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.
