Lawmakers Hear Protests Over Internet Gambling Ban

WASHINGTON, D.C. — The House Judiciary Committee listened to testimony yesterday from Justice Department representatives, outside experts and lobbying groups in an effort to confront the legal tangles surrounding Internet gambling.

The committee’s hearing comes on the heels of last year’s passage of the Unlawful Internet Gaming Enforcement Act (UIGEA), which prompted a number of further bills that that would, in various ways, legalize and regulate Internet gambling.

The UIGEA, which came as part of a maritime port security measure, places the onus on financial institutions to ensure that electronic cash and credit card transactions are not used to pay for wagering debts or payouts.

Speaking yesterday the Judiciary hearing, pro poker player Annie Duke blasted the UIGEA, which she said, “essentially deputizes financial institutions as the morality police.”

“More than any other value, America is supposed to be about freedom,” said Duke, who spoke on behalf of the Poker Players Alliance, an advocacy group. “Except where one’s actions directly and necessarily harm another person’s life, liberty or property, government in America is supposed to leave the citizenry alone. Examples of Congress straying from this principle are legion, but few are as egregious” as the UIGEA.

Criticism for the act also came yesterday from the Justice Department, which has been aggressive in applying existing laws to Internet gaming. Catherine Hanaway, U.S. District Attorney for eastern Missouri, testified on behalf of the department that adequate legislation banning Internet gambling is already on the books.

“While many of the laws do not mention Internet gambling [specifically], we believe it to be covered,” she said.

Enforcement of existing legislation has become a hot topic unto itself for legislators and the Bush administration. In recent months, the administration’s enforcement of current laws to target online gambling — particularly the prosecution of London-based BetOnSports PLC — has escalated into a major showdown within the World Trade Organization.

Other countries have since won judgments in the WTO against the U.S. for failing to live up to its treaty obligations, which they charge should allow foreign gaming companies to offer services to American customers.

However, Hanaway said challenges to the U.S.’s ability to use existing law to limit online gambling remain specious to date.

“There have been motions saying our prosecution violates WTO treaties,” Hanaway said during questioning by Rep. John Conyers (D-Mich.), the Judiciary Committee chairman. “Individuals as private citizens don’t have standing [to make those motions] … This Congress said nothing in these treaties would overturn existing laws of the U.S.”

But Joseph Weiler, head of New York University’s Hauser Global Law School, testified before the committee that there is “no question in anybody’s mind that the [U.S.] ban on Internet gambling is a violation of the U.S.’s legal international obligations.”

“The executive branch continues to threaten prosecution of executives [of foreign companies] for activities that the U.S. guaranteed its trade partners that it would [allow],” he said. “This is not a good example of how we conduct ourselves in the international community.”

He added that the withdrawal of the U.S.’s commitments regarding Internet betting would set a dangerous precedent, and could place at risk American interests in other industries overseas.

Likewise, Rep. Shelley Berkley (D-Nev.) also fired at policy regarding existing Internet gambling regulations.

“The WTO has ruled that our laws unfairly discriminate,” Berkley said. Should the administration withdraw its WTO commitments on gambling to continue prosecuting international betting sites, a move would seem like “the trade equivalent of taking our ball and going home,” she said.

The Judiciary Committee is weighing a number of other bills that would alter current Internet gambling laws. Rep. Barney Frank (D-Mass.) introduced a bill in April that would allow licensed Internet gambling operations, and Rep. Robert Wexler (D-Fl.) introduced a measure exempting poker and other “skill games” from the scope of federal prohibition. Both these bills have yet to be reported out of the committee.

Nevertheless, the possibility of lawmakers rolling back prohibitions already affecting Internet gambling seems unlikely, if rhetoric from Judiciary Committee leadership is any indication.

For instance, Conyers, the committee’s chairman, opened yesterday’s hearing by calling gambling a “social evil”.

Ranking minority member Lamar Smith (R-Texas) similarly laid out his distaste for online gambling, saying, “The dangers of Internet gaming are well known … turning back the clock [on the prohibition of online gambling] will only encourage more problems.”

In addition to the Judiciary Committee, the Treasury Department may likely be the next government body to tackle Internet gambling. The department is currently taking public comments on its proposed rules for enforcing UIGEA. The comment period ends Dec. 12.

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