Rep. Jim Leach (R.-Iowa) is betting he can double his past legislative successes in banning Internet gambling. In the 107th Congress, Leach managed to squeeze out a House voice vote approval for a measure prohibiting U.S.-based banks, credit card companies and other Internet payment systems from making payments to gambling sites. The bill failed to receive a hearing in the Senate.
Even without the legislation, Visa, MasterCard and PayPal now refuse to process betting transactions by their members.
When the 108th Congress convened Tuesday afternoon, Leach re-introduced the his legislation, the Unlawful Internet Gambling Funding Prohibition Act (H.R. 21). The bill is strongly supported by the White House, family groups, sports leagues and law enforcement agencies.
Leach’s legislation comes at a time when online gambling executives are in Costa Rica, one of the major hubs of off-shore gambling sites, seeking alternatives pay methods for Americans using their sites. There are an estimated 1,500 offshore Internet sites that are beyond the jurisdiction of the U.S., where online gambling is illegal.
According to investment firm Bear, Stearns and Co., offshore gambling sites are expected to generate more than $4 billion in revenue this year. It is estimated that more than 60 percent of that revenue comes from Americans.
Leach claims recent studies have found that Internet gaming sites which utilize credit transactions are a potentially “powerful vehicle” for criminals to launder funds and evade taxes, and provide a direct pipeline of dollars into terrorist hands.
“The very characteristics that make the Internet such a valuable resource are also the reasons why it has such a huge potential to impinge on the stability of the American family, American financial institutions and our national security,” Leach said.
