Department of Justice Letter

17 July 2000
July 15, 2000

U.S. Department of Justice
Office of Legislative Affairs
Office of the Assistant Attorney General
Washington, D.C. 20530

The Honorable Dennis Hastert
U.S. House of Representatives
Washington, D.C. 20515

Dear Mr. Speaker:

The Department understands that H.R. 3125, the "Internet Gambling Prohibition Act of 2000," may be considered on the House floor as early as Monday, July 17, 2000. We would like to take this opportunity once again to present our views on the bill.

The Department strongly opposes enactment of this bill, which appears designed to protect certain forms of internet gambling that currently are illegal, while potentially opening up the floodgates for the other forms of illegal gambling.

We are especially troubled by the exemptions included in the bill for pari-mutuel wagering on activities such as horse races, dog races, and jai alai. Essentially, the exemptions could be read to make legal on the Internet types of pari-mutuel wagering that are not legal in analogous circumstances in the physical world. When Section 1084 of Title 18, United States Code, was enacted in 1961, it was specifically designed to prohibit pari-mutuel wagering over wire communications facilities, such as telephone lines. The Department opposes the effort to make it legal to conduct this type of wagering over certain types of communications facilities (i.e., the Internet) and notes that these exemptions could have the effect of allowing individuals to bet on dog and horse racing from their homes, giving children and other vulnerable populations unsupervised, unlimited access to such gambling activities. There is no policy justification for such an exemption.

The Department has received a copy of language which we believe constitutes the amendment intended to resolve concerns over exemptions for horse racing, dog racing and jai alai. It is our position that this amendment may be even more problematic than the current version of the bill, which provided some protections for States in which the bet originates and protections for the host tracks. The amendment eliminates the requirements that wagers on horse racing, dog racing and jai alai be "initiated from a State in which betting or wagering on that same type of live horse or dog racing or jai alai is lawful and received in a State in which such betting is lawful." Further, it eliminates the requirement that wagering on horse racing be in accordance with the Interstate Horse Racing Act, that wagering on dog racing and jai alai be subject to regulatory consent agreements comparable to those in the Interstate Horse Racing Act, and that wagering on horse racing, dog racing, and jai alai be in accordance with the requirements, if any, of the appropriate legislative or regulatory body of the State from which the bet originates. Essentially, this amendment can be read so that these types of pari-mutuel wagering only need to be regulated in the state in which the wager is received. This would allow a business to be licensed and operated in one state, but be able to take wagers from people in any other state, regardless of whether the state in which the bettor is located has authorized such activity.

A second concern is that H.R. 3125 is not technology-neutral and applies only to Internet gambling. Legislation that is tied to a particular technology may quickly become obsolete and require further amendment. As a result, we believe it prudent to identify the conduct that Congress is trying to prohibit and then to prohibit that conduct in technology-neutral terms. The Department believes that legislation addressing conduct over the Internet should treat physical activity and cyberactivity in the same way. If an activity is prohibited in the physical world but not on the Internet, then the Internet becomes a safe haven for that criminal activity. Similarly, conduct that is not a Federal crime in the physical world should not be subject to Federal criminal sanction when committed in cyberspace. This can be most efficiently accomplished by amending existing gambling laws, as opposed to creating a new technology-specific statutory scheme.

On a related point, we are concerned that, if enacted, proposed section 1085 will substantially overlap and be inconsistent with existing Federal gambling laws. As section 1084 and other federal gambling laws already apply to Internet gambling, we continue to urge Congress to address internet gambling issues by amending existing gambling laws, rather than creating new laws that specifically govern the internet. Indeed, the Department of Justice believes that amendments to existing section 1084 could achieve the objectives of H.R. 3125, while ensuring that the same laws apply to gambling businesses, whether they operate over the Internet, the telephone, or some other instrumentality of interstate commerce. In that connection, we have prepared a draft bill that amends existing section 1084 and related statutes and avoids the problems discussed above. We would be pleased to supply you with a copy of that proposal.

Finally, we are troubled that this bill could interfere with the regulatory scheme set forth in the Indian Gaming Regulatory Act (IGRA). We believe that any Internet gambling legislation should make it clear that it is not intended to repeal or amend the rights or privileges secured by the Tribes under IGRA.

Again, thank you for the opportunity to comment on this legislation. Please do not hesitate to call upon us if we may be of additional assistance. The Office of Management and Budget has advised us that there is no objection from the standpoint of the Administration's program to the submission of this report, and that enactment of H.R. 3125 would not be in accord with the program of the President.


Robert Raben
Assistant Attorney General