A Second Round of Testimony in the House

21 June 2000
The U.S. House Banking Committee held a hearing Tuesday to discuss and debate the Internet Gambling Funding Prohibition Act. Like last week's Commerce Committee hearing on the Goodlatte Bill, many questions remain unanswered.

If you managed to catch Tuesday's hearing, you could have easily mistaken it for a rebroadcast of last week's meeting. The same issues--the bill's carve-outs, its enforceability and the applicability of current laws to online gambling--were debated and not resolved.

According to Rep. John LaFalce, R-N.Y., "If this is not a high priority, then prudence must make it a high priority...because we are now talking about going into every life of every teenager, of every human being in the United States of America."

Daniel Nestel, testifying on behalf of the NCAA, said, "[Students] can surf the Web in their school library, in a computer lab or in the privacy of their dorm room.... The emergence of Internet gambling now enables students to wager behind closed doors, in virtual anonymity."

Assistant Treasury Secretary Gregory Baer warned that the bill isn't comprehensive enough to cover new types of payments introduced in the future. "Any legislation restricting how people are going to get paid in the future is going to be very difficult,'' Baer said. He also criticized the bill's restricting of U.S. funding to countries that allow a "high level" of Internet gambling, suggesting that this would interfere with efforts to reduce poverty and grow economies in foreign countries. "We are seeing a revolution in payment in this country," he added.

Rep. Marge Roukema, R-N.J., meanwhile, raised the enforceability argument. "If you don't have enforcement," she asked, "how do you have legislation?"

Unlike the Kyl/Goodlatte bill, the Leach bill doesn't have the support of the racing industry. The Leach bill poses a serious threat to racing because it would prohibit individuals from using credit cards, debit cards, checks or other bank instruments to wager online, notwithstanding any exceptions that might appear in the Kyl/Goodlatte Internet bill. Alex Ingle, CFO of the New York Racing Association voiced racing's concern, saying "To frame federal legislation to protect from the unknown has the unfortunate residual effect today of crippling a major, legitimate, tax-paying industry."

Ingle also criticized the bill for not distinguishing between regulating businesses that use Internet technology and unregulated offshore gaming. The Clinton administration was represented at the hearing by Deputy Assistant Attorney General Kevin DiGregory and Assistant Treasury Secretary Gregory Baer, both of whom said the Clinton White House strongly opposes both the Internet Gambling Funding Prohibition Act and the Kyl-Goodlatte bill.

The Internet Gambling Funding Prohibition Act, HR 4419, was proposed in May by representatives James Leach, John LaFalce and Richard Baker as companion legislation to Goodlatte's Internet Gambling Prohibition Act. The funding bill prohibits the use of credit cards, debit cards, checks, bank drafts or electronic transfers to place bets, collect winnings or conduct gambling activities on the Internet.

IGN will publish further details, including copies of submitted written testimony, tomorrow.