Goodlatte Introduces Anti-Gaming Bil

1 November 2001
A Legislative History
of the Prohibition Movement on
Capitol Hill

The recent movement in Washington to prohibit Internet gambling is the latest of several.

Click here to view a timeline of prohibition bills introduced in the past six years.

Bob Goodlatte, R-Va., is once again at the forefront of legislative efforts to permanently ban gambling on the Internet.

The prohibition of online gaming has long been a rallying cry for Goodlatte, and his latest effort is similar to a move he made last year.

Today Goodlatte introduced the Combating Illegal Gambling Reform and Modernization Act. The bill is aimed at updating the 1961 Federal Wire Act to include Internet gambling as unlawful. Goodlatte hopes to update the law to get rid of gray areas caused by the Internet and other modern technology.

"Technology has allowed for new types of electronic gambling, including interactive games on the Internet such as poker and blackjack, which may not clearly be included within the types of gambling currently made illegal by the Wire Act," he said.

In addition to bringing the Wire Act up to modern-day standards, Goodlatte's bill would ban gambling businesses from accepting certain forms of payment including credit cards, checks and Internet transfers for illegal gambling transactions.

In an outline of the bill, Goodlatte reiterated his argument against online gaming.

"Gambling on the Internet has exploded into a lucrative business that sucks billions of dollars out of the U.S. economy each year and costs tens of thousands of jobs," he said. "These illegal, off-shore gambling Web sites are unlicensed, untaxed and unregulated. Illegal gambling sites evade existing anti-gambling laws by operating offshore, providing a nearly undetectable harbor for criminal enterprises."

Even if Goodlatte's bill is passed, it is unclear how effective it will be. With many sites operated in foreign jurisdictions, it would be hard for the U.S. Justice Department to levy any actions against them.

Goodlatte said he fast-tracked the updated bill after the FBI and other federal agencies testified that Internet gambling can be used by terrorists to launder money.

The introduction of the bill is the latest chapter in a long battle against online gaming waged by the congressman.

In September 1997 Goodlatte introduced the House version of the Internet Gambling Prohibition Act after the Senate passed it on a 90-10 vote. The House bill was killed after the legislature closed without voting on it.

Two years later, in October 1999, he reintroduced his bill only to see it fail again. He had put the bill up for a vote without having it debated, meaning that it needed 66 percent of the vote to pass. It was 24 votes short of passing.

Goodlatte then turned to the Federal Wire Act to seek an expansion of it to include the Internet. The new bill would let states continue to regulate gambling within their borders. It also would allow federal, state, local and tribal law enforcement officials to seek injunctions to prevent and restrain violations of the act and to obtain cooperation in the fight against illegal gambling.

In the wake of the Sept. 11 terrorists attacks and the recent anti-money laundering legislation that links terrorism with the online gaming industry, Goodlatte may be able to rally more support for his bill this time around.

"Illegal online gambling doesn't just hurt gamblers and their families, it hurts the economy by draining dollars from the United States and serves as a vehicle for money laundering," Goodlatte said. "It is time to shine a bright light on these illegal sites and bring a quick end to illegal gambling on the Internet."

Highlights of the Combating Illegal Gambling Reform and Modernization Act

The bill:

  • Updates the Wire Act to Cover All Forms of Gambling and New Technologies

    Under current federal law, it is unclear that using the Internet to operate a gambling business is illegal. The closest useful statute is the Wire Act that prohibits gambling over telephone wires. However, because the Internet does not always travel over telephone wires, the Wire Act, which was written in 1961, has become outdated--it is not clear that it applies to the Internet at all. Technology has allowed for new types of electronic gambling, including interactive games on the Internet such as poker and blackjack, which may not clearly be included within the types of gambling currently made illegal by the Wire Act.

    The bill amends the Wire Act to make it clear that its prohibitions include Internet gambling by bringing the current prohibition against wireline interstate gambling up to speed with the development of new technology and expanding the existing prohibition to include all bets or wagers, not merely bets or wagers on sporting events or contests.

  • Increases Penalty

    The maximum prison term for a violation of this Act is increased from two years to five years.

  • Defines Gambling

    The bill defines a "bet or wager" to include wagering on sporting events, lotteries and games of chance. A "bet or wager" does not include securities and commodities transactions, indemnity and insurance contracts and fantasy sports leagues.

  • Prohibits Interstate Gambling

    The bill prohibits the interstate transmission of bets or wagers and prohibits the transmission of bets or wagers between a state or tribe and a foreign country, regardless of the legality of such betting or wagering in the foreign country.

  • Respects States' Rights

    The regulation of intrastate gambling is within the jurisdiction of the states, so the bill leaves the regulation of wholly intrastate betting or wagering to the states with tight controls to be sure that it does not extend beyond their borders or to minors.

    For this provision to be applicable, at the time of transmission, the bettor, the gambling business and any facility processing the bets or wagers must be physically located in the same State and the State must permit such bets or wagers.

    This provision is consistent with the current Wire Act which is not applicable to intrastate transmissions over a wire communication facility of bets or wagers.

  • Prohibits Credit Card Use for Illegal Gambling

    The bill prohibits a gambling business from accepting certain forms of non-cash payment, including credit cards and electronic transfers, for the transmission of bets and wagers in violation of this Act.

    This provision provides an enforcement mechanism to address the situation where the gambling business is located offshore but the gambling business used bank accounts in the United States.

  • Provides Additional Remedies for Illegal Gambling

    The bill provides an additional tool to fight illegal gambling by allowing Federal, State, local and tribal law enforcement to seek injunctions against any party to prevent and restrain violations of the Act. No party will be civilly or criminally liable for complying with such an order. This provision does not apply to blocking by an interactive computer service.

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