Chamber of Commerce Voices Opposition to S. 627

16 June 2004

The I-gaming industry has gained an ally in the fight against a federal U.S. bill that would stymie online gambling by banning banking transactions.

"The business community is starting to realize what bad precedent (S. 627) would set."
-Dan Walsh
Greenberg Traurig

The U.S. Chamber of Commerce expressed its concern over S. 627, the Unlawful Internet Gambling Funding Prohibition Act, in a letter sent to members of the U.S. Senate Tuesday.

The bill, which aims to cut off Internet casinos and sports books by banning the use of credit cards and other "instruments of banking" for online gaming transactions, was reported out of the Senate Banking Committee last year and could go before the full Senate soon (although senators from Nevada have put a "hold" on the bill, giving them more time to study it).

Greenberg Traurig's Dan Walsh, a D.C.-based lobbyist for the Interactive Gaming Council (IGC), said the Chamber's public opposition to the bill is a major step in the right direction for I-gaming.

"The U.S. Chamber is seen as one of the top 10 trade associations in terms of lobbying in Washington, and some put them in the top five," he said. "They are right there with the AARP, NRA, and the AFL-CIO."

The Chamber has come out in opposition to S. 627 because the policy aims to monitor the industry through financial institutions.

"This legislation would take unprecedented steps with respect to Internet regulation, financial services and individual privacy," the Chamber states in its letter, "and it is these to which we object."

The letter, signed by R. Bruce Josten, executive vice president of government affairs for the Chamber, also states that the Chamber is gravely concerned over the idea of "deputizing financial service institutions" to use them as "gambling police."

Walsh said the Chamber has always been opposed to the bill and that the recent World Trade Organization decision against the United States over its trade practices with Antigua probably spurred the group to write the letter. The WTO is preparing to issue a ruling that current U.S. policies regarding Internet gambling are in violation of the U.S.'s obligations under the General Agreement on Trade in Services the U.S. signed in the 1990s.

"The business community is starting to realize what bad precedent this bill would set," Walsh said. "It isn't so much that they are galvanized about the idea of prohibiting or regulating online game in either direction, but they see this as the beginning of the wrong way to start regulating anything that is on the Internet."

". . . The WTO decision made this a timely issue."
- Peter Lawson
Chamber of Commerce

Peter Lawson, the Chamber's director of congressional and public affairs, confirmed Walsh's WTO assessment.

"We have consistently had problems with versions of (S. 627), so our opposition shouldn't be much of a surprise," Lawson said. "But we felt the WTO decision made this a timely issue. Passing this bill now would be very bad timing. It would almost be the U.S. government thumbing its nose at the WTO."

Lawson added that the letter is meant to inform Senators that the Chamber is taking S. 627 very seriously.

"Anytime we send up a 'Key Vote' letter, that is a good indication of how important the issue is to us," Lawson said.

Groups like the IGC and the American Gaming Association have expressed concern over the bill for sometime now, with the AGA principally arguing that the bill doesn't treat the various gambling industries equally.

Wilson said the Chamber's main objective in writing the letter was to ensure that proper regulation is given to Internet issues.

"The focus of our concerns aren't about what forms of gambling should or shouldn't be allowed online," Wilson said. "We are more concerned over the precedents that this could set for e-commerce and the burden it would be placing on the financial services community."

The bill would block credit card transactions through a coded system. The only problem, said Lawson, is that some online gaming transactions, such as betting on horses, are legal in some states.

Walsh is hopeful that having such a high-profile institution denouncing the bill will generate much needed debate over how to approach online gaming legislatively.

"This will create a whole new set of questions," Walsh said, "questions that need to be asked and debated about this bill."

Click here to view the full text of the Chamber's letter.

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