Further Detail On US Internet Banning Bill
Published: Thursday, March 16, 2006 Online-Casinos.com
FURTHER DETAIL ON U.S. INTERNET BANNING BILL
Carve outs and manouevring again a feature
Further details are now to hand on the earlier Online-Casinos.com bulletin reporting
the acceptance of what is now confirmed as Bill HR 4411 presented by Rep.
James Leach.
Leach is quoted in media reports as saying: "H.R. 4411 will create strong
tools to help federal and state governments enforce existing gambling prohibitions.
Unlike in brick-and-mortar casinos in the United States where legal protections
for bettors exist and where there are some compensatory social benefit in jobs
and tax revenues, Internet gambling sites principally yield only liabilities to
Americans."
Observers point out that by banning instead of regulating, politicians are denying
Internet gambling the opportunity to be regulated and taxed in company with like
land-based establishments.
Predictably, the proposal contains carve outs, principally for the powerful horse
racing industry, where it allows simulcasts across state lines as well as account
wagering via phone lines or the Internet in states in which it is legal. Fantasy
sports are also listed as an exception in this bill.
Importantly, this proposal seeks to make it an offence to place bets on online
poker sites and any other online wager made or received in a place where such
bet is illegal under federal or state law.
The committee approval of this bill follows bipartisan legislation, the Internet
Gambling Prohibition Act, introduced into the House in February by Virginia Republican
Rep. Bob Goodlatte and Democrat Rick Boucher, that would outlaw
Internet gambling, but again allow for an exception for horse racing.
It would also set a maximum prison sentence of five years, up from two years,
for a violation of this act. The legislation allows states to continue to regulate
gambling within their borders.
Leading on from this update, a special report from the Stanford Washington
Research Group is germaine to the issue. Having completed studies of the situation,
this body summarises it's findings as follows:
* House Judiciary passage of Internet Gambling bill moves focus to House Judiciary
Committee, which is considering a separate measure that would amend the Wire Act
to outlaw online betting.
* It sees House Judiciary acting in several weeks, with full House passing a combined
bill in late spring.
* Action today is sufficient for us to raise odds of this [banning] legislation
this year to 60 percent as lawmakers appear willing to resolve the banking industry’s
biggest worries.
The report reveals that Leach's measure was changed to give the Federal Reserve
a role in drafting the rules that banks and thrifts will have to follow. This
change largely pacified banking groups.
Attention now turns to the House Judiciary Committee where Rep. Bob Goodlatte
has a similar bill pending. His measure, HR 4777, would amend the Wire
Act to make it illegal to gamble online. The banking industry does not support
the Goodlatte bill as it would give the Justice Department the role of ensuring
bank compliance.
Stanford Research believes that Goodlatte will modify his bill to satisfy the
industry’s concerns. One solution would be to provide joint authority with
the banking agencies. Many other options would achieve the same result of putting
enforcement more in the hands of bank regulators and less in the hands of the
Justice Department.
Rep. Leach says that he sees Goodlatte’s bill as complimentary to his measure,
implying that there is no need to combine the bills before they get to the House
floor.
Leach prescribes steps to stop Internet gambling. Goodlatte amends the Wire Act
to clarify that using the web to gamble is illegal.
House Judiciary has not yet scheduled a mark-up of the Goodlatte bill. Stanford
expects it either the week of March 27 or the week of April 3. That would clear
the way for the full House to act after the Easter recess, which concludes April
24.
Stanford comments that given the smooth passage of the Leach bill, there is reason
to feel optimistic that it will be enacted. The desire to overcome the Abramoff
scandal – the disgraced lobbyist is credited with killing an earlier version
– is strong. At the same time, the banking industry’s worries are being
addressed.
Given these factors, Stanford has increasing its odds for enactment to 60 percent.
However, the company cautions that there are real risks here. It is never easy
to get a bill out of the Senate, even if it is attached as an amendment to another
bill.
