05-Jul-2009
|
|
|
Testimony Of Frank Catania |
Testimony Of Frank Catania
Frank Catania is an attorney and principal in Catania Consulting Group, Inc. of New Jersey, a consulting firm with extensive experience in gaming issues. He is a former Assistant Attorney General and Director of the New Jersey Division of Gaming Enforcement, the regulatory and enforcement agency responsible
for maintaining integrity and trust in all Atlantic City gaming operation. He currently serves as Chair of the International Masters of Gaming Law, has previously served as chair and vice chair of the International Association of Gaming Regulators, and was a co-founder and past Chair of the Forum of American Casino Regulators.
Before The Assembly Tourism & Gaming Committee Hearings On AJR51 - January 9, 2003
Mr. Chairman and Members of the Committee, I would like to thank you for the opportunity to testify briefly today on the establishment of an Internet Gambling Study Commission, AJR51 (Guear / Impreveduto).
As background, I am a former Assistant Attorney General and Director of the New Jersey Division of Gaming Enforcement having served in that capacity from 1994 through 1999. Since leaving that position, I have established a consulting business to assist states, foreign governments, and companies establish strict regulations for the oversight of gaming.
Among my clients is the Interactive Gaming Council (IGC), an international non-profit trade association of companies around the globe that are involved with the interactive gaming industry. The IGC is an advocate for regulation of the online gaming industry and comprises the portion of the industry that does not subscribe to a “Wild West” approach to on-line gaming, but instead adheres to an industry code of conduct, where players’ rights are protected, sites operate in a reasonably transparent fashion, and operators comply with the licensing and regulatory policies of the jurisdictions in which they operate.
In my experience, it is apparent that the application of gambling to the Internet has created a market force that cannot be stopped without pulling the plug on the entire World Wide Web. The total number of Internet gambling sites is estimated to be 1800. The Internet gambling industry has a projected gross income of 4.3 billion for 2003. Therefore, billions of dollars are reportedly being bet over the Internet with little, if any, oversight or guarantee that the operators of these sites are fair and honest or that protections are in place to keep children and compulsive gamblers away. These revenue projections imply that a percentage of these monies are from our citizens and leave not only New Jersey but also the United States with no subsequent benefit, directly or indirectly, to New Jersey (including no dedicated funds for protecting children and problem gamblers through education or other programs). To that end, I applaud the efforts of Chairman Guear and Assemblyman Impreveduto to create a commission that can learn about the Internet gaming industry and potentially develop sensible solutions for the protection of New Jersey citizens.
Legislators, Regulators, and Policymakers from all over the world are struggling with the challenges of new technologies; and, Internet gaming is one component of Internet commerce that has drawn a lot of attention. The complexity of the Internet gaming issue is evident by the problem that nobody is certain exactly how or if Internet gambling can be legalized, and if legalized how the promulgation of regulations should be accomplished. I believe the proposal to create an Internet Gambling Study Commission is not only insightful it is timely.
Clearly, there are a number of difficult issues that would need to be addressed before decisions are made with regard to Internet gaming. A commission looking into the matter will face a complex tangle of legal and technical questions. Some of the legal and technical issues a commission exploring potential regulatory schemes would look at, include: amending federal law, cash transaction reporting practices and procedural safeguards to protect against money laundering, tax revenue sharing, random testing of games and software to ensure fairness and consumer protection, licensing requirements, background checks of qualified operators, enforcement of underage gambling statutes and methods of identifying and helping problem gamblers.
Tax preservation is another major consideration for NJ. New Jersey has a valid concern that state-licensed gambling establishments could see a significant decline in revenues as the popularity of Internet gambling grows. Most Americans have a limited discretionary income. This is no less the case with Americans who enjoy gambling as a form of entertainment, whether it is in Las Vegas or on the Internet. Currently, Americans wager billions of dollars per year at offshore cyber casinos and analysts expect this figure to increase annually for the foreseeable future. It logically follows that the more money wagered or played by Americans at offshore Internet casinos, the less money they will play with U.S. casinos or state-sanctioned gambling activities like lotteries. Consequently, states could be losing tax revenue in the tens of millions per month.
Mr. Chairman, I would like to end my testimony by again commending you and Assemblyman Impreveduto for your efforts to create this commission. In my view, your proactive approach to such a complex policy issue is a testament to your commitment to your constituents.
Once again, thank you for the opportunity to testify. I have attached a one-pager summarizing some of the current issues related to Internet gaming, for the convenience of the Committee and staff.
|
|
|
|
