Internet poker arguments heat up Capitol

DALE WETZEL
Associated Press

BISMARCK, N.D. - North Dakota should license Internet poker sites instead of turning a blind eye to the business, and both the state's treasury and the Bank of North Dakota would benefit, industry officials contend. Opponents say the proposal would encourage gambling instead of work.

"Once we condone (Internet poker) as a state, it will get worse, and the passage of this bill is, in fact, condoning it," said Mike Seminary of Bismarck. "I don't know that that's a door that we want to open."

Dick Elefson, a Bismarck gambling counselor, called the legislation "the most egregious, asinine bill I have ever seen presented to the North Dakota Legislature." Said Lynn Bergman of Bismarck: "I don't want North Dakota to be the next Las Vegas."

They spoke Tuesday during a Senate Judiciary Committee hearing on legislation that would authorize North Dakota to license, regulate and tax Internet poker sites. It would become the first U.S. state to do so.

The panel's chairman, Sen. Jack Traynor, R-Devils Lake, said the committee may make a recommendation on the legislation this week. Its primary sponsor, Rep. Jim Kasper, R-Fargo, and Attorney General Wayne Stenehjem have requested amendments, Traynor said.

Under the legislation, the attorney general would have the responsibility of regulating Internet poker sites. North Dakota voters would also have to approve a state constitutional amendment for the bill to take effect. The House voted Tuesday to put the amendment on the ballot, but a Senate hearing and vote is still pending.

Michael Corfman, president of Casino City Press of Newton, Mass., a company that tracks the Internet gambling industry, said the number of poker sites has risen from 43 in June 2003 to 266 at the end of last month.

If a state agrees to license Internet poker sites, American players, who make up a majority of the market, will naturally gravitate to sites regulated in the United States, Corfman said.

"That's just common sense. If you were gaming, or going to play poker, where would you rather play?" Corfman said. "I think you'd all rather play in a regulated environment, and you'd rather play in the United States than some overseas jurisdiction."

Nigel Payne, chief executive officer of Sportingbet PLC, an Internet gambling company, said his company's poker operations would relocate to North Dakota if the state agreed to license Internet poker sites.

At current business levels, the tax rates included in the licensing bill would raise more than $10 million annually from Sportingbet alone, Payne said. If the Bank of North Dakota handled bettors' transactions, its income from transaction fees would increase the state's earnings even more, he said.

Sportingbet recently acquired Paradise Poker, a leading Web site that has more than 700,000 registered customers. The site is now hosted in Costa Rica, with its gaming servers located on the Mohawk Kahnawake reservation near Montreal.

"This is a very, very substantial industry indeed, that frankly deserves, and needs, and is crying out to be regulated," Payne said.

Regulation would protect players and help drive out unscrupulous operators, Payne and other poker industry representatives argued Tuesday, and some Judiciary Committee members took up those points with the bill's opponents.

After Elefson spoke of a 19-year-old man who had lost $60,000 gambling on the Internet, Sen. Connie Triplett, D-Grand Forks, asked him if he was "actually making the case for the proponents of the bill, when you talk about the gambling that is already going on, that is unregulated."

"Maybe we should regulate it. Maybe we should accept their tax dollars, and then we could use those tax dollars to help people who are trying to solve (gambling) problems for individual people," Triplett continued.

Elefson replied that he believed the measure would make it easier for young people to gamble. "To assume that we can regulate it to the point to eliminate illicit gambling by underage kids is pie in the sky," he said.

After Robert Lynne of Bismarck, a former western North Dakota bishop of the Evangelical Lutheran Church in America, described the "family problems, broken lives (and) financial crises" caused by gambling, Sen. Tom Trenbeath, R-Cavalier, quizzed him.

He believed as Lynne did, Trenbeath said. "But how is regulating an uncontrolled, bad thing, a bad thing?" he asked.

"It's not to have an uncontrolled thing to begin with," Lynne replied.

"I couldn't agree with you more. That just begs the question," Trenbeath said.

Lynne continued: "We've got to start looking more positively at taking care of those around us, rather than encouraging them to go on, trying to get something for nothing."

"We're looking ... as we sit here today, at an ongoing industry that is unregulated anywhere in the United States. That can't be a good thing," Trenbeath said. Replied Lynne: "No, and I wouldn't be a part of it. So don't do it."

The U.S. Justice Department believes Internet gambling is illegal, but three attorneys who testified at Tuesday's hearing said federal courts have refused to apply the Wire Act, a federal anti-gambling law, to Internet gambling that did not involve sports betting.

Former Gov. Arthur Link, a longtime gambling opponent, said he did not want the Bank of North Dakota's reputation sullied by acting as a clearinghouse for gambling money. The governor, as a member of the state Industrial Commission, is one of the bank's three directors.

"I think this is one of the most important recognitions that I can remember, when these fine people have come and said, 'You have something that nobody else has,'" Link said, turning toward the poker industry officials. "We accept the compliment, but in addition to that, it increases my resolve to keep it as pure and as good as it is."

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The bill is HB1509.