Prospects for U.S. Internet Gambling Post-Midterm Elections

Rep. Barney Frank (D-Mass.) has been pivotal in efforts to legalize Internet gambling in the United States. In 2007, he introduced the first of several bills that would legalize some online gambling activities. More than that, Rep. Frank has staunchly opposed criminalizing Internet gambling since the topic first came into Congressional view, and has advocated the right of people to gamble in their own home.

Tuesday’s mid-term election appears likely to result in a vast Republican sweep. Many online gamblers worry about the prospects of legalizing online gambling if Barney Frank were to lose his powerful position as Chairman of the House Financial Services Committee. There is also the small possibility that Frank could lose his election and no longer have any influence at all in the discussion of legalized gambling. Are these worries justified?

The most likely outcome of the mid-term elections is that Rep. Frank will win reelection, but lose his position as Chairman of the House Financial Services Committee. Based on recent Boston Globe polling data, Barney Frank has a decent lead (about 13 points) over his Republican opponent, Sean Bielat. Majority party members operate as committee chairmen. Recent Gallup polling indicates that Republicans in general are up by about 15 percentage points and are likely to pick up enough seats to become the majority party in Congress, which would leave Frank in the minority.

After the election:

After the fallout of tomorrow’s elections, there is the possibility that Barney Frank will try to cram legislation through during the House lame duck session, before losing his position as Chairman—or, much less likely, exiting Congress entirely. There has been some discussion about passing the bill in the Senate, which is less likely to find itself under Republican control following the election. There is also the possibility that proponents could get the bill passed by attaching it to a larger bill. According to an article last month in the newspaper The Hill, a Senate Democratic aide indicated there is a small chance that the bill could move once Congress reconvenes as an attachment to the jobs bill.

Even if Barney Frank wins his seat and Congress and the Senate remains under Democratic control, it is possible that the 69-year old veteran lawmaker could simply retire from Congress. In his recently released biography, Frank noted his interest in taking a cabinet post in the Obama administration.

Life after Barney:

Were Barney Frank to leave Congress or lose chairmanship, it would not necessarily spell the end for legalized Internet gambling. For one thing, many Republican congressmen have begun to see the positive side of legalization. For instance, during the committee vote that approved Frank’s legalization bill (HR 2267), seven Republican congressmen approved the bill, including Reps. Judy Biggert (R-Ill.), John Campbell (R-Calif.), Jim Gerlach (R-Pa.), Peter king (R-N.Y.), Leonard Lance (R-N.J.), Christopher Lee (R-N.Y.), and Kenny Merchant (R-TX). In addition Ron Paul (R-TX) strongly supports the idea of decriminalizing Internet gambling, though he voted “Present” during the hearing.

More Republicans could swing towards supporting legalized Internet gambling once they realize its possibilities as a monster revenue generator. According to political strategy analyst Chris Krueger in a CNBC interview (video available here):

[T]he trump card for Internet gaming for lack of a better word is that it raises $42 billion over 10 years. That’s a big offset that you can tack onto an expensive tax extenders bill or even some sort of a transportation bill. … So in the lame duck with a Republican sweep the odds would go up that an Internet gaming ban lift could get through. Next year though without Barney Frank in his position of leadership I think it faces some long odds. But again it raises $42 billion over 10 years and you can’t discount that in a congress that’s really going to be starved for revenue raisers.

For many of the incoming Republicans, a poker bill could seem like the perfect way to continue generating funds while fulfilling their campaign promises to lower taxes and extend tax cuts. So, while Barney Frank has been the primary proponent in Congress for legalizing Internet gambling, its greatest advocate might just be the revenue it could raise. For better or worse, money is the argument that seems to transcend party lines these days. As a result, the prospects for an Internet gambling legalization bill look good, with or without Barney Frank.