Three of the Internet gambling industry's biggest opponents took center stage on Capitol Hill Tuesday to testify at a hearing before a subcommittee of the House Financial Services Committee regarding Internet gambling.
Rep. James A. Leach, R-Iowa, Rep. Bob Goodlatte, R-Va., and Sen. Jon Kyl, R-Ariz., all voiced their support for a proposed House bill that would effectively prohibit online gambling. If passed the bill would prohibit the use of "banking devices" (credit cards, debit cards and wire transfers) for Internet gambling.
The trio was part of the first panel to testify before the committee and all three were in agreement that action needed to be taken, and taken as quickly as possible, to prevent the online gambling market from getting bigger.
Michael Oxley, R-Ohio, the chairman of the full committee was on hand as well and set the tone of the hearing with his opening remarks. "I am pleased to see the distinguished panel of members of both the House and Senate that we have before us today," he said. "I want to welcome my committee colleague and former chairman of the Banking and Financial Services Committee, Mr. Leach, who has had a long-standing interest in this issue, particularly with regard to the use of financial instruments in Internet gambling, and I look forward to his comments on that particular issue.
I also want to welcome the gentleman from Virginia, Mr. Goodlatte, and the senator from Arizona, Senator Kyl, both of whose efforts to protect our nation's most vulnerable citizens from the unscrupulous activities of the offshore casino industry have been tireless--although those engaged in the online gambling business might say 'tiresome.'"
When Kyl was given a chance to speak, he reiterated the message from another subcommittee hearing held earlier in the month, which focused on the amount of young people who find themselves in debt from online gambling.
He also warned that organized crime is heavily involved in the business.
"Youth are particularly at risk, especially college students," he said. "The FBI has proven that organized crime groups are heavily involved in Internet gambling. Let me repeat that: Organized crime groups are heavily involved with Internet gambling."
Kyl didn't, however, supply examples to support the statement.
Leach admitted that law enforcement agencies haven't been going after online gamblers or operators, but said that his bill could give muscle to the movement by targeting payment systems.
"In my view it is the most effective enforcement mechanism we can enforce," he said. "The approach that I have crafted can work alone and would provide a new tool for law enforcement. I think it is the best approach at this time. There are many approaches to this issue, but enforcement is the key."
Goodlatte focused on the ambiguity of the Federal Wire Act of 1961, which remains the only federal law applicable to online gambling some 40 years after it was passed (long before the inception of today's Internet).
"There is some question as to the application of that law towards Internet gambling," he said. "This is something that is sucking billions of dollars out of the country and we need legislation to address that."
Since the Wire Act is so unclear in regards to online gambling, and a trial judge in Louisiana recently ruled that the law doesn't cover casino gambling; Goodlatte feels it is time to pass a law that plugs the holes. "The Wire Act can be read to cover other kinds of activity, but because of that uncertainty, we need to have a new law which effectively updates and modernizes the Wire Act," he said. "We need a modern law that addresses changes in technology."
Goodlatte and Kyl agree that any initiative should not include horse racing and other forms of gambling that have already surfaced on the Internet. Goodlatte pointed out that standards are in place at a bricks-and-mortar casino and a racetrack to prevent minors from getting in over their heads.
"It is hard for a child to get addicted to gambling at the race track," he said. "It is easy for them to click the mouse and bet the house."
Leach, speaking before subcommittee on Financial Institutions and Consumer Credit, showed his conservative stripes when he argued that the bill didn't go far enough.
"This is a very narrowly crafted approach that only goes after Internet gambling," he said.
Leach did quote a "source" that he has in the gambling business who claimed that many of the land-based operators were not interested in venturing online.
"There is only one casino that has chosen to get into Internet gambling," he said. "It is his view that there maybe others, but not many, but they could be thinking about it and that is why we need to get on this right away."
Kyl told the House committee that he doesn't have a date for introducing his bill, but he did say that he hopes to have it introduced soon.
He is relying on the House to go along with a companion bill as well.
"Remember the Federal Wire Act remains in force," he said. "We are going to pass legislation this session that will ban Internet gambling, I am confident of that. I hope this hearing will generate the momentum from such legislation."