Shares in online gaming companies jumped in recent days after a spokesperson for the powerful Democratic lawmaker Barney Frank, Democratic Chairman of the House Financial Services Committee, said that Barney Frank is currently working on legislation to repeal the Unlawful Internet Gambling Enforcement Act. This gave the industry a glimmer of hope that the sweeping ban Congress passed last year might be repealed. Although Mr. Frank has not yet confirmed his intentions.
The Financial Times website reports that Barney Frank said that the ban, formally known as the ‘Unlawful Enforcement Gambling Act’, was one of the "stupidest laws" passed.
He continued "I am working on legislation to cut back on this internet gambling thing . . . I think it's preposterous. I'm looking for ways, maybe we can make some money off of it," he said, signalling that he could be considering a proposal to make online gaming legal by regulating, and taxing the industry. A spokesman for Mr. Frank reportedly said he had not yet drafted any legislation and was still at a ‘thinking stage’.
Although the Massachusetts Democrat represents a potentially powerful ally to pro-gaming interests, people who watch the issue in Washington expressed scepticism about the prospects for repeal.
Under the rules of the upper chamber, a single lawmaker can, in most circumstances block legislation from getting a vote. A spokesperson for Jon Kyl, a Republican senator who supports the ban, said he would oppose any effort to repeal the legislation.
Mr. Frank also said "I am not ready to get into specifics yet. People have come to me with some ideas. Not Al D’Amato and I'm looking at it." Thus referring to the former New York senator recently named chairman of the Poker Players' Alliance, a lobby group that is fighting to legalise online poker.
Mr. Frank's remarks prompted Party Gaming’s shares to rise 12.5 per cent in London, while 888 Holdings was up 3.9 per cent on revived hopes of a takeover by Ladbrokes, the British bookmaker. Sportingbet, also the subject of a bid, was up 5.4 per cent.
Meanwhile rumours abound amongst various Internet gaming sources that the US Government will drop its case against NETeller co-founders Stephen Lawrence and John LeFebvre when the case comes to court on Friday 16th March. If the case is thrown out, it would likely create an atmosphere where some processing companies may decide to re-enter the US marketplace. All eyes will be watching for the result of this hearing.