U.S. Congress Debates Online Gaming This Week

Reps. Jim Leach (R-Iowa) and Bob Goodlatte (R-Va.) have cobbled together some new legislation, based on their old legislation, Internet anti-gambling bills, which have failed to be passed into law by the Congress. A vote on the combined bills may happen this week, after hearings and debate.

"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." Rep. Leach said.

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

Prohibition Proposal

The Internet Gambling Prohibition and Enforcement Act (H.R. 4411) – the new bill – is aimed at reducing the streams of money from U.S. gamblers to offshore Internet gambling sites. U.S. law enforcement officials claim there are no U.S.-based Internet gambling sites.

Under the proposed law, banks who process transactions by credit card, check, wire transfer, and the like, could face criminal sanctions, if they completed a transaction for an offshore gambling site.

The bill also demands that banks establish payment systems to block transactions with offshore gambling sites, including poker rooms.

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

Online casino players and operators probably won’t see any changes any time soon, however, as the politicians have both introduced anti-gambling measures in the last four Congresses, all of which have failed to become law.

Bankers Worried

"Gambling on the Internet has become an extremely lucrative business," Goodlatte said.

The banking industry is worried about 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," said Samuel Vallandingham, spokesman for the Independent Banks of America.

The spokesman said he wondered whether the bill could "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."

Experts note that it has been more than a decade since the first online casinos emerged, and that 23 million people log onto online gaming sites every day. Essentially, the experts say, the laws lag behind the commercial entrepreneurs who have created these sites.

Even Rep. Lynch acknowledges that it may be impossible to stop online gaming, as, in a technical, legal sense, there is no real way to enforce any prohibition on online gaming. “It’s unenforceable,” said Rep. Lynch.

Gaming industry representatives say that they would accept regulation, rather than legislation, for the emerging industry.

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