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Online Gambling up For House Debate

Members of the U.S. House of Representatives may get an opportunity next week to place their bets on banning Internet gambling.

Representatives Bob Goodlatte (R-Va.) and Jim Leach (R-Iowa) have combined their Internet anti-gambling legislation into one bill. They're hoping for a full floor debate and a vote by as early as Wednesday.

"There is a booming industry of offshore Web sites accepting bets and wagers from persons located in the United States," Leach said in a statement. "Easy access to Internet gambling Web sites and lack of law enforcement give the U.S. public a misimpression that Internet gambling is not illegal."

The Internet Gambling Prohibition and Enforcement Act (H.R. 4411) is designed to cut the flow of money from U.S. gamblers to offshore Internet gambling sites. Due to pressure from U.S. law enforcement officials, there are no U.S.-based Internet gambling sites.

Under the legislation, operators of various payment systems -- credit cards, checks, wire transfers -- would face criminal penalties for completing a transaction to an offshore gambling site.

It would also require payment systems to establish procedures for blocking transactions to offshore gambling sites.

The bill would also clarify the Wire Act, which specifically bans sports wagering over the telephone, to cover all forms of Internet gambling, including poker sites.

"The expansion of the Internet has created thousands of new businesses, tens of thousands of new jobs and made our lives more efficient," Goodlatte said in a statement.

"However, some unfortunate challenges, such as illegal gambling on the Internet, have accompanied this explosive growth and it is time to bring an end to these illegal activities."

Both Leach and Goodlatte are longtime foes of Internet gambling. The lawmakers have each introduced anti-gambling measures in the last four Congresses, all of which have been defeated or never came up for a vote.

According to Goodlatte, Americans are projected to gamble approximately $6 billion through offshore sites this year. Worldwide, the total is projected at $12 billion.

"Gambling on the Internet has become an extremely lucrative business," Goodlatte said. "These offshore, fly-by-night Internet gambling operators are unlicensed, untaxed and unregulated and are sucking billions of dollars out of the United States."

H.R. 4411 combines language introduced by Leach and portions of Goodlatte's Internet Gambling Prohibition Act.

Both the Leach and Goodlatte bills passed the House Judiciary Committee on May 25.

At an April hearing on Goodlatte's legislation, the banking industry voiced concern over the bill.

"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 of the Independent Banks of America told the lawmakers.

Vallandingham also questioned whether the legislation would "efficiently regulate the targeted behavior at a level which will justify the time and expense required by community banks to comply with another level of regulation."

At the same hearing, a Department of Justice (DoJ) official said the DoJ supports the legislation because it amends an existing criminal statute (the Wire Act) and applies it generally to all wagering over the Internet.

Other supporters of the legislation include the NCAA, professional sports leagues and pro-family and religious groups ranging from the Family Research Group to the Southern Baptist Convention.

"Gambling on Internet Web sites is illegal throughout the United States," Leach said. "No state has authorized this type of gambling."