By Lawrence G. Walters, Esq.
As United States Lawmakers forge ahead with efforts to prohibit Internet gambling, the prospects of passing a bill aimed at prohibiting merchants from accepting financial transactions related to Internet gambling, have been seriously hindered while lawmakers wrestle with this unpredictable piece of legislation. Originally introduced by Rep. Jim Leach (R-Iowa) as a way to curtail Internet gambling, the Unlawful Internet Gambling Funding Prohibition Act, H.R. 21, sought to direct, within six months of enactment, federal functional regulators to prescribe regulations requiring any designated payment system to establish policies and procedures reasonably designed to identify and block restricted transactions while also preventing the acceptance of products or services in connection with a restricted gambling transaction. However, bickering between the House Judiciary and Financial Services committees resulted in competing versions of the Bill. The Bill was amended, by a vote of 16 to 15, by the House Judiciary Committee to remove exemptions for state lotteries and racing venues. Rep. Chris Cannon (R-Utah) said he offered the amendment because he was worried the Bill might allow some types of gambling in Utah, where all forms of gambling are illegal.
After the Judiciary Committee removed language that would have exempted lawful casinos and state lotteries, the Financial Services Committee, and Rep. Spencer Bachus (R-Ala.), introduced the Unlawful Internet Gambling Funding Prohibition Act, H.R. 2143, which restored Leach's exemptions for state lotteries and racing venues. The new piece of legislation removed any criminal or civil penalties for violators of the Act, which put the legislation outside the jurisdiction of the House Judiciary Committee. This new version still calls for a six month period to prescribe regulations and establish policies and procedures as set forth in H.R. 21, with enforcement by the Federal Trade Commission and Federal functional regulators. The Financial Services Committee approved the Bill in less than three minutes with no debate and no amendments. House leaders then chose to put the Bachus Bill, H.R. 2143, before the House instead of the amended Leach legislation. Citing concerns about organized crime, the addictive “crack cocaine” nature of online gambling, and a call to protect America’s children, the House overwhelmingly decided, by a vote of 319 to 104, to support the Bachus Bill. It passed with only one amendment, which was offered as assurance that the Act will not change any law relating to gambling within the United States.
H.R. 2143 now moves to the Senate, which has held hearings on similar proposals. Despite the overwhelming support in the House for Internet gambling restrictions, the outlook for similar legislation appears uncertain. It is unknown when or whether the Senate will consider H.R. 2143, or its own version, S. 627, which maintains the regulated gaming exemptions. Last year, the House approved sweeping Internet gambling restrictions only to see the legislation die in the Senate because of objections from Indian gambling interests. Chairman of the Financial Services Committee, Rep. Michael Oxley (R-Ohio), has privately said he hopes to add civil and criminal penalties to H.R. 2143 if and when the Senate passes its own version of an Internet anti-gambling bill, S. 627, sponsored by Sen. John Kyl (R-Ariz.). Like H.R. 21, the Kyl Bill provides for a six month period for Federal regulators to prescribe regulations, and establish policies and procedures, with enforcement by the Federal Trade Commission and Federal functional regulators. It also provides the same civil and criminal penalties as set forth in H.R. 21, while creating exemptions for regulated gaming. Both Bills are currently pending with the Senate Banking Committee.
Gambling Law UpdateTM@@
As United States Lawmakers forge ahead with efforts to prohibit Internet gambling, the prospects of passing a bill aimed at prohibiting merchants from accepting financial transactions related to Internet gambling, have been seriously hindered while lawmakers wrestle with this unpredictable piece of legislation. Originally introduced by Rep. Jim Leach (R-Iowa) as a way to curtail Internet gambling, the Unlawful Internet Gambling Funding Prohibition Act, H.R. 21, sought to direct, within six months of enactment, federal functional regulators to prescribe regulations requiring any designated payment system to establish policies and procedures reasonably designed to identify and block restricted transactions while also preventing the acceptance of products or services in connection with a restricted gambling transaction. However, bickering between the House Judiciary and Financial Services committees resulted in competing versions of the Bill. The Bill was amended, by a vote of 16 to 15, by the House Judiciary Committee to remove exemptions for state lotteries and racing venues. Rep. Chris Cannon (R-Utah) said he offered the amendment because he was worried the Bill might allow some types of gambling in Utah, where all forms of gambling are illegal.
After the Judiciary Committee removed language that would have exempted lawful casinos and state lotteries, the Financial Services Committee, and Rep. Spencer Bachus (R-Ala.), introduced the Unlawful Internet Gambling Funding Prohibition Act, H.R. 2143, which restored Leach's exemptions for state lotteries and racing venues. The new piece of legislation removed any criminal or civil penalties for violators of the Act, which put the legislation outside the jurisdiction of the House Judiciary Committee. This new version still calls for a six month period to prescribe regulations and establish policies and procedures as set forth in H.R. 21, with enforcement by the Federal Trade Commission and Federal functional regulators. The Financial Services Committee approved the Bill in less than three minutes with no debate and no amendments. House leaders then chose to put the Bachus Bill, H.R. 2143, before the House instead of the amended Leach legislation. Citing concerns about organized crime, the addictive “crack cocaine” nature of online gambling, and a call to protect America’s children, the House overwhelmingly decided, by a vote of 319 to 104, to support the Bachus Bill. It passed with only one amendment, which was offered as assurance that the Act will not change any law relating to gambling within the United States.
H.R. 2143 now moves to the Senate, which has held hearings on similar proposals. Despite the overwhelming support in the House for Internet gambling restrictions, the outlook for similar legislation appears uncertain. It is unknown when or whether the Senate will consider H.R. 2143, or its own version, S. 627, which maintains the regulated gaming exemptions. Last year, the House approved sweeping Internet gambling restrictions only to see the legislation die in the Senate because of objections from Indian gambling interests. Chairman of the Financial Services Committee, Rep. Michael Oxley (R-Ohio), has privately said he hopes to add civil and criminal penalties to H.R. 2143 if and when the Senate passes its own version of an Internet anti-gambling bill, S. 627, sponsored by Sen. John Kyl (R-Ariz.). Like H.R. 21, the Kyl Bill provides for a six month period for Federal regulators to prescribe regulations, and establish policies and procedures, with enforcement by the Federal Trade Commission and Federal functional regulators. It also provides the same civil and criminal penalties as set forth in H.R. 21, while creating exemptions for regulated gaming. Both Bills are currently pending with the Senate Banking Committee.
Gambling Law UpdateTM@@
