11:14 PM PDT on Friday, July 30, 2010

Washington Bureau

WASHINGTON – A plan to legalize online gambling moved forward this week in the U.S. House of Representatives, raising concerns from an Inland lawmaker and area tribes, who say the legislation would cut into California’s casino business and imperil thousands of jobs around the state.

The legislation, which would allow gamers to make certain kinds of bets legally over the Internet, was approved Wednesday by the Financial Services Committee, clearing the way for a vote on the House floor.

Online gambling is currently against the law. But websites featuring poker and other games exist offshore and outside U.S. regulation. The committee’s chairman, Rep. Barney Frank, wants to legalize the popular sites within the United States, regulate and tax them.

Supporters say that legalizing online gaming would create a whole new industry, creating additional jobs that would augment traditional casino gaming.

Proponents of the legislation say that it, along with a companion bill setting up the tax structure, would lead to more than $40 billion in revenue over a decade.

But that number is based on the assumption that no state would exercise a provision in the bill allowing them to “opt out” via acts of their legislatures.

Meanwhile, Rep. Joe Baca, D-Rialto, told Frank and other lawmakers that legalizing online gambling would threaten some of the 22,000 tribal gaming industry jobs in the state, as well as the $450 million in revenue California receives annually from the industry through tribal compacts.

“California can not afford to see these revenues trimmed,” Baca said during Wednesday’s often testy committee hearing on the bill.

He was one of four Democrats to vote against the legislation, which was approved 41-22.

Though disappointed, tribal officials vowed to keep trying to persuade lawmakers in the House and Senate to oppose the bill, which would still have to pass the full House and the Senate before President Barack Obama could sign it into law.

“The fight’s not over yet,” said Patrick Dorinson, spokesman for the Morongo Band of Mission Indians, which operates a casino off Interstate 10 near Banning.

Tribal opposition

With the language of the bill in flux and various provisions in question, no study has been conducted to estimate the total number of tribal jobs or revenue that could be lost if it is enacted.

But Dorinson said the toll would be felt in areas including Inland Southern California, where there is a concentration of Indian casinos, including those operated by the Morongo band, the San Manuel Band of Mission Indians and the Pechanga Band of Luiseño Indians.

“If the casino is providing jobs in an area, and that industry suffers, the ripple effect throughout the local economy is going to be felt,” he said.

“And the Inland Empire is already suffering economically.”

The Tribal Alliance of Sovereign Indian Nations, a group representing 10 Southern California tribes, earlier this month sent Frank’s committee a letter opposing the bill.

“Tribes are deeply concerned that this bill would significantly and permanently alter the landscape of the gaming industry and the foundation upon which many decisions, agreements and financial commitments were premised,” Alliance chairwoman Lynn Valbuena said. She is also the San Manuel Band of Mission Indians board’s vice chairwoman.

The group would look to California’s congressional delegation to protect their interests as the legislation moves forward, she said.

quick Passage unlikely

With Congress preparing to adjourn for August recess and no similar bill yet making its way through the Senate, it is unlikely that the bill could be passed before this November’s elections.

Still, the bill’s backers hailed its passage through committee — with support from Democrats and Republicans — as major progress.

Efforts to legalize online gambling on the state level have yet to succeed.

“This is an incredibly significant development for us and a show of the support for regulating the industry,” said Michael Waxman, spokesman for the Safe and Secure Internet Gambling Initiative.

The group is backed primarily by e-commerce companies with interest in online gambling.

Republicans on the committee mostly voted against the bill, with many voicing opposition on moral and social grounds.

Rep. Spencer Bachus, R-Ala., the panel’s top Republican, said online gaming would be available to any American, including minors and problem gamblers, if the bill becomes law.

“It will be in every home, every bedroom and every dorm room in America,” he said. “That simply cannot be done.”

Frank, D-Mass, the bill’s author, countered that laws prohibiting gambling amount to a “fundamental interference with the right of individuals to use the Internet how they choose.”

“Nobody is forced to bet,” he said.

Baca, seeking to soften the bill’s impact, offered a pair of amendments.

The first, language meant to ensure that tribes have equal opportunity to pursue Internet gambling revenue, had to be withdrawn because it was outside the committee’s jurisdiction.

The other would have changed the provision allowing states to opt out of the law.

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