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- Jun 30, 1998
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U.S. Congress and Internet Gambling: More Tilting at Windmills
VANCOUVER, British Columbia, Jan. 12, 2006 The new year will bring more of the same as opponents of Internet gambling in the U.S. Congress prepare another round in their quixotic campaign to block this growing industry. Conjuring all the scare terminology of previous attempts, Rep. Jim Leach (Republican-Iowa) introduced in November the Unlawful Internet Gambling Enforcement Act of 2005. No action on the bill, H.R. 4411, is expected until later this year, which is the final session of the 109th Congress.
Once again, as he put it, Leach is trying to cut the money flow from gamblers to Internet gambling sites. His bill would prohibit the use of credit cards and any other instrument of U.S. financial institutions from being used in Internet gambling transactions.
Rep. Leach and his allies have already substantially achieved that goal, without benefit of new laws, said Rick Smith, executive director of the Interactive Gaming Council. Whether because of pressure from federal and state authorities or because of their own initiatives, most major U.S. financial institutions block Internet gambling transactions. For several years, its been rare to find a U.S. credit card that can be used to deposit funds at an online casino.
That proves the futility of the Leach effort. The Congressman told his colleagues that Americans will bet $5.9 billion on Internet gambling this year, while the chief executive of a major online casino and sports betting firm estimates that 12.5 million Americans wager online. Clearly, if all these people are betting all this money, they have found other ways to deposit funds into their accounts at Internet gambling sites. If that many Americans enjoy this activity, nothing that Congress can do will stop them.
Leach told Congress that he was working with Sen. Jon Kyl (Republican-Arizona) on his crusade. Kyl, the most persistent of the Congressional foes of Internet gambling, tried and failed as recently as September to get similar legislation approved. But apparently the two men have labored on legislative language that would increase the odds of passage. For example, H.R. 4411 states that it would not apply to the Interstate Horseracing Act. As amended in 2000, that act permits telephone and Internet wagering on horse races, with certain restrictions. The bill also contains carve-outs, or exemptions, for fantasy sports leagues and for tribal gaming.
It is senseless that these legislators and their staffs are wasting Congress time, trying to develop prohibitory bills that will satisfy various vested interest groups, said Keith Furlong, deputy director of the IGC. Legislation to regulate is needed for the Internet gambling industry, but not these futile stabs at prohibition. What is needed is legislation that would facilitate the government licensing and strict regulation of online gambling.
While Leach and Kyl waste years tilting at windmills, the number of Americans gambling online grows every year. The explosive success of Internet poker has demonstrated the appeal of this form of gambling. Some of the leading poker sites get most of their players from the U.S.
If these politicians really cared about gambling addiction and about minors gambling online, they would work on ways to regulate this form of gambling, just as real-world gambling is regulated. Instead of unsubstantiated spin asserting that online gambling is a hotbed for money laundering and terrorist financing, the purported concerns of these politicians would be better served if they would work with responsible operators including the regulated Las Vegas casino firms that would like to compete in this segment to mitigate social problems and prevent access by minors.
As Nigel Payne, the chief executive of Sportingbet.com, said on a November segment of 60 Minutes titled I-Gaming: Illegal and Thriving, If you regulate it, you control it. If you regulate it, you set limits. You also tax it. Payne told 60 Minutes that U.S. states were missing out on millions of dollars in tax revenue that online gambling could generate. The economic loss is compounded by the employment opportunities that the U.S. forfeits.
The shortsighted and unrealistic stance of the U.S. government fails to provide U.S. consumers the same protections they get in real-world casinos, denies millions of dollars of business opportunity to U.S. casino firms, and keeps Wall Street companies from participating in an expanding industry. In recent years, when several Internet gambling companies listed their shares on the London Stock Exchange, U.S. investment bankers were unable to compete for that lucrative underwriting business.
The last section of H.R. 4411 requires the Secretary of the Treasury to report to Congress annually on any deliberations between the United States and other countries on issues relating to Internet gambling. If this bill becomes law, the report on deliberations with Britain will be interesting reading. Britains new Gambling Commission is beginning consultations on how it will license and regulate all forms of gambling, including what the British call remote gambling. The new regulations will take effect in 2007, with applications for remote gambling licenses expected to be accepted later this year. The British government has said that sites it licenses will be free to take bets from the U.S.
What a contrast! Smith said. As the U.S. Congress prepares to waste another year and taxpayers money in trying to patch together a politically acceptable, prohibitory bill that in the end will do nothing to stop Internet gambling, the British government is studying the best way to regulate this form of gambling to protect vulnerable citizens and to ensure that the government benefits from the growth of this industry.
This may be the last year for the annual charade in Congress over Internet gambling prohibition. Last month, in a special report on Forbes.com called Sneak Peek 2006, Matthew Miller predicted: Internet gambling will be regulated by 2007 at latest. Lawmakers will be forced to take morality out of the online-gambling debate and license, regulate and tax the industry -- as they have with vices like land-based gambling, alcohol, cigarettes and pornography.
About the IGC
Formed in 1996, the IGC is the leading trade association for the international interactive gambling industry with its membership operating or supplying services to most of the reputable interactive sites on the World Wide Web. Based in Vancouver, Canada, the IGC champions fair and honest interactive gambling environments. To help parents protect their children, IGC members are encouraged to participate in the self-labeling system of the Internet Content Rating Association. The IGC has developed a Code of Conduct for members, and a program called Helping Hand to assist problem gamblers.
CONTACTS:
Rick Smith, Executive Director, executive.director@igcouncil.org Phone: 1-604-732-3833
Keith Furlong, Deputy Director, keith.furlong@igcouncil.org | Mobile: 1-732-687-0880
VANCOUVER, British Columbia, Jan. 12, 2006 The new year will bring more of the same as opponents of Internet gambling in the U.S. Congress prepare another round in their quixotic campaign to block this growing industry. Conjuring all the scare terminology of previous attempts, Rep. Jim Leach (Republican-Iowa) introduced in November the Unlawful Internet Gambling Enforcement Act of 2005. No action on the bill, H.R. 4411, is expected until later this year, which is the final session of the 109th Congress.
Once again, as he put it, Leach is trying to cut the money flow from gamblers to Internet gambling sites. His bill would prohibit the use of credit cards and any other instrument of U.S. financial institutions from being used in Internet gambling transactions.
Rep. Leach and his allies have already substantially achieved that goal, without benefit of new laws, said Rick Smith, executive director of the Interactive Gaming Council. Whether because of pressure from federal and state authorities or because of their own initiatives, most major U.S. financial institutions block Internet gambling transactions. For several years, its been rare to find a U.S. credit card that can be used to deposit funds at an online casino.
That proves the futility of the Leach effort. The Congressman told his colleagues that Americans will bet $5.9 billion on Internet gambling this year, while the chief executive of a major online casino and sports betting firm estimates that 12.5 million Americans wager online. Clearly, if all these people are betting all this money, they have found other ways to deposit funds into their accounts at Internet gambling sites. If that many Americans enjoy this activity, nothing that Congress can do will stop them.
Leach told Congress that he was working with Sen. Jon Kyl (Republican-Arizona) on his crusade. Kyl, the most persistent of the Congressional foes of Internet gambling, tried and failed as recently as September to get similar legislation approved. But apparently the two men have labored on legislative language that would increase the odds of passage. For example, H.R. 4411 states that it would not apply to the Interstate Horseracing Act. As amended in 2000, that act permits telephone and Internet wagering on horse races, with certain restrictions. The bill also contains carve-outs, or exemptions, for fantasy sports leagues and for tribal gaming.
It is senseless that these legislators and their staffs are wasting Congress time, trying to develop prohibitory bills that will satisfy various vested interest groups, said Keith Furlong, deputy director of the IGC. Legislation to regulate is needed for the Internet gambling industry, but not these futile stabs at prohibition. What is needed is legislation that would facilitate the government licensing and strict regulation of online gambling.
While Leach and Kyl waste years tilting at windmills, the number of Americans gambling online grows every year. The explosive success of Internet poker has demonstrated the appeal of this form of gambling. Some of the leading poker sites get most of their players from the U.S.
If these politicians really cared about gambling addiction and about minors gambling online, they would work on ways to regulate this form of gambling, just as real-world gambling is regulated. Instead of unsubstantiated spin asserting that online gambling is a hotbed for money laundering and terrorist financing, the purported concerns of these politicians would be better served if they would work with responsible operators including the regulated Las Vegas casino firms that would like to compete in this segment to mitigate social problems and prevent access by minors.
As Nigel Payne, the chief executive of Sportingbet.com, said on a November segment of 60 Minutes titled I-Gaming: Illegal and Thriving, If you regulate it, you control it. If you regulate it, you set limits. You also tax it. Payne told 60 Minutes that U.S. states were missing out on millions of dollars in tax revenue that online gambling could generate. The economic loss is compounded by the employment opportunities that the U.S. forfeits.
The shortsighted and unrealistic stance of the U.S. government fails to provide U.S. consumers the same protections they get in real-world casinos, denies millions of dollars of business opportunity to U.S. casino firms, and keeps Wall Street companies from participating in an expanding industry. In recent years, when several Internet gambling companies listed their shares on the London Stock Exchange, U.S. investment bankers were unable to compete for that lucrative underwriting business.
The last section of H.R. 4411 requires the Secretary of the Treasury to report to Congress annually on any deliberations between the United States and other countries on issues relating to Internet gambling. If this bill becomes law, the report on deliberations with Britain will be interesting reading. Britains new Gambling Commission is beginning consultations on how it will license and regulate all forms of gambling, including what the British call remote gambling. The new regulations will take effect in 2007, with applications for remote gambling licenses expected to be accepted later this year. The British government has said that sites it licenses will be free to take bets from the U.S.
What a contrast! Smith said. As the U.S. Congress prepares to waste another year and taxpayers money in trying to patch together a politically acceptable, prohibitory bill that in the end will do nothing to stop Internet gambling, the British government is studying the best way to regulate this form of gambling to protect vulnerable citizens and to ensure that the government benefits from the growth of this industry.
This may be the last year for the annual charade in Congress over Internet gambling prohibition. Last month, in a special report on Forbes.com called Sneak Peek 2006, Matthew Miller predicted: Internet gambling will be regulated by 2007 at latest. Lawmakers will be forced to take morality out of the online-gambling debate and license, regulate and tax the industry -- as they have with vices like land-based gambling, alcohol, cigarettes and pornography.
About the IGC
Formed in 1996, the IGC is the leading trade association for the international interactive gambling industry with its membership operating or supplying services to most of the reputable interactive sites on the World Wide Web. Based in Vancouver, Canada, the IGC champions fair and honest interactive gambling environments. To help parents protect their children, IGC members are encouraged to participate in the self-labeling system of the Internet Content Rating Association. The IGC has developed a Code of Conduct for members, and a program called Helping Hand to assist problem gamblers.
CONTACTS:
Rick Smith, Executive Director, executive.director@igcouncil.org Phone: 1-604-732-3833
Keith Furlong, Deputy Director, keith.furlong@igcouncil.org | Mobile: 1-732-687-0880
