The Internet Gambling Prohibition Act of 1997

28 May 1997

Mr. KYL. Mr. President, I rise to introduce the Internet Gambling Prohibition Act of 1997. It will outlaw gambling on the Internet. I believe it will protect children from logging on to the Internet and being exposed to activities that are normally prohibited to them. And for those people with a gambling problem, my bill will make it harder to gamble away the family paycheck.

Gambling erodes values of hard work, sacrifice, and personal responsibility. Although the social costs of gambling are difficult to quantify, research indicates they are potentially staggering. Gambling is a growing industry in the United States, with revenues approaching $550 billion last year--three times the revenues of General Motors Corp. In 1993, more Americans visited casinos than attended a major league baseball game.

The problem can only grow worse with online casinos. Now it is no longer necessary to go to a casino or store where lottery tickets are sold. Anyone with a computer and a modem will have access to a casino: Internet users can access hundreds of sites for blackjack, craps, roulette, and sports betting. Gambling addiction is already on the rise. Online gambling will only increase the problem.

Why is this bill necessary? It dispels any ambiguity by making clear that all betting, including sports betting, is illegal. Currently, nonsports betting is interpreted as legal. The bill also clarifies the definition of bets and wagers. This ensures that those who are gambling cannot circumvent the law. For example, virtual gaming businesses have been known to offer prizes instead of money, in an attempt to evade the law.

Additionally, my bill clarifies that Internet access providers are covered by the law. As the National Association of Attorneys General [NAAG] task force on Internet Gambling reported, `this is currently the most important section to State and local law enforcement agencies, because it provides a civil enforcement mechanism.' FCC-regulated carriers notified by any State or local law enforcement agency of the illegal nature of a site are required to discontinue services to the malfeasor. NAAG believes that this can be a very effective deterrent. The bill includes interactive computer-service providers among those entities required to discontinue such service upon notice. Federal, State, and local law enforcement entities are explicitly authorized to seek prospective injunctive relief against continued use of a communications facility for purposes of gambling.

The Internet Gambling Prohibition Act makes explicit the intent of Congress to create extraterritorial jurisdiction regarding Internet gambling activities. Too often, illicit operators of virtual casinos set up shop in friendly jurisdictions beyond the direct application of U.S. law. It will also require the DOJ to report on the difficulties associated with enforcing the statute. Finally, it places some burden on the bettor.

The Internet has great potential to promote both educational opportunities and business expansion in this country. At the same time, the Internet is fast becoming a place where inappropriate activities such as gambling, pornography, and consumer fraud thrive. Recently, many businesses have welcomed law enforcement's involvement in cracking down on consumer fraud. We must find a constitutional way to deal with the other problems raised by this revolution in communications. I believe that it is possible to impose some conditions, as we have in other areas, without violating free speech rights.

There is growing support for changes to current law. As I mentioned, the NAAG has a task force on Internet gambling, and the report of the task force--authored by Attorneys General Dan Lungren and Hubert Humphrey--called for a legislative remedy to stem the tide of gambling electronically. NAAG has endorsed my bill.

Mr. President, the Internet Gambling Prohibition Act of 1997 ensures that the law will keep pace with technology and keep gambling off the Internet. I urge my colleagues to pass the bill.