RealTime IT News

House Panel Calls For Broader Gambling Ban

A House subcommittee has approved legislation banning all forms of online gambling in the United States. To strike at offshore gambling sites, the panel authorized law enforcement officials to stop credit card and other forms of electronic payments to those sites.

Violators would be subject to up to five years in prison.

"Virtual betting parlors have attempted to avoid the application of United States law by locating themselves offshore and out of our jurisdictional reach," bill sponsor Bob Goodlatte (R-Va.) said in a statement. "These offshore, fly-by-night Internet gambling operators are unlicensed, untaxed and unregulated and are sucking billions of dollars out of the United States."

The legislation now moves to the House Judiciary Committee.

Under current federal law, the Wire Act, passed by Congress in the early 1960s, prohibits making sports gambling wagers over the telephone. It is not legally clear if the Wire Act actually applies to the Internet, a situation that Goodlatte's bill hopes to correct.

The Internet Gambling Prohibition Act, H.R. 4777, amends the Wire Act to make it clear that the prohibitions include Internet gambling and the use of other new technologies.

"Gambling on the Internet has become an extremely lucrative business," said Goodlatte. "Numerous studies have charted the explosive growth of this industry, both by the increases in gambling websites available, and via industry revenues."

Internet gambling is now estimated to be a $12 billion industry, with approximately $6 billion coming from bettors based in the U.S.

Goodlatte has twice before introduced similar legislation but was unable to garner enough support to pass the bill.

In April, banking representatives testified against the legislation.

"Our concern is that the added burden of monitoring all payment transactions for the taint of Internet gambling will drain finite resources currently engaged in complying with anti-terrorism, anti-money laundering regulations and the daily operation of our bank," Samuel Vallandingham, representing the Independent Bankers of America, said.

The legislation allows states to continue to regulate gambling within their borders.

"Offshore online gambling Websites are cash cows and the greed that propels these companies leads them to solicit bettors in the U.S., despite the fact that the Department of Justice already believes this activity is illegal," said Goodlatte.