Congress Drops Net Betting Provision

17 October 2001
The Financial Anti-Terrorism Act of 2001, a bill aiming to combat terrorism by cracking down on money laundering, was passed this morning in the U.S. House of Representatives with no provision regarding Internet gambling.

The Senate's version of the money laundering bill, which passed Thursday, did not include language pertaining to Internet gambling. The House, meanwhile, has been debating whether the provision should be included in its bill. The House bill was passed in the Financial Services Committee Thursday after a motion by Rep. Michael Castle, R-Del. to have the Internet gambling provision removed was defeated by a 37-25 vote.

Pressured by time constraints and needing to get on the same page as the Senate, however, the House removed the Internet gambling provision during markup this morning. The final House bill passed on a 412-vote.

The language for the House Net betting provision was based on Rep. James Leach's, R-Iowa, Unlawful Internet Gambling Funding Prohibition Act, which was introduced in February 2001. The bill would make it illegal for financial institutions to facilitate Internet gambling-related transactions.

Rep. John LaFalce, D-N.Y., introduced an Internet gambling funding bill in July--a version which, unlike Leach's bill, does not contain exemptions for some forms of gambling, such as pari-mutuel betting.

Both House bills remained dormant for months until Leach offered his as an amendment to the money laundering legislation.

Although, today's action is a victory for the Internet gambling industry, the prohibition effort maintains its supporters and shows signs of resurfacing. House Financial Services Committee Chairman Rep. Michael Oxley, R-Ohio, said today that he's still committed to getting a Net betting bill passed.

Reps. Leach and LaFalce, R-Iowa, both supported Oxley's commitment today during the hearing, as did Rep. Frank Wolf, R-Virg., a long time opponent of all forms of gambling.

Further, Rep. Bob Goodlatte, R-Virg., has indicated for months that he would like to reintroduce his Internet gambling prohibition bill, which makes the operation of Internet gambling services illegal as opposed to the facilitation of financial transactions.

Challenges for advocates of prohibition include skepticism from the Justice Department on enforceability and concerns expressed by financial institutions and Internet service providers that they're not equipped to police the Internet.

The only current federal law considered by the Justice Department to be applicable to Internet gambling is the Interstate Wire Act of 1961. The law is limited, though, because it only pertains to sports betting and drafted over three decades before Internet commerce came into existence.

An official with the House Financial Service's Committee confirmed with IGN that Oxley had planned to pursue Internet gambling prohibition, but would not indicate when the issue might be taken up again.