Banking Committee Passes Web Anti-Gambling Bill
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The Senate Banking Committee Thursday approved legislation to ban credit card and other types of electronic payments to offshore casinos. Passed on a vote voice with no debate, the Unlawful Internet Gambling Funding Prohibition Act (S. 627) carries criminal penalties of up to five years in prison for violators.
A similar version of the bill has already been passed by the House of Representatives. The legislation is strongly supported by the White House, family groups, sports leagues and law enforcement agencies.
In the 107th Congress, a similar bill passed the House but failed in the Senate.
Sponsored by Sen. John Kyl (R.Ariz.) and co-sponsored by Dianne Feinstein (D.-Calif.) and Richard Shelby (R.-Ala.), the legislation was prompted by concerns of organized crime involvement in online casinos and the alleged addictive nature of Web gambling.
The bill creates a new crime of accepting financial instruments, such as credit cards or electronic fund transfers, for debts incurred in Internet gambling. Also, because the operators of Internet gambling sites are off-shore and beyond the reach of U.S. law enforcement tactics, the legislation enables state and federal attorneys general to request that injunctions be issued to any party, such as financial institutions and Internet service providers, to assist in the prevention or restraint of the new crime.
The bill allows federal bank regulators to create rules requiring financial institutions to use designated methods to block or filter illegal Internet gambling transactions.
Although the Internet is flooded with ads promoting offshore casinos, it is, according to most law enforcement officials, illegal for Americans to bet through the sites. The Justice Department contends existing laws already make all Internet gambling illegal for Americans.
The 1961 Wire Wager Act specifically prohibits the use of telephone lines for the purpose of placing a sporting bet. Since the Internet uses telephone lines, courts have ruled the Wire Act also covers Web sports wagering, but a recent federal appeals court decision said it was beyond the scope of the original law to include placing a casino bet online.
The feds are appealing the ruling, but even if a future court decision says the law does apply to online casinos, all of them are located offshore and beyond the jurisdiction of the U.S. That leaves the government with only two options: go after individual gamblers or convince the countries licensing offshore casinos and sports books to cease and desist. Neither seems likely.
Despite current laws, Americans are driving the growth of online gambling sites, which grew from about two dozen sites in 1995 to almost 2,000 locations in 2002. Last year, the sites are estimated to have pulled in more than $4 billion in revenue.