Testimony: Robert Goodlatte

Thank you, Mr. Chairman, for agreeing to hold this hearing. I very much appreciate your willingness to have this forum for a discussion and a dialogue on a topic that is of profound importance to the American people and to American ideals: the growing need for legislation to address the problem of illegal Internet gambling. I would also like to thank Senator Kyl for his leadership in the Senate on this issue. I look forward to continuing to work with him on this very important matter.

The Internet is a revolutionary tool that dramatically affects the way we communicate, conduct business, and access information. As it knows no boundaries, the Internet is accessed by folks in rural and urban areas alike, in large countries as well as small. The Internet is currently expanding by leaps and bounds; however, it has not yet come close to reaching its true potential as a medium for commerce and communication.

One of the main reasons that the Internet has not reached this potential is that many folks view it as a wild frontier, with no safeguards to protect children and very few legal protections to prevent online criminal activity. The ability of the World Wide Web to penetrate every home and community across the globe has both positive and negative implications--while it can be an invaluable source of information and means of communication, it can also override community values and standards, subjecting them to whatever may or may not be found online. In short, the Internet is a challenge to the sovereignty of civilized communities, States, and nations to decide what is appropriate and decent behavior.

Gambling is an excellent example of this situation. It is currently illegal in the United States unless regulated by the States. With the development of the Internet, however, prohibitions and regulations governing gambling have been turned on their head. No longer do people have to leave the comfort of their homes and make the affirmative decision to travel to a casino--they can access the casino from their living rooms.

The negative consequences of online gambling can be as detrimental to the families and communities of addictive gamblers as if a bricks and mortar casino was built right next door. Online gambling can result in bankruptcy, despair, and moral decline just as with traditional forms of gambling, the costs of which must ultimately be borne by society.

I have long been a champion of the Internet and an advocate of limited government regulation of this new medium. However, that does not mean that the Internet should be a regulatory free zone or that our existing laws should not apply to the Internet. I think we can all agree that it would be very bad public policy to allow offline activity deemed criminal by states to be freely committed online and to go unpunished simply because we are reluctant to apply our laws to the Internet.

Current law already prohibits gambling over telephone wires. However, because the Internet does not always travel over telephone wires, these laws, which were written before the invention of the World Wide Web, have become outdated. My legislation simply clarifies the state of the law by bringing the current prohibition against wireline interstate gambling up to speed with the development of new technology.

The 104th Congress created the National Gambling Impact Study Commission and charged it with conducting a comprehensive legal and factual study of gambling, including an assessment of the interstate and international effects of gambling by electronic means, including the use of interactive technologies and the Internet. According to the Commission, "total prohibition of gambling on the Internet, a proposition unanimously endorsed by every member of the [Commission], would provide law enforcement with the additional authority it needs to prosecute dishonest operators."

Contrary to federalism arguments that have been raised by the opponents of the bill, the legislation I have introduced will return control to the states by protecting the right of citizens in each State to decide through their State legislatures if they want to allow gambling within their borders and not have that right taken away by offshore, fly-by-night operators.

The bill also maintains a hands-off policy toward Internet Service Providers by granting them protection from liability and ensuring that they do not have to police their networks for illegal activity. It would protect those ISPs whose facilities are used by another person to engage in Internet gambling, provided that the material is transmitted by a person other than the provider and through an automatic process. In addition, the liability protection is contingent on the provider responding expeditiously to a notice from law enforcement that illegal gambling is occurring on their network by removing or disabling access to the site containing the illegal activity. This language is similar to the liability provisions for copyright violations included in the Digital Millennium Copyright Act enacted in 1998.

Mr. Chairman, online gambling is currently a $200 million per year business, and could easily grow to $1 billion business in the next few years. It is time to shine a bright light on Internet gambling in this country, and to put a stop to this situation before it gets any worse. The Internet Gambling Prohibition Act, which will keep children from borrowing the family credit card, logging on to the family computer, and losing thousands of dollars all before their parents get home from work, will do just that. I want to again thank you for holding this hearing and for allowing me to testify before the Subcommittee.