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

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.”

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