Staying on top of interactive gambling bills as they move through the United States' federal and state legislatures no longer entails hours of research, thanks to this biweekly update on U.S. state and federal legislation. In state news, two New Jersey assemblymen introduced a bill last week that would make betting on real-time card games via the Internet legal. At the federal level, Rep. Bob Goodlatte, R-Va., reintroduced his anti-Internet gaming bill to the House of Representatives, and another bill from Rep. John LaFalce, D-N.Y. and Rep. Michael Oxley, R-Ohio, passed in the House Financial Services Committee. Goodlatte's bill is expected to be combined with the LaFalce-Oxley bill.
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State Legislation
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MICHIGAN |
HB 4653
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| Bill Summary |
The bill, HB 4653, would ban a person engaged in a gambling business from using the Internet or any interactive computer service (which would include an Internet service provider or system providing access to the Internet) from using the Internet to both place and offer wagers. For further information, a legislative analysis is available.
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| Bill Status |
House Bill 4653 awaits a hearing before the House Committee on Gaming and Casino Oversight. |
| Latest Action |
This piece of legislation was introduced by Rep. James Koetje, the chairman of the House Committee on Gaming and Casino Oversight, on April 24. Following its introduction, the bill was referred to the committee, where it needs to be heard before any further action can be taken.
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| Outlook |
The outlook for Michigan's latest effort to prohibit Internet gambling remains unclear. Although the state early last year enacted legislation that supposedly prohibits the activity, the law's ability to do so has been questioned. Act 235, which amended the state's criminal code by making it illegal to offer Internet gambling to Michigan residents, has long been derided as ineffective. Michigan may be trying to clarify its anti-Internet gambling status through this bill. The state legislature has until December 2002 to either pass or kill HB 4653.
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| MICHIGAN |
SB 565, 566, 567, 568 and 569
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| Bill Summary |
Together these bills will, among other things, permit pari-mutuel wagering via the Internet and other electronic means.
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| Bill Status |
This group of bills was referred to the Senate Committee on Farming, Agribusiness and Food Systems. |
| Latest Action |
These bills were introduced on June 26 and then passed to the Senate Committee on Farming, Agribusiness and Food Systems, where they await further action.
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| Outlook |
According to a representative for Sen. George McManus Jr., one of the bill's sponsors, Michigan's legislature must overcome many differences in priorities and beliefs before racing and gambling bills will be able to pass. "Peace in the Middle East is easier to achieve," the representative said.
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| CALIFORNIA |
AB 471
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| Bill Summary |
Among other things, this bill would authorize any racing association or fair to accept advance deposit wagers, or allow these wagers through a betting system or multi-jurisdictional wagering hub, including via electronic means.
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| Bill Status |
Most recently California Gov. Gray Davis gave AB 471 the thumbs up. The bill becomes law on Jan. 1, 2002.
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| Latest Action |
AB 471 was passed by the Senate on July 18. Amendments proposed by the Senate were accepted by the Assembly on July 20. Somewhat unexpectedly, the governor signed the bill on Aug.13. The California Horse Racing Board on Sept. 22 announced that it had approved 15 regulations allow account wagering to begin in January. The proposed regulations, having been made available for public opinion, will be addressed by the full board during a Nov. 30 hearing.
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| Outlook |
Already a number of racing companies, like Youbet.com and TVG, are preparing to offer their services to Californians. It's estimated that California's coffers will benefit from the redirection of the nearly $30 million that the state's residents bet last year on illegal offshore sites.
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| NEVADA |
AB 466
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| Bill Summary |
AB 466 permits gambling sites to operate from Nevada.
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| Bill Status |
AB 466 went into effect July 1, 2001. Now the state is looking at the legality of Internet gambling under federal law, as well as a host of other issues. A hearing on this subject was held July 31 and Aug. 1. (See related article, Nevada Gaming Commission Meeting Agenda.)
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| Latest Action |
The original bill, AB 296, was eventually incorporated into a companion bill, AB 578. At first the bill steamrolled its way through both houses of the Nevada legislature, yet failed at the final step--by all accounts, suffering from a political tiff between the two houses--while awaiting a vote on the Senate floor. The legislation, however, was brought back to life by being piggybacked with AB 466, a bill that creates a uniform, statewide system for issuing work cards to gambling employees. Gov. Kenny Guinn signed the legislation on June 14, and the bill went into effect on July 1. The next step is for the Nevada Gaming Commission and the Gaming Control Board to do a survey of applicable legislation on the state and federal levels.
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| Outlook |
Internet gambling probably remains a few years from becoming a reality in Nevada. There has been no determination whether the federal government could prevent a state or territorial government from offering interactive gambling services. Recent discussion of anti-Internet gambling bills in the U.S. House of Representatives Financial Services Committee couldn't solve the problem of overlap between state and federal laws. Additionally, it remains unclear whether the Interstate Wire Act prohibits games of chance in addition to sports wagering activities.
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| OREGON |
SB 755
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| Bill Summary |
SB 755 prohibits Internet gambling.
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| Bill Status |
This bill was signed by Gov. John A. Kitzhaber on June 21.
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| Latest Action |
To enhance its chances of passage, SB 755 was amended to permit racetrack hubs to offer interactive betting services via the Internet as part of a closed-loop system. It has passed both houses and was sent to Gov. Kitzhaber for his signature. The bill was renamed 755B and will be enacted this year.
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| Outlook |
With the bill's passage, Oregon now joins a small group of states that have banned Internet gambling. Other states to prohibit Net betting include Illinois, Louisiana, Michigan and South Dakota.
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| U.S. VIRGIN ISLANDS |
Bill No. 24-0046
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| Bill
Summary |
This legislation creates a regulatory structure to permit interactive gambling from the Virgin Islands.
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| Bill Status |
On July 18 the V.I. Senate overwhelmingly passed the bill with a vote of 11-3. The governor signed it into law on Aug. 3.
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| Latest Action |
This bill was discussed at a Senate Committee for Economic Development, Agriculture and Consumer Protection hearing on June 29, at which time two amendments were adopted. Having been heartily endorsed by the V.I. Senate on July 18, the bill was signed Aug. 3 by Charles Turnbull, the territorial governor.
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| Outlook |
As with the Nevada bill, whether the federal government could prevent a state or territorial government from offering interactive gambling services hasn't yet been determined. Further, no decision has been made regarding whether the Interstate Wire Act prohibits games of chance in addition to sports wagering. It's been suggested, however, that the V.I. government hoped to pass Bill No. 24-0046 before the federal government passes any prohibitive legislation, thus enabling the territory to grandfather in legislation for Internet gambling much like Nevada did back when casinos and sports books were outlawed in the United States. The V.I. Casino Control Commission has now been handed the task of developing procedures and standards for online casinos. The Virgin Island legislation already includes regulations for Internet casinos.
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| New Jersey |
A-3150
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| Bill Summary |
This controversial bill would authorize licensed land-based casinos in New Jersey to offer their games via the Internet.
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| Bill Status |
A-3150 remains in committee.
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| Latest Action |
The bill was sent to the Commerce, Tourism, Gaming and Military and Veterans Affairs Committee on Jan. 23.
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| Outlook |
Unlike the bill in Nevada that passed in June, New Jersey's A-3150 has failed to garner great support among legislators and Atlantic City casino operators. The bill's author, Assemblyman Tony Impreveduto, has vowed to introduce a new bill next session if the original one isn't passed.
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| New Jersey |
A-3932
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| Bill Summary |
This bill, which was introduced by Assemblymen Joseph Azzolina and Nicholas Asselta, would allow Atlantic City casinos to offer real-time card games via the Internet.
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| Bill Status |
A-3932 will be heard by the Commerce, Tourism, Gaming and Military and Veterans Affairs Committee on Nov. 19.
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| Latest Action | The bill was introduced on Nov. 9 and sent to the Commerce, Tourism, Gaming and Military and Veterans Affairs Committee.
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| Outlook | Word is that the bill is likely to pass, since its sponsors are the chairman and vice-chairman of the committee to which it was referred. However, it will compete with A-3150, which would allow land-based casinos in the state to offer their games online. Both bills await attention from the same committee.
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Federal Legislation
| HR 556 |
Unlawful Internet Gambling Funding Prohibition Act
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| Bill Summary |
This bill would prohibit Internet gambling businesses from accepting the following payment methods from customers: credit cards, electronic fund transfers, any instrument drawn by or on behalf of another and payable through any financial institution and the proceeds of any other form of financial transaction involving a financial institution as payer or financial intermediary for another.
The bill provides for civil and criminal penalties including a permanent injunction against wagering. It shields certain financial institutions from liability from unknowing involvement of their facilities in credit card transactions, electronic fund transfers, money transmitting and drawing, paying, transferring or collecting a check or draft instrument. In addition, HR 556 includes provisions against money laundering, including encouraging foreign governments to identify Internet gambling operations that are used to launder money.
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| Bill Status |
HR 556 was marked up by the House Financial Services Committee on Oct. 31. The committee approved the bill, which will be sent to the full House for a vote.
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| Latest Action |
HR 556 marks the second attempt by Rep. James Leach, R-Iowa, to prohibit Internet gambling by making it nearly impossible for Americans to pay for online gambling. The bill was introduced in February by Leach but was revisited in the Financial Anti-Terrorism Act of 2001, which was proposed by Financial Services Committee Chairman Rep. Michael Oxley, R-Ohio, and Rep. John LaFalce, D-N.Y. A response to the Sept. 11 terrorist attacks, that bill aimed to squash money laundering opportunities for terrorists. Leach's bill against online gambling was included in the anti-terrorism legislation. After being discussed by the House Financial Services Committee, the anti-terrorism bill was fast-tracked without the Internet gambling provisions and approved by the full House on Oct. 17. On Oct. 31, the Internet gambling section was reconsidered and approved by the committee by a vote of 34 to 18. HR 556 is now awaiting a vote by the full House.
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| Outlook | This bill faces the same challenges that other prohibition proposals have faced. The White House has yet to weigh in on the subject, and doubtless some lawmakers will base their response to the bill on whether the president backs it.
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| HR 3215 |
Combatting Illegal Gambling Reform and Modernization Act
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| Bill
Summary | HR 3215 would update the 1961 Interstate Wire Act to include Internet gambling as unlawful. The bill also aims to rid the Wire Act of gray areas caused by the Internet and other modern technology. In addition, the bill would ban Internet gambling merchants from accepting payments in the form of credit cards, checks and Internet transfers.
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| Bill Status | This bill was referred to the House Judiciary Committee, where it remains.
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| Latest Action | Rep. Bob Goodlatte, R-Va., proposed this bill on Nov. 1.
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| Outlook |
Last year Goodlatte failed to get a passing vote on his Internet gambling legislation, partly due to Energy and Commerce Committee Chairman Rep. W.J. "Billy" Tauzin, R-La., who expressed concern that the bill would encourage new forms of gambling. HR 3215 differs from the LaFalce-Oxley bill that the House Financial Services Committee is considering because the two bills suggest different enforcement mechanisms. Nevertheless, Washington insiders predict the two bills will be combined.
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| HR 2579 |
Internet Gambling Payments Prohibition Act
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| Bill Summary |
The purpose of the bill, which was introduced by Rep. John LaFalce, D-N.Y., is to prevent the use of certain bank instruments for Internet gambling and other purposes.
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| Bill Status |
HR 2579 is pending before two House committees.
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| Latest Action |
This bill was introduced to the House of Representatives on July 20 before being referred to both the House Financial Services and House Judiciary committees. On Aug. 8 it was referred to the House Subcommittee on Crime.
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| Outlook |
Last year, LaFalce co-authored a similar bill with Rep. James Leach, R-Iowa. Upon that bill's failure to pass before Congress recessed, the two legislators have split their approach, with each introducing his own bill to ban the use of credit cards and other payment systems for Internet gaming. LaFalce's bill, however, could be condemned to meet the same fate as last year's bill. As it is, Leach's bill, which was introduced earlier this year, remains in committee awaiting attention.
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| HR 2421 |
Jurisdictional Certainty Over Digital Commerce Act
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| Bill Summary |
HR 2421 aims to establish jurisdictional boundaries over the commercial transactions of digital goods and services conducted through the Internet. While not directly related to Internet gambling, this bill would give the federal government control over all e-commerce transactions, effectively erasing any state or territorial control over Net betting issues, including both regulation and prohibition of such activity.
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| Bill Status |
The Jurisdictional Certainty bill remains in committee.
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| Latest Action |
Introduced on June 28 by Rep. Cliff Stearns, R-Fla., HR 2421 was referred to the House Energy and Commerce Committee, as well as the House Judiciary Committee. On July 6, the Commerce Committee sent the bill for consideration by the Subcommittee on Commerce, Trade and Consumer Protection. The Judiciary Committee on July 16 forwarded HR 2421 to the Subcommittee on Commercial and Administrative Law.
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| Outlook |
The fate of this bill remains unclear, although determining whether the federal government should have control of the Internet--at least in the United States--remains a political hot potato.
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| S 718 |
Amateur Sports Integrity Act
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| Bill
Summary |
This bill would require the National Institute of Standards and Technology to establish a program to support research and training in methods of detecting the use of performance-enhancing drugs by athletes and others. It would also outlaw all betting on amateur sports in Nevada, including college and Olympic events.
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| Bill Status |
The Amateur Sports Integrity Act remains on the Senate legislative calendar, but no date has been set for it to be addressed.
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| Latest Action |
On April 5 Sen. John McCain, R-Ariz., introduced S 718.
S 718 has been the focus of several hard-fought battles between senators. Despite these battles in the Senate Commerce Committee, S 718 managed to survive, earning a tied vote of 10 to 10 on May 3. A representative for McCain said the senator would introduce his bill as an amendment to another bill.
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| Outlook |
Whether this bill will pass is unclear. Although McCain has managed to gain significant support from a number of interest groups, the American Gaming Association continues to lobby hard against S 718.
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Failed Legislation
Illinois: H 3089
One of two Internet gambling bills that were introduced before the Illinois legislature this year, H 3089, was tabled by its author, Rep. Timothy Schmitz, on March 28. H 3089 was intended to prohibit a person from making a wire transfer for the purpose of Internet gambling. It would have also prohibited financial institutions from wiring money to pay for Internet gambling.
Illinois: H 545
This bill, introduced on Feb. 1, was referred to several committees before being stalled in the House Committee on Rules until the legislature ended its session. H 545 proposed amending the state criminal code to make it illegal for Illinois residents to gamble on the Internet.
California: AB 1229
California's most recent effort to prohibit Internet gambling failed when AB 1229, a bill introduced by Assemblyman Dario Frommer (D-Glendale), was unable to get moved out of the state Senate Governmental Organization Committee before adjournment.
Oregon: HB 2823
This Net betting prohibition bill was introduced around the same time SB 755 was brought before the state senate. Since then, HB 2823 has languished in the House Judiciary Committee. With the adjournment of the legislature on July 7, the bill is now considered dead.
Indiana: HB 1042
This bill prohibiting Internet gambling failed to gain support among Indiana legislators. It has languished in the Public Policy and Ethics and Veterans Affairs committee since January. With the legislative session now closed, this bill is considered dead.
Iowa: HF 13
Iowa's bill, first introduced in January before being sent to the House Standing Committee on State Government, would prohibit a person from using the Internet to conduct or participate in a lottery or in a game for any sum of money or property, to make a bet, to engage in bookmaking, or to deliver a wager for a fee. The bill has seen no action since that time and remains unlikely to be passed out of committee.