Anti-Gaming Legislation: Lost in Limbo

After legislation has been introduced, it passes through many committees before being presented to the House for formal consideration.

Recently, the House Committee on the Judiciary, Subcommittee on Crime, Terrorism, and Homeland Security held a hearing to discuss Rep. Goodlatte's Internet Gambling Prohibition Act (H.R. 4777), legislation that failed in 1997, 1999, and 2002.

H.R. 4777 would amend the Wire Act, modifying the words to include Internet games that are predominantly subject to chance. Not only does it prohibit those games, it also prohibits linking to sites where online gambling takes place. It also prohibits gambling businesses from accepting credit card and electronic transfer deposits, and would require financial institutions to deny customer payments to Internet gaming sites.

Sam Vallandingham, vice president of the First State Bank of Barboursville, West Virginia, said, "As a representative, I urge you to reject proposals to use the banking system to restrict Internet gambling unless there is a reasonable chance the measures will be effective and will not add to the tremendous regulatory burden of our nation's financial institutions."

Vallandingham is more concerned about terrorism and money laundering: "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."

"This bill will create a nightmare for financial institutions and enforcement efforts will easily be thwarted," said Rep. Robert C. Scott (D-Va.).

The proposed legislation also puts the onus on gambling businesses to prohibit transactions from U.S. financial institutions; however, those gambling businesses are offshore and beyond the jurisdiction and rules of the U.S. In acknowledging this fact, Rep. Scott suggested regulating and taxing the industry, in order to make the activity safer for U.S. citizens. "I believe we should regulate Internet gambling, but we should do so effectively. These companies would be subject to U.S. law and could be taxed," said Scott.

Rep. John Conyers, Jr. (D-Mich.) reiterated what he has been saying for years about regulation and taxation. He challenged Rep. Goodlatte and Bruce Ohr, the chief of the Organized Crime and Racketeering Section of the U.S. Department of Justice, pointing out that the bill has a myriad of carve-outs, including the horse racing and state lottery industries.

"We're picking and choosing which gambling act to sanction and which won't be sanctioned," Congressman Conyers said. "Let's be real, my friends. If we really want to control gambling, we must regulate it." How nice it is to hear a voice of reason.

Ohr stated that the Justice Department generally supported the bill, but was seriously concerned that carve-outs might weaken current law. Ohr said, "The Department questions why, under the provisions of H.R. 4777, one industry will be able to accept interstate wagers while other industries that are also regulated by the states cannot."

Not particularly welcomed by the subcommittee, the proposed legislation was met with resistance and confusion. When the voices of reason brought up regulation as opposed to deputizing poor bankers, no one had a compelling response. The bill was not voted on, no future date was scheduled, and everyone went home.

As expected, the day following the debate, online gaming shares skyrocketed. PartyPoker shares went up 14 percent while PacificPoker shares went up 12 percent.

A few days later, Rep. Chris Cannon spoke out against Goodlatte's bill, contending that it could lead to legalize some online gambling in Utah. "While I am an ardent opponent of gambling, one of the things I don't want to see is an opportunity for gambling because we pre-empt state law," the Utah Republican said. "I don't want Utah to get bombarded with gambling if it becomes legal." Utah and Hawaii are the only states that outlaw all forms of gambling.

Although there are some vocal members who want to regulate online poker, we must remember that the bill is co-sponsored by more than a hundred followers who wanted to distance themselves from the Abramoff debacle. We are by no means on safe ground until the bill is either defeated or another congressional session ends.

Those in favor of and those opposed to the bill are lining up with arguments in hand. Please make your voices heard by going to www.CardPlayer.com/link/savepoker, where you can join the efforts of citizens all over the United States by signing a letter that will be sent to your congressmen. Long live online poker.