Americans for Tax Reform, a non-partisan group that opposes all tax increases, recently said it is against the Leach online gambling bill because the law would reduce individual privacy and increase the costs for financial institutions.
HR 21, the bill Rep. James Leach, R-Iowa, proposed in January, would block all illegal Internet gambling by making it illegal for merchants to accept payments in the form of bank instruments from Americans. The Judiciary Committee passed the bill last week, although before passing it, the committee amended it to take out its carve-outs for the horse racing, dog racing, lottery and casino industries.
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"It's a bad idea to use the tax code to enforce any one set of moral beliefs."
- Damon Ansell ATR
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Damon Ansell, vice president of the ATR, said his group is so focused on privacy issues that it is one of the few conservative organizations that opposed the PATRIOT Act.
"Privacy is a big issue to us. It is a big issue to the tax payers' movement because privacy or the lack of protection has historically been used by the IRS to go after law-abiding tax payers," Ansell said.
The bill would require banks and credit card companies to spy on their customers to keep track of whether they are gambling on the Internet, said Grover Norquist, the president of ATR, in a press release.
"The books you buy at Amazon, the sites you visit, the people you chat with would all be subject to government-mandated snooping," he said. "Even worse, to add insult to injury, consumers would be forced to pay for this loss of privacy; banks would have to hire people to rummage through your purchases, document suspicious activity and report 'questionable' activity to the government. Certainly, the banks would pass that cost along to their credit card customers."
HR 21 would essentially deputize financial institutions to stop online gambling, Ansell said. In addition, he said, his group sees the bill as having potential to cause the equivalent of a tax increase, since it would impose a government-mandated cost on banks to add staff or technology to their operations to monitor possible Internet gambling.
"They would have to hire some 18-year-old to go look at records; that's going to cost," Ansell said. "It increases the regulatory burden and threatens the privacy rights of law-abiding citizens."
The group states that the nature of online gambling--that it can be operated from any country and offer services to anyone around the world--has forced the government to take "draconian" measures to control Internet betting and wagering.
Ansell said he did not want to comment on the bill proposed by Rep. John Conyers, R-Va., which would create a commission to study online gambling, beyond saying that such committees are often political tools for legislators who want to "dip toes in both waters." As for whether online gambling should be legalized in the United States, Ansell said it would not work to try to block an activity that largely takes place beyond U.S. borders.
"It's a bad idea to use the tax code to enforce any one set of moral beliefs," he said.