I-Gaming Section of Anti-Terrorism Bill Sparks Debate

3 October 2001
A prior sponsor of anti-Internet gambling legislation in U.S. Congress criticized the inclusion of provisions against online gambling in an anti-terrorism bill at a hearing of the House Financial Services Committee today.

During the hearing, a bipartisan bill was introduced to stem the flow of funds into terrorists’ bank accounts. “The Financial Anti-Terrorism Act of 2001,” as the bill is called, discusses Internet gambling in a section about fighting international money laundering.

The bill would prohibit any bank instrument—including credit cards, electronic fund transfers and checks—from being used to pay for Internet gambling. The penalty faced by gambling businesses that accept such modes of payment from U.S. citizens would be fines or imprisonment for up to five years.

Sponsored by Rep. Michael Oxley, R-Ohio, the committee’s chairman, and Rep. John LaFalce, D-NY, the bill includes language from an Internet gambling funding prohibition effort written by Rep. James Leach, R-Iowa, instead of a similar bill from LaFalce. Both introduced Internet gambling funding prohibition bills this session, although the two bills differ widely.

Using Leach's bill didn't seem to sit well with LaFalce, who spent several minutes denigrating it as being a hindrance to the terrorism bill.

LaFalce said the government needed to act "expeditiously" regarding terrorism, and that including Leach's Internet gambling funding prohibition would delay the bill's passage.

He also noted that there is an extremely active lobbying effort on Capitol Hill to scuttle Internet gambling legislation, and he expressed concern that the importance of the terrorism bill would be overshadowed by a battle with these forces.

Another objection LaFalce had to the Leach bill regarded the need to define what "illegal Internet gambling" activity is. It is not defined in the text of the bill.

The Bush administration today backed congressional efforts to make money-laundering laws stricter. The Senate Banking Committee will address the issue on Thursday, Reuters reported.

Despite LaFalce's concerns, representatives from both the Department of Justice and the FBI said that they support Leach's Internet gambling legislation.

The FBI has two cases pending involving Internet gambling as a conduit for money laundering, said Dennis Lormel, chief of the financial crimes section of the FBI's criminal investigation division. He told members of the committee that links have been found between Internet gambling and organized crime. Lormel did not mention a specific link between Internet gambling and terrorism.

"In principle, we support (the Internet gambling funding prohibition)," said Mary Lee Warren, the deputy assistant attorney general for the Justice Department’s criminal division.

Warren said the Justice Department had had reservations about the bill and offered the assistance of its staff to both Congress and the Treasury Department in putting the bill together.

IGN's calls today asking for comment from Oxley and LaFalce were not returned.

Click here to read H.R. 556, Leach's Unlawful Internet Gambling Funding Prohibition Act, which was introduced on Feb. 12, 2001.

You can compare it to LaFalce's bill, H.R .. 2579, also known as the Internet Gambling Payments Prohibition Act, which was introduced on July 20, 2001.