Las Vegas Sun

March 29, 2024

Internet gaming bill OK’d

WASHINGTON -- The House on Tuesday overwhelmingly approved legislation aimed at halting Internet gambling by outlawing the payment methods used for wagering -- credit cards, checks and electronic money transfers.

The House moved the bill, authored by Rep. Spencer Bachus, R-Ala., to the Senate with a decisive 319-104 vote.

Reps. Jim Gibbons, R-Nev., voted for the bill. Reps. Jon Porter, R-Nev., and Shelley Berkley, D-Nev., voted against it. Porter believes the bill does not have sharp enough teeth to stop Internet gambling, Porter spokeswoman Traci Scott said. Berkley said illegal gambling cannot be stopped and Congress should attempt to regulate and tax it.

"Let us not be foolish enough to believe this will prohibit people from gambling online," Berkley said during floor debate. "Online gambling is here to stay."

The Senate has not yet voted on the legislation, which has been winding its way through Congress for several years as lawmakers struggled to tackle the $4 billion cyber-casino industry, much of which is based off-shore and outside the reach of U.S. law.

A bill introduced by Sen. Jon Kyl, R-Ariz., pending in the Senate Banking Committee, differs from the House legislation in that it carries criminal penalties for gambling website operators -- up to five years in prison.

Congress "is as close as it has ever been" to enacting a ban on Internet casinos, Kyl said in a statement.

"Internet gambling is not a harmless diversion, but a growing danger that preys on young people, takes advantage of gambling addicts, and encourages criminal activity," Kyl said.

Some critics inside the Internet gambling industry have said the bill ultimately will do little to stop Internet gambling because off-shore website operators will find ways around the payment method bans.

The Internet gaming industry's largest lobby group, the Interactive Gaming Council, opposes the legislation. The group supports efforts aimed at regulating the industry, not eliminating it. The group strongly denies that terrorists or organized crime syndicates use gambling websites to launder money.

The House and Senate both have separately approved versions of bills aimed at banning Internet gambling in past years, but have never sent a compromise bill to the president for signature.

In several hours of wide-ranging House debate, the bill's supporters often argued that Internet gambling has in six years grown into an unregulated, untaxed industry that hurts families, especially children, who gamble. An estimated 1,800 gambling websites are in operation.

"These websites are extremely destructive," Rep. Sue Kelley, R-N.Y., said. "It's time we put them out of business."

Gibbons said he was optimistic the bill could accomplish its goal if the Senate approves similar legislation. Gibbons and other lawmakers said the bill reinforces the 1961 Wire Act, which bans betting over telephone wires.

"This bill provides a resource to enforce the current law by taking away the financial mechanisms for Internet gaming," Gibbons said.

The gaming industry's top lobby group was neutral on the bill. The board of the American Gaming Association is opposed to Internet gaming, but president Frank Fahrenkopf said he had reservations about banning credit cards in gambling. Industry foes could use the legislation to eventually try to ban credit cards in traditional casinos, Fahrenkopf said.

Fahrenkopf also said gaming lobbyists will be keeping a close eye on the bill in the Senate, where Sen. John McCain, R-Ariz., could try to attach an amendment to it that bans legal betting on college sports in the one state where it is offered -- Nevada. Nevada lawmakers and the industry strongly oppose that legislation.

Dissenters on the Bachus bill were few but passionate. Rep. Barney Frank, D-Mass., said it was not up to lawmakers to limit what adults do in their own homes.

"Where are the libertarians when you need them?" Frank asked, scanning the House floor. "Why in the world is it anybody in this building's business? If other people want to put a bet down -- mind your own business."

Rep. Jim Leach, R-Iowa, countered that Internet gambling is a social issue, not a libertarian one. Internet gambling hurts the economy by sending money overseas, hurts national security by offering terrorists a money-laundering machine and hurts American families, Leach said.

"We ignore gambling at our peril," Leach said. "It is a libertarian myth that only the gambler is affected."

Leach and Rep. Bob Goodlatte, R-Va., the House's two leading opponents of Internet gambling, said they regret the bill doesn't go further to outlaw the industry, but they called the legislation a credible first step.

The bill's most controversial provision contains exemptions for several types of state-regulated gaming industries that would be allowed to accept on-line wagers. Those include horse- and dog-racing and jai alai, as well as casinos that under the bill could offer Internet gambling sites if a state like Nevada could figure out how to regulate it within the state.

A number of states already allow a form of Internet gambling on horse and dog racing.

Bill supporters successfully fought off a "poison pill" amendment that, if approved, likely would have led to the bill's defeat. The amendment, introduced by Rep. James Sensenbrenner, R-Wisc., would have removed gaming industry exemptions protected in the bill.

"I believe Internet gambling should be eliminated," Sensenbrenner said. "If Internet gambling is addictive we ought to close the loopholes ... This is a loophole big enough to drive a truck through."

But bill supporters needed the loophole because they needed the support of lawmakers from states who wanted to preserve a state's right to offer some forms of Internet gambling. Kentucky lawmakers argued that the amendment would have endangered off-track betting, which would have crippled the horse-racing industry.

In a side debate, several lawmakers noted that the bill's supporters seemed more motivated by their distaste for gambling in general than by their desire to ban Internet gambling. Their remarks brought a scolding from Berkley. She said those lawmakers should be "ashamed" for disparaging Las Vegas and the gaming industry that supports Nevada.

But Rep. Mike Rogers, R-Mich., assured Berkley the debate was about off-shore sites, not about Las Vegas gambling. Rogers, a former FBI agent, said cases were pending in which organized crime groups had used Internet gambling sites to launder money.

"This is dangerous, dangerous stuff," Rogers said.

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