permit licensed casino gaming facilities and horse race tracks licensed in the United States, Class III tribal casinos, and intrastate state lotteries to operate online poker websites that restrict wagers to persons located within the United States. The bill is entitled the Prohibition of Internet Gaming, Internet Poker Regulation and UIGEA Enforcement Act.

Under the bill’s provisions, only holders of an I-poker license issued by a “Qualified Body” will be permitted to operate an online poker site. The term “Qualified Body” is defined to include any state or tribal regulatory body that has been qualified by the United States Secretary of Commerce to issue the licenses. The bill includes provisions that permit states to both opt in and to opt out of the I-poker licensing process. The bill specifically provides that a tribe operating an I-poker site based upon a license issued pursuant to the bill will not have to engage in new tribal-state compact negotiations in order to operate its I-poker site.

The bill establishes a monthly license fee equal to 20% of the licensee’s I-poker deposit receipts for the preceding month, with 6% going to the federal government and 14% going to the state or tribal government. The term “Internet poker deposit receipts” is defined as the aggregate rake, tournament fees and other fees and charges required or received from customers directly as a result of Internet poker from deposits into any account maintained by the licensee or on behalf of the licensee. The bill exempts these receipts from state taxes except in the jurisdiction where the Internet facility maintains its permanent physical residence.

The bill provides that no Qualified Body may issue an I-poker license prior to 15 months after the date on which the bill becomes law, which requires that it is passed by both the United States House of Representatives and the United States Senate and then signed by the President. This licensing delay period gives the Department of Commerce and state and tribal agencies sufficient time to gear up for the licensing process."

Get the Story:
Robert W. Stocker II: Staff of Senator Reid circulates I-poker bill (Lexology 12/8)

Related Stories:
Conflicting reports over Internet gambling measure on Capitol Hill (12/9)
California tribes push measure to authorize Internet poker in state (12/8)
Tribes facing bills for Internet gaming and off-reservation gaming (12/7)