D.C. officials plan to allow Internet-based gambling at hot spots in city

April 13, 2011

D.C. officials said they are planning to set up 20 to 30 online gambling “hot spots” in hotels, bars, clubs and other venues across the city by around Sept. 1, marking a major step in a bid to turn the nation’s capital into a haven for Texas hold ’em and other potentially lucrative Internet-based games.

By the end of the year — if Congress doesn’t revisit the issue, and if the technology works as promised — adults in the District wouldn’t even need to go such places to gamble. Instead, they would be able to key in their payment details on their home laptops to play a virtual hand or two of city-sanctioned poker.

The unprecedented wager has city officials facing difficult questions, including how much money the venture would make and whether it would even be legal.

D.C. Council Member Michael A. Brown (I-At Large) proposed the plan in December as a way for the city to generate revenue. The measure passed as part of the 2011 budget, and Mayor Vincent C. Gray signed it into law in January. Last week, a 30-day period for Congress to object to the plan ended, setting the stage for the city to move forward.

But the recent deal to avert a federal government shutdown — which revived a provision that would bar city money from being used to pay for abortion — shows the potentially perilous path for any local initiative that draws strong opposition in Congress.

Even after the review period, Congress can intervene, said Frederick Hill, spokesman for the House Committee on Oversight and Government Reform, which covers District affairs. “If the committee has a concern that a practice is either illegal or not in the interests of the federal taxpayers who support the District of Columbia, the committee could certainly raise a concern.”

Hill said, however, that the panel has no plans to introduce legislation or hold a hearing on the matter.

Brown insists that the District is on firm legal ground, but D.C.’s chief financial officer said in an analysis of the program that “no consensus exists” on whether federal statutes would prevent D.C. from implementing the program.

“We are trying to do as much innovative stuff as possible to increase revenue,” Brown said. “We have competition around the region on gaming, so we had to do something. Also, the online, offshore poker companies are already here. ”

The gambling program could generate $13.1 million between the 2012 and 2014 fiscal years, according to the chief financial officer’s analysis.

Money would be collected from table fees to join the poker games and from taxes on winnings of $600 or more, D.C. Lottery officials said. The city has signed a 50-50 revenue-sharing agreement with Intralot USA, which would develop and manage D.C.’s gambling site.

Gray called Brown’s effort “innovative.”

“We know that many of our residents are currently engaged in online gaming, but are doing so with off-shore companies,” the mayor said in a statement. “Our goal is simply to regulate the business in the District and to ensure that the District receives its fair share of the financial benefits produced by online gaming.”

A no-stakes gambling Web site would be rolled out by about July 1.

Patrons would be able to play for money at dozens of hot spots by around Sept. 1, said Buddy Roogow, executive director of the D.C. Lottery.

He said he hopes the Convention Center would be one of the places. Officials are still writing the rules for choosing venues.

“That would be an ideal kind of location for a hot spot. So are hotels. There’s only one Convention Center. There are many hotels,” Roogow said. Gamblers would need to bring their own computers to place bets.

Before gambling for money can spread to people’s homes, officials would need to ensure that betting was available only within the geographic limits of the District. They expect to do that by the end of the year.

There has been some local opposition to the idea of online gambling.

“Gambling and lotteries have always been quick fixes for city coffers but fail to provide real economic development,” said Terry Lynch, executive director of the Downtown Cluster of Congregations. “The plan has as many downsides as upsides.”

Lynch fears that virtual poker could lead to a rise in gambling addiction in the city.

Brown said he wasn’t sure whether there would be a way for city residents to provide input on hot-spot locations.

“It’s part of living in a tight, dense city,” he said.

Roogow said the hot spots would be in commercial locations with easy access for tourists and commuters. They wouldn’t be in places “that are easily accessible to houses of worship” or schools, he added.

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