IS KYL NERVOUS ABOUT IGREA?

21 December 2007

Recently promoted US politician enters AG letter in Congressional Record


The recently promoted Senator Jon Kyl has been active against online gambling again this week, going after Barney Frank's HR 2046 IGREA before it hits the political floor, and presumably worried about the growing number of co-sponsors the IGREA has accumulated (now 45)

On Tuesday this week (Dec. 18) Kyl wrote the following letter to Congressional leaders, asking that it be read into the record, accompanied by a letter decrying IGREA signed by 45 Attorneys General:

Mr. President,

I would like my colleagues to be aware of an important letter signed by 45 State attorneys general expressing "grave concerns'' about Representative Barney Frank's Internet Gambling Regulation and Enforcement Act, H.R. 2046.

The State attorneys general note that the recently enacted Unlawful Internet Gambling Enforcement Act of 2006 has "effectively driven many illicit gambling operators from the American marketplace.'' The Frank bill "proposes to do the opposite, by replacing state regulations with a federal licensing program that would permit Internet gambling companies to do business with U.S. customers.''

A federal license would supersede any state enforcement action, because # 5387 in H.R. 2046 would grant an affirmative defense against any prosecution or enforcement action under any Federal or State law to any person who possesses a valid license and complies with the requirements of H.R. 2046.

This divestment of state gambling enforcement power is sweeping and unprecedented.

One final but very important point from the letter is the impact of the so-called "opt-out'' provisions. Specifically, the letter reads:

"The opt-outs may prove illusory. They will likely be challenged before the World Trade Organization. The World Trade Organization has already shown itself to be hostile to U.S. restrictions on Internet gambling . If it strikes down state opt-outs as unduly restrictive of trade, the way will be open to the greatest expansion of legalized gambling in American history and near total preemption of State laws restricting Internet gambling."

The Frank bill is unacceptable to the State attorneys general and it ought to be unacceptable to Members of Congress as well. I urge my colleagues to oppose the Frank bill or any similar proposals that would create a permissive Federal licensing scheme for Internet gambling .

I ask unanimous consent to have printed in the Record the letter from the National Association of Attorneys General.

There being no objection, the material was ordered to be printed in the
record.

The letter to which Senator Kyl refers comes from the National Association of Attorneys General and reads as follows:

Washington, DC, November 30, 2007.

Hon. Nancy Pelosi,
Speaker,
House of Representatives.

Hon. HARRY REID,
Majority Leader,
U.S. Senate.

Hon. JOHN BOEHNER,
Minority Leader,
House of Representatives.

Hon. MITCH MCCONNELL,
Minority Leader, U.S. Senate.

TO THE LEADERSHIP OF THE U.S. HOUSE OF REPRESENTATIVES AND SENATE:

We, the Attorneys General of our respective States, have grave concerns
about H.R. 2046, the ``Internet Gambling Regulation and Enforcement Act of
2007.'' We believe that the bill would undermine States' traditional powers
to make and enforce their own gambling laws.

On March 21, 2006, 49 NAAG members wrote to the leadership of Congress:

"We encourage the United States Congress to help combat the skirting of
state gambling regulations by enacting legislation which would address
Internet gambling , while at the same time ensuring that the authority to
set overall gambling regulations and policy remains where it has
traditionally been most effective: at the state level.''

Congress responded by enacting the Unlawful Internet Gambling Enforcement
Act of 2006 (UIGEA), which has effectively driven many illicit gambling
operators from the American marketplace.

But now, less than a year later, H.R. 2046 proposes to do the opposite,
by replacing state regulations with a federal licensing program that would
permit Internet gambling companies to do business with U.S. customers. The
Department of the Treasury would alone decide who would receive federal
licenses and whether the licensees were complying with their terms. This
would represent the first time in history that the federal government would
be responsible for issuing gambling licenses.

A federal license would supersede any state enforcement action, because
§5387 in H.R. 2046 would grant an affirmative defense against any
prosecution or enforcement action under any Federal or State law to any
person who possesses a valid license and complies with the requirements of
H.R. 2046. This divestment of state gambling enforcement power is sweeping
and unprecedented.

The bill would legalize Internet gambling in each State, unless the
Governor clearly specifies existing state restrictions barring Internet
gambling in whole or in part. On that basis, a State may ``opt out'' of
legalization for all Internet gambling or certain types of gambling .

However, the opt-out for types of gambling does not clearly preserve the
right of States to place conditions on legal types of gambling . Thus, for
example, if the State permits poker in licensed card rooms, but only between
10 a.m. and midnight, and the amount wagered cannot exceed $100 per day and
the participants must be 21 or older, the federal law might nevertheless
allow 18-year-olds in that State to wager much larger amounts on poker
around the clock.

Furthermore, the opt-outs may prove illusory. They will likely be
challenged before the World Trade Organization. The World Trade Organization
has already shown itself to be hostile to U.S. restrictions on Internet
gambling . If it strikes down state opt-outs as unduly restrictive of trade,
the way will be open to the greatest expansion of legalized gambling in
American history and near total preemption of State laws restricting
Internet gambling .

H.R. 2046 effectively nationalizes America's gambling laws on the
Internet , ``harmonizing'' the law for the benefit of foreign gambling
operations that were defying our laws for years, at least until UIGEA was
enacted. We therefore oppose this proposal, and any other proposal that
hinders the right of States to prohibit or regulate gambling by their
residents.

The letter is signed by 45 Attorneys General

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