Gambling backers seeking elusive votes

DES MOINES - The odds of state lawmakers legalizing online poker remain long, but backers say they have not lost hope of dealing a winning hand yet this session.

Supporters got good news Tuesday with assurances that Senate File 458 is “funnel-proof” under Senate procedural rules, meaning it will not be subject to the Legislature's self-imposed deadline for policy bills to be approved by the House or Senate and a committee of the other chamber by Friday to remain eligible for consideration this year. The measure is awaiting action by the Senate Ways and Means Committee due to a fee provision – which qualifies it for the exemption given to budget and taxation measures.

However, the measure still faces unanswered questions, opposition and uncertainty as senators explore the possibility of becoming the first state to venture into an Internet gaming area that industry officials say already is enticing an estimated 150,000 Iowa players via illegal off-shore operations.

“My understanding is that it's real close, but that there aren't enough votes at this time until certain things get addressed,” said Sen. Bill Dotzler, D-Waterloo, who is managing the measure in the Senate Ways and Means Committee. “People's concerns are legitimate and we need time to address them. Right now I would say the odds are probably not for this year.”

Sen. Jeff Danielson, D-Waterloo, said it's too early to say the bill can't muster the 26 Senate votes needed to move it to the House because he believes there are senators who realize the issues can't be ignored and remain open to the legislation. At the same time, he said the seriousness of the social and economic policies at play are such that the bill can't be rushed and any perceived loopholes will have to be addressed if the measure is to garner support.

Key features of the bill seek to authorize the creation of an intrastate online poker network and provide a regulatory structure for its implementation, operation and taxation. S.F. 458 envisions an authorized online poker hub operator under the control of the state Racing and Gaming Commission that would contract with state-licensed casinos to operate affiliated online sites within a “closed loop” in Iowa for registered players at least 21 years of age. The proposed legislation also would end the requirement that existing state-licensed casinos periodically conduct countywide referendum votes and seeks to resolve a dispute over purse money among the state's various horse breeders and the Altoona racetrack-casino.

Sen. Randy Feenstra, R-Hull, a Senate Ways and Means Committee member, said he favors the horse purse agreement and believes the referendum provision has merit if an option is included for citizens to mount a reverse referendum with a reasonable number of required petition signatures to deal with “bad actors” that citizens wish to remove. However, he said he would oppose Internet poker and has concerns about an alternative being offered to study the Internet gaming issue unless the report was compiled by an independent third party.

“I'm adamantly opposed to Internet gambling and I really don't want any part of that. If any part of Internet gambling is in the bill, I will not be voting to move it out of committee,” Feenstra said. “I've done the research on Internet gambling and it's not pretty. There's a reason why no state in the nation has taken it upon themselves to do this. It's got the highest addiction rate of anything.”

Two Linn County Democrats – Sens. Rob Hogg of Cedar Rapids and Swati Dandekar of Marion – said they won't vote for the gambling measure, and Sen. Joe Bolkcom, D-Iowa City, Ways and Means Committee chairman, said he won't schedule committee consideration unless backers have the votes to pass it. “It's not clear whether they do or not,” Bolkcom said. “I don't know what its fate is at this point.”

Danielson said the proposal provides consumer protection and regulatory structure that currently are lacking, but Sen. Merlin Bartz, R-Grafton, said the measure also contains some vexing loopholes and is built on assumptions that it will generate $30 million in new revenue to the state and clean up online operations.

“I have some real reservations about an expansion of gaming in the state based upon premises that we can't substantiate,” he said.

“If I was going to analyze it today based upon the bill in front of us, there are not enough votes to pass it,” Bartz added. He noted that the bill could pick up amendments seeking to end dog racing at greyhound tracks, ban smoking on casino floors, and raise tax rates on casinos to levels Gov. Terry Branstad has proposed which could further complicate the debate.

Dotzler said he has heard concerns that in addressing those Iowans who reportedly are playing online poker illegally now, the proposed gaming expansion also is going to encourage a new group of players the casinos will need to make their ventures profitable. He's even heard worries that the measure could allow TouchPlay machines to be hooked up and operated, while Feenstra said he's concerned the language allows online games beyond poker, and Bartz questioned whether it would allow floating casinos on waterways in a county where voters have not approved a gaming referendum.

“There are problems with this bill but the whole concept is we are looking at trying to stop an illegal activity, put some safeguards and some controls in it, and at the same time capture revenue that has been escaping not only from our states but out of the country,” Dotzler said. “I think it's time to control and put safeguards on this Internet gambling because it's just going to continue to expand and we're going to have to face the issue sooner or later. Maybe the federal government does it but I think it's wise for us to move forward with this and try to continue to work on this whether it's this year or next year.”

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