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. The hot news this week on the U.S. law front comes from the Virgin Islands, where the territorial governor has signed legislation authorizing interactive gambling. California's governor, meanwhile, inked a bill that permits betting on the ponies via electronic means. On the federal front, things remain status quo until Congress reconvenes after its summer break in early September.
| 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 to allow these wagers through a betting system or multijurisdictional wagering hub, including via electronic means.
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| Bill Status |
Most recently California Governor Gray Davis gave AB 471 the thumbs up. The bill becomes law on January 1, 2002.
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| Latest Action |
AB 471 was passed by the state senate on July 18, whereupon senate proposed amendments were accepted by the assembly on July 20. Somewhat unexpectedly, the governor passed the bill on August 13.
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| Outlook |
Despite the governor having nixed similar efforts last year, this year's move to allow account wagering has proven successful. With the bill's passage and approval from the governor, it becomes law in January. 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 by redirecting the nearly $30 million residents bet last year with illegal offshore sites.
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| CALIFORNIA |
AB 1229
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| Bill Summary |
AB 1229 would prohibit most forms of interactive gambling.
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| Bill Status |
Most recently AB 1229 was passed out of the California Assembly and scheduled for a hearing by the Government Organization Committee July 10. The committee, however, has postponed the hearing. No date has been set for its next hearing.
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| Latest Action |
AB 1229 was passed by the Assembly May 30 with a 61-2 vote. It was then scheduled for a hearing by the senate Government Organization Committee, but the bill's sponsor cancelled the hearing to make changes to the bill. The hearing was rescheduled to July 10, whereupon the committee postponed the meeting once again. No date has been set for it to heard, although it's expected to occur in mid-August when the legislature returns from its summer recess. Should this committee eventually pass it, AB 1229 will head over to the Senate Appropriations Committee.
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| Outlook | With a September 14 deadline looming -- the last day both the Assembly and the Senate have to pass bills -- AB 1229 still has a way to go before getting passed. And there's competition for legislators' attention as they deal with the redrawing of state and federal political districts in the Golden State. Such matters are usually known for their depth of contention, rather than easy passage.
On the other hand, based on the background of the bill's author, Assemblymember Dario Frommer (D-Glendale), AB 1229 would seem to have a good chance of passing. Frommer previously worked as appointments secretary to California Governor Gray Davis and as an advisor to Davis in previous positions. Frommer also served as a chief of staff to former Senator Art Torres.
Although Frommer's office claims that AB 1229 has garnered little comment - positive or negative, a spokesperson for California Attorney General Bill Lockyer recently told the San Jose Mercury Sun that enforcement of this bill, should it pass, will have to come from some other office. The AG is more concerned with legalized forms of gambling in the state. "We're not sending jack-booted thugs door-to-door to see who's placing bets on their home computers," the spokesperson commented. Previous efforts to ban Internet gambling in California have failed.
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| NEVADA |
AB 466
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| Bill Summary |
AB 466 permits interactive gambling sites to operate from Nevada.
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| Bill Status |
AB 466 went in 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 to back life under a little-known legislative move, whereupon it was piggybacked unto AB 466, a bill that creates a uniform, statewide system for issuing work cards to gambling employees. Gov. Guinn signed the legislation on June 14, while the bill actually went into effect on July 1. The next step is for the Nevada Gaming Commission and the Gaming Control Board to do an in-house survey of applicable legislation on the state and federal levels.
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| Outlook |
By most accounts, Internet gambling probably remains a couple 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. Further, it remains unclear whether the Interstate Wire Act federally 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 has been re-christened as 755B and will be enacted later this summer.
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| Outlook | With the bill's passage, Oregon now joins a very select group of states that have banned Internet gambling. Other states to prohibit Net betting so far 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 VI Senate overwhelmingly passed the bill with a vote of 11-3., and was signed into law by the governor 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, Ph.D., 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 definitive decision has been made regarding whether the Wire Wager Act prohibits games of chance in addition to sports wagering. It's been suggested, however, that the VI 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 sportsbooks were outlawed in the U.S. The V.I. Casino Control Commission has now been handed the task of developing procedures and standards for online casinos, something that should take much less than Nevada's two-year timeframe. The Virgin Island legislation, however, already includes the regulation for e-casinos.
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| New Jersey |
A-3150
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| Bill Summary |
This controversial bill would authorize currently licensed land-based casinos in New Jersey to offer their same games over the Internet.
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| Bill Status |
A-3150 remains in committee.
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| Latest Action | The bill currently resides in the Commerce, Tourism, Gaming and Military and Veterans Affairs Committee, where it was sent on January 18.
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| Outlook | Unlike the Nevada bill that passed earlier this year, 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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| 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 currently pending before two House committees.
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| Latest Action |
This piece of legislation was introduced before the House of Representatives on July 20 before being referred to both the House Financial Services and House Judiciary committees.
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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 in their approach, with each introducing their 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 |
To exercise authority under Article I, section 8, clause 3 of the Constitution of the United States to clearly establish jurisdictional boundaries over the commercial transactions of digital goods and services conducted through the Internet, and to foster stability and certainty over the treatment of such transactions.
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| Bill Status |
The Jurisdiction Certainty bill remains in committee.
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| Latest Action |
This bill, while not directly related to Internet gambling, 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. Introduced on June 28, 2001 by Rep. Cliff Stearns, R-Fla., it 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 U.S. -- remains a political hot potato.
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| HR 556 |
Unlawful Internet Gambling Funding Prohibition Act
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| Bill Summary |
Unlawful Internet Gambling Funding Prohibition Act, as explained on the Congressional website:
Prohibits any person engaged in a gambling business from knowingly accepting in connection with the participation of another person in Internet gambling: (1) credit; (2) electronic fund transfers or funds transmitted by or through a money transmitting business; (3) any instrument drawn by or on behalf of another and payable through any financial institution; or (4) the proceeds of any other form of financial transaction involving a financial institution as payer or financial intermediary for another.
Prescribes judicial guidelines under which the Federal district courts exercise exclusive jurisdiction to prevent or restrain violations of this Act. Provides for civil and criminal penalties, including a permanent injunction against wagering.
Shields certain financial intermediaries from liability for unknowing involvement or unknowing use of their facilities in: (1) any credit transaction, electronic fund transfer, or money transmitting service; or (2) drawing, paying, transferring, or collecting a check or draft instrument. Cites exceptions.
Declares that the Federal Government, in deliberations with a foreign government on money laundering, corruption, and crime issues, should: (1) encourage cooperation by foreign governments and relevant international fora in identifying whether Internet gambling operations are being used for money laundering or other crimes; (2) advance policies that promote international cooperation in the enforcement of this Act; and (3) encourage the Financial Action Task Force on Money Laundering to study the extent to which Internet gambling operations are being used for money laundering.
Amends the Federal Deposit Insurance Act to provide that if an appropriate Federal banking agency determines that an insured depository institution is engaged in activities proscribed under this Act, such agency may issue an injunction.
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| Bill Status |
The bill remains in the Subcommittee on Financial Institutions and Consumer Credit, where HR 556 was referred on March 2, as well as facing the Subcommittee on Crime since February 16.
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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 their online gambling activities. The bill was introduced in February 2001 and sent to the House Judiciary and Financial Services Committee, where it still remains.
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| Outlook | While the bill has yet to see any action in committee, there is a possibility that a prohibition bill containing similar language to HR 556 could be introduced this session by Rep. Bob Goodlatte. A spokesman for Leach indicated that the congressman is working hard for the bill to be considered by the committee.
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| S 718 |
Amateur Sports Integrity Act
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| Bill
Summary | A bill to direct 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 for other purposes. This would also outlaw all betting on amateur sporting events in Nevada, including college and Olympic events.
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| Bill Status |
The Amateur Sports Integrity Act remains on the Senate legislative calendar.
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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, and featured swipes that Muhammad Ali would have envied in his prime. Despite these battles in the Senate Commerce Committee, S 718 managed to survive, earning a 10-10-tie vote on May 3. The bill has since been placed on the Senate legislative calendar. No date for the vote has been set. A spokesperson for McCain explained that the senator would introduce his legislation as an amendment to another bill, as yet unnamed, when it's most likely to be passed.
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| Outlook |
Whether this bill will pass remains 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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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.
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'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.