Technology Chairman Seeks to Update Gambling Law to Shut Down Billion-Dollar "Cybercasino" Industry
U.S. Senator Jon Kyl (R-Arizona) won a major victory this morning when the Senate endorsed his efforts to prohibit gambling on the Internet, agreeing 90-10 to add his legislation to a "must-pass" spending bill.
"More than a billion dollars will be gambled over the Internet this year," said Kyl, Chairman of the Senate Judiciary Subcommittee on Technology, Terrorism, and Government Information, and sponsor of The Internet Gambling Prohibition Act (S.474). "Internet gambling is unregulated, accessible by minors, addictive, subject to abuse for fraudulent purposes like money laundering, evasive of state gambling laws - and already illegal at the federal level in many cases."
"We need to update the law to help it keep up with technology and close the loopholes that have allowed this activity to flourish," Kyl added. "By passing this law, Congress will ensure the ability to prosecute the same gambling crimes tomorrow that are illegal today."
The federal government prohibited interstate gambling on sports "by phone or wire" in the 1961 Wire Act. The Kyl bill would update that law to include new forms of electronic transmission of bets, including computers and the Internet. It would also extend the prohibition to all forms of gambling, including the video card games popular in "cybercasinos."
"Our bill is supported by a broad bipartisan coalition," said Kyl, "including state, local, and federal law enforcement, amateur and professional sports organizations, pro-family groups, consumer protection groups and anti-gambling groups. From the Christian Coalition to Ralph Nader's Public Citizen, from the FBI's Louis Freeh to the attorneys general of all fifty states, supporters recognize the need to keep gambling off the Internet."
"Internet gambling exacerbates the problems associated with gambling," Kyl noted, "and poses a particular threat to children."
Dr. Howard Schaeffer of the Harvard Center for Addictive Studies predicts within ten years youth gambling will be more of a problem to society than drug use, while others have described electronic gaming, like the type being offered in the "virtual casinos" on the Internet, as the "hard-core crack cocaine of gambling."
"Children can access Internet gambling sites on the family computer, wager with Mom's credit card, click the mouse and bet the house," said Kyl. "College youth are especially at risk, with organized crime-sponsored gambling available on virtually every college campus, combined with greater access to computers and the Internet."
Approximately 140 Internet Web sites currently offer gambling, according to a recent ABC "Nightline" program, and over $600 million was illegally wagered online on sports alone last year, according to the Department of Justice.
In March, the U.S. Attorney of New York indicted 14 individuals for operating illegal sports gambling enterprises over the Internet, the first federal prosecution of this new crime.
The Kyl bill will likely be enforced by law enforcement identifying a Web site which provides illegal gambling and seeking a court order enjoining the activity, requiring the Internet Service Provider to "pull the plug." The ISP will have the opportunity to argue the technical feasibility and cost burden imposed by the enjoinder before the court.
The Kyl bill would not prohibit the online playing of rotisserie or "fantasy" sports leagues. Organizations would be able to provide services for the games for an administrative fee - those fees, however, could not be pooled and awarded as prizes.
The Senate added the Kyl bill as an amendment to the Commerce, State and Justice Appropriations bill. That funding legislation is expected to be approved later today.
Similar legislation has been introduced in the House of Representatives by Reps. Bob Goodlatte (R-Virginia) and Frank LoBiondo (D-New Jersey).