Discussion of consumer protection took center stage on Tuesday morning as the House Subcommittee on Commerce, Manufacturing, and Trade addressed legalizing online gambling, and online poker, in the United States. Unlike previous hearings that have largely focused on the moral aspects of gambling, Tuesday’s session avoided that topic in favor of debating whether consumers can be adequately safeguarded. Needless to say, it was a constructive change of pace.

Subcommittee Chairwoman Mary Bono Mack (R-CA) started Tuesday’s hearing by telling the audience and several thousand online viewers, “Clearly, the stakes are high and a showdown could happen on Capitol Hill in the following months… Gaming policy and regulation are generally handled by the states, but the legal status of online gaming is a lot more complicated… Illegal gambling has been growing in popularity as well… Hopefully after today’s hearing, we’ll have an idea whether to hold’em or fold’em.”

Congressman Joe Barton (R-TX, pictured), who introduced HR 2366, a bill that would green light online poker in the United States, told the committee that poker is as American as apple pie: “Poker is the all-American game. Richard Nixon financed his first campaign partially with his poker winnings from World War II. I learned to play poker in the Boy Scouts, so if you learn something in the Boy Scouts, it has to be a good thing, right?” HR 2366 was introduced back in June and has received bipartisan support.

Representing the Poker Players Alliance (PPA) as a panelist was former three-term U.S. Senator Alfonse D’Amato. When asked for his opening statement, D’Amato asserted, “The status quo is badly broken and it benefits no one… Although it may be well intended, the legislation that passed five years ago has created many more problems than it has solved. It has endangered those who want to participate in an honest game… Internet poker has not gone away and it’s hard to envision a scenario where it will. It takes place under the radar with no regulation, with no tax.”

FairPlayUSA Chairwoman Perry Aftab (pictured) added that she was extremely concerned with consumer protection: “It’s very much a matter of protecting our families and our kids… All of these issues can be dealt with the ironic position of legalizing certain aspects of online gaming. The benefits of this allow us to help people who have been defrauded. It’s not a matter of whether gambling is immoral or not, but [whether] we can put safeguards in effect that aren’t in effect now. What’s happening now isn’t working.”

Law professor Kurt Eggert echoed the importance of safeguarding players, a topic that could have been on the minds of many given the recent fiasco with Full Tilt. Eggert commented, “When I think about gambling, the question I have is what consumer protections should be in place. Gamblers used to be looked down on, but now they’re just consumers, so we should treat them as consumers as we would in other industries.”

Eggert brought up the fact that bots and poker software could give certain players an edge over others. After two hours, Eggert proposed a solution to the software issue: “I don’t think you can prevent people from using bots. The solution would be to have a rating system whereby if you want to play against people to know if they’re good or bad, you have a rating system.”

Dan Romer, the Director of the Adolescent Communication Institute at the Annenberg Public Policy Center, asked lawmakers to institute safeguards for underage gamblers: “Young people at a very early age are starting to gamble. It’s very important for the committee and the Congress to think about what the impact will be on families and young people when it comes to online gambling. If we have gambling that provides safeguards and protects underage gamblers – it would be excellent to include in any legislation.” He also mentioned the need to control gambling-related advertising.

Charlie Bass (R-NH) asked D’Amato whether the PPA would be against state lotteries offering online poker games. Bass also wanted to know whether lottery revenues would be pilfered. D’Amato asserted, “We would have no objection whatsoever. As it relates to whether there has been an impact, we believe that people who buy lottery tickets are generally not the same people [who play poker] and we don’t believe they compete.”

Among those doubting whether internet gambling can be properly regulated was Gregg Harper(R-MS, pictured), who asked the panel one-by-one whether their organization receives funding from offshore sites. Only the PPA and National Council on Problem Gambling responded in the affirmative.

Harper offered up his ideal solution: “Perhaps the way to deal with offshore casinos is to block payment to those sites. We certainly have some that have argued we should develop legalized online gambling in this country much the same way as we have heard others say we should legalize certain drugs.” You’ll recall that the UIGEA outlawed payments sent from gamblers to illegal gambling sites.

Discussion of bots resurfaced several times, with Aftab explaining how online poker sites can detect their use: “The online sites, if they’re well done, can watch for [bots] as well. Once you’re dealing with full authentication, it allows you to start tracking patterns.” Barton then added that HR 2366 could be amended to send repeat bot offenders to jail.

Nearly every panel member agreed that poker rooms currently accepting U.S. wagers should not be allowed to seek an internet gaming license, which could include PokerStarsand Full Tilt, which were discharged from the U.S. market in April. Aftab admitted that U.S.-facing sites pose significant consumer protection risks: “Consumers here don’t know where to go. We’re finding consumers with no place to go, no recourse, and law enforcement personnel that have no idea what to do.”

Finally, as originally proposed by Eggert, most of the panel agreed that the “house” should prominently display its probabilities of winning. D’Amato (pictured) explained that the PPA would support such a measure: “We would have no problem supporting legislation that calls for identification of what percentage the house keeps. That’s great consumer protection in putting it out there before they deal those cards.”

No markup of HR 2366 was announced. Mack closed the 150-minute hearing by saying that the committee will “thoroughly” investigate the issue going forward. Stay tuned to PocketFives.com for the latest poker legislation headlines. Click here to view the six-member panel’s testimony.