Editorial: Give the Panic Button a Rest

11 November 2002

Always a Bride's Maid

Believe it or not, Congress has at times found more important issues to deal with than Internet gambling. In each of the past five years, the Leaches Kyls and Goodlattes of the U.S. legislature have been pushed aside in the closing months of legislative sessions while Congress concentrated on more serious matters.

Here's a brief look at the events that have helped keep I-gaming off the table:


Sen. Jon Kyl is successful (by a 90-10 vote) for the first time in getting his online gambling bill passed in the Senate. The bill is moved to the House where it has a decent chance of passing, but Kyl ultimately plays second fiddle to a cigar and a blue dress as Congress finishes the session working around the clock on resolving the debate over whether it should oust then President Bill Clinton for taking part in immoral extracurricular activities.


The world is going to end at the strike of midnight on Jan. 1, so nothing else really matters.


The House votes on the Goodlatte bill under a suspension of the rules, but it fails to pass. Goodlatte's efforts to bring it back for another vote are probably a long shot to begin with, but he's left hanging like a chad in November, when Congress shifts its attention almost entirely to resolving the Gore/Bush election fiasco.


Congress rushes to pass anti-terrorism legislation in response to the Sept. 11 attacks. A version of the Leach bill is added to anti-money laundering legislation, but is yanked in an effort to move the bill quickly (despite repeated attempts by Reps. Leach and Oxley to convince their colleagues that the words "terrorism" and "Internet gambling" are interchangeable).


The House passes the Leach bill in October, but the legislation stalls in the Senate. Congress is preoccupied with preparing for a war against Iraq and I-gaming is pushed way down on its list of priorities. The legislature is due to reconvene for an abbreviated lame-duck session with little time to address issues that aren't considered vital.

Many in the Interactive gaming industry found themselves hitting the panic button Wednesday over the midterm election results in the United States.

On the surface, the cause for concern was merited. After all, the Republican party, which hasn't looked favorably upon online gambling, had a banner day at the voting booths.

What was a slim majority by the Democrats (one seat) in the Senate turned into a four-seat advantage for the GOP. And to add insult to injury for the Democrats, instead of trimming the Republicans' six-seat edge in the House of Representatives, they saw that edge widen to 23 seats.

To make matters worse for I-gaming, its friends struggled in elections while many of its enemies were reelected. Nowhere was this more glaring than in Iowa, where GOP member James Leach won to gain another two-year term. For the past five years, Leach has made it a goal to prohibit Internet gambling in the United States.

Leach's election-day victory came despite the redistricting of lines that severed the veteran congressman from his solid Republican base of Davenport and replaced it with a new district that has 20,000 more registered Democrats than it has Republicans.

Leach's I-gaming prohibition bill passed in the House last month and awaits action in the Senate Banking Committee. The legislation aims to cut off Internet gambling sites at the knees by banning the use of credit cards and other "instruments of banking," including wire transfers and electronic checks, for gambling-related transactions.

After passing through the House under a suspension of the rules, the bill was sent to the Senate where Tim Johnson's committee took jurisdiction over it. It's unlikely that the legislation will go before the full Senate.

Johnson has introduced his own I-gaming bill, which would prohibit I-gaming by expanding the Federal Wire Act of 1961. It is believed that the Senate Banking Committee would consider Johnson's bill before Leach's. Johnson's bill, which doesn't include exemptions for horse racing and other interests (while Leach's bill does), faces many challenges in getting passed in both chambers.

Having Johnson in its "corner" certainly is favorable for I-gaming, but there's one hitch: He may be out of a job soon.

Johnson was up for reelection this year in the often overlooked state of South Dakota. He won his bid, at least for now, edging John Thune by a mere 528 votes, but a recount has been ordered for Nov. 25.

So from a U.S. regulatory perspective, the outlook was bleak for the I-gaming industry. Online casino and sports book operators were rightfully worried about what will happen in the world's most lucrative gaming market.

Although early post-election results aren't exactly what the industry ordered, it isn't all gloom and doom on Capitol Hill.

With a sluggish economy and looming military action against Iraq, passing a prohibition bill aimed at the online gaming industry is not considered a high priority in Washington. The GOP now has the advantage of creating a legislative mandate to guide it until the Presidential elections of 2004.

If, as expected, the Leach Bill is not taken up in committee during the upcoming lame-duck session of Congress (before the new members are sworn in after the new year), the bill will have to be re-introduced in the House when the new session commences.

As key committee chairmanships are determined, the interactive gaming industry will be busy trying to find new allies in Congress. With more and more land-based operators venturing online, any state with gaming interests could see their reps come to the forefront for I-gaming-friendly legislation.

No one wants a downturn in the economy, and only a few on the lunatic fringe really crave war. In an odd irony though, if Congress can keep busy enough looking for solutions to bigger problems, it's a safe assumption that online game bills will remain on the fringe of the radar screen for legislatures.

If the GOP mandate returns confidence to consumers and increases spending throughout the economy, and military action against Iraq is swift and concise, then it might be time to hit the panic button, but I'm not betting on it.

Nobody knows where Kevin Smith came from. He simply showed up one day and started writing articles for IGN. We liked him, so we decided to keep him. We think you'll like him too. Kevin can be reached at kevin@igamingnews.com.