UK COMPANIES HIRE US LOBBYISTS FOR ONLINE GAMBLING GRASS ROOTS CAMPAIGN

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Educating legislators and the public alike on safe and secure Internet gambling

The efforts of Congressman Barney Frank and other US politicians to introduce legalised and regulated online gambling to the United States will receive a further boost this week by the news that two U.K.-based companies are planning a grassroots campaign in favour of legislation to regulate the multi-billion-dollar industry.

The Washington publication "The Hill" reports that the UC Group, a payment-services company with effective technology to verify the age and geographic location of gamblers, has teamed up with international accounting firm Baker Tilly to launch the “Safe and Secure Internet Gambling Initiative” in America.

The companies, which already work to provide back-office and payments services to Internet businesses in a range of sectors, have hired lobbying firm Alston & Bird LLP to push the Frank legislation, introduced last month. Alston & Bird has contracted another lobbying firm, Downey McGrath Group, to aid in the effort.

“The [Safe and Secure Internet Gambling] Initiative is both to educate parts of the public as well as to garner grassroots support from other companies, organizations and individuals for the legislation,” the initiative’s spokesman, Jeff Sandman of Hyde Park Communications, said.

Congressman Frank, who is the chairman of the influential House Financial Services Committee has proposed that a system of licensing and regulation be introduced, overseen by a unit of the U.S. Treasury, which would be required to guard against underage and compulsive gambling as well as money laundering. Individual states, professional sports leagues and college athletics organisations have the option of staying out of the regulatory regime in a move seen as necessary to ease the passage of the bill.

In addition to systems that pinpoint the age and location of bettors, the UC Group has technology to detect compulsive gambling and money laundering, making it well suited to flourish under the regulatory scheme proposed by Frank. The company currently sells such systems to a number of clients around the world, Sandman said.

The law on online gambling remains murky. A handful of states have banned online betting in any form. In 2002, a federal appeals court ruled that it is illegal to transmit information for sports betting across state lines, but affirmed that federal law does not prohibit placing online bets on “games of chance.” Meanwhile, lower courts have ruled that it is illegal to own a sports-betting operation that caters to U.S. citizens.

Last fall, Congress passed a law barring the use of credit cards for online bets but exempted horse racing, state lotteries and fantasy sports.

UC Group has been lobbying Congress on Internet gambling since the spring of 2005, filings show. Last year, the company submitted testimony to a House subcommittee on the issue. According to Sandman, it was among several companies that met with Frank and other members of Congress to discuss the various safeguards that could be implemented under regulated online gambling.

A leading international accountancy, Baker Tilly hired Alston & Bird to lobby on the issue in February. The firm has about 7 000 U.K. clients and  boasts more than $2 billion in revenues.

Consumers will be among the primary beneficiaries of regulated online gambling, Sandman argues. They will have systems
“to make sure that their financial transactions are being processed safely and securely,” he said.

UC Group and Baker Tilly envision a “comprehensive grassroots effort” in support of the Frank regulatory regime, and the companies have set up a website at www.safeandsecureig.com .

The Safe and Secure Internet Gambling Initiative is a company-led effort in favour of a controversial pastime. That would be a novel use of grassroots tactics, according to Jeffrey Oldham, a senior vice president at Direct Impact, a consultancy that specialises in grassroots mobilization.

“This is the first time I’ve heard of grassroots being used for a non-traditional issue,” he said. “I think it will be interesting to see whether members of Congress will listen.”

Congressman Frank has repeatedly said that public support for his initiative - specifically by US citizens communicating with political representatives on the issue - is a critical element in his strategy.