Saturday, May 27, 2006

Proposals to ban Internet gambling took another step toward becoming law
Thursday as a House committee passed two bills designed to outlaw online
wagering. The action by the House Judiciary Committee means the House could
vote as early as next month on whether to shut down Internet gambling, which
has quadrupled in the past six years into a $12 billion industry. If the
House approves an Internet gambling ban, it would still have to pass the
Senate before being sent to President Bush to be signed into law. The
committee voted 25-11 to pass a bill by Rep. Bob Goodlatte, R-Va., that
would update a 1961 federal statute known as the Wire Act so it would ban
all forms of Internet gambling and apply to new gambling technologies that
may be developed.

"Offshore online gambling Web sites are cash cows and the greed that propels
these companies leads them to solicit bettors in the United States despite
the fact that the Department of Justice already believes this activity is
illegal," Goodlatte said in a statement after the vote.

Goodlatte estimated there are as many as 2,300 gambling Web sites and they
receive about $6 billion annually from U.S. gamblers.

The committee also passed by voice vote a bill by Rep. Jim Leach, R-Iowa,
that would prohibit credit cards and checks from being used to make Internet
gambling payments.

The committee also approved by voice vote an amendment to the Leach bill by
Rep. Chris Cannon, R-Utah, that would preserve states' rights in regulating
gambling.

House Republican leaders would like to merge the Goodlatte and Leach bills
into one piece of legislation that could be brought to the House floor by
the first or second week of June, sources said.

Goodlatte and Leach have expressed a willingness to blend their bills.

"We have had sporadic contacts, and I would think today's votes by the
committee will expedite our negotiations," said Gregory Wierzynski, Leach's
chief of staff.

The committee's debate on the Goodlatte and Leach bills did not include any
mention of a bill introduced Wednesday by Nevada lawmakers that would set up
a one-year study of Internet gambling by a federal commission.

Frank Fahrenkopf, president of the American Gaming Association, said
Congress may not have enough time this year to pass an Internet gambling
ban.

"There are about 35 legislative days left, and if they are going to merge
these two bills, that's going to take some time," Fahrenkopf said.

Rep. Bobby Scott, D-Va., argued that the Goodlatte bill would be ineffective
because 85 foreign countries permit Internet gambling and are unlikely to
cooperate with a ban.

Scott also complained the bill would create an enforcement nightmare for
financial institutions.

"This bill, as written, does not prohibit Internet gambling," Scott said.
"It prohibits running the (offshore) operation. If you wanted to be
effective in prosecuting illegal gambling over the Internet, you would
prosecute the individual gamblers."

Goodlatte responded that his bill modifies a federal statute which applies
to gambling entities, not gamblers.

To address concerns by the Department of Justice, Goodlatte said he amended
his bill so it will not include an exemption for horse racing.

Rep. Robert Wexler, D-Fla., contended the bill still exempts horse racing
and offered an amendment that would exempt dog racing and jai alai. When the
committee voted 21-15 to reject his amendment, Wexler offered another
amendment that would ban all forms of gambling on the Internet.

Goodlatte described the second Wexler amendment as a "poison pill" similar
to a measure backed by convicted lobbyist Jack Abramoff in July 2000 The
committee rejected Wexler's second amendment by voice vote.

Goodlatte blamed Abramoff, who was convicted of bribing members of Congress,
for defeating efforts to pass an Internet gambling ban six years ago.
Passing a ban this year would "expunge that smear on the House of
Representatives," Goodlatte said.