Panel Passes Bet Ban Pitches - Sunday 28th of May 2006

by Tony Batt

Las Vegas Gaming Wire

WASHINGTON Proposals to ban Internet gambling took another step toward becoming law Thursday as a House committee passed two bills designed to outlaw online wagering.

The action by the House Judiciary Committee means the House could vote as early as next month on whether to shut down Internet gambling, which has quadrupled in the past six years into a $12 billion industry.

If the House approves an Internet gambling ban, it would still have to pass the Senate before being sent to President Bush to be signed into law.

The committee voted 25-11 to pass a bill by Rep. Bob Goodlatte, R-Va., that would update a 1961 federal statute known as the Wire Act so it would ban all forms of Internet gambling and apply to new gambling technologies that may be developed.

"Offshore online gambling Web sites are cash cows and the greed that propels these companies leads them to solicit bettors in the United States despite the fact that the Department of Justice already believes this activity is illegal," Goodlatte said in a statement after the vote.

Goodlatte estimated there are as many as 2,300 gambling Web sites and they receive about $6 billion annually from U.S. gamblers.

The committee also passed by voice vote a bill by Rep. Jim Leach, R-Iowa, that would prohibit credit cards and checks from being used to make Internet gambling payments.

The committee also approved by voice vote an amendment to the Leach bill by Rep. Chris Cannon, R-Utah, that would preserve states' rights in regulating gambling.

House Republican leaders would like to merge the Goodlatte and Leach bills into one piece of legislation that could be brought to the House floor by the first or second week of June, sources said.

Goodlatte and Leach have expressed a willingness to blend their bills.

"We have had sporadic contacts, and I would think today's votes by the committee will expedite our negotiations," said Gregory Wierzynski, Leach's chief of staff.

The committee's debate on the Goodlatte and Leach bills did not include any mention of a bill introduced Wednesday by Nevada lawmakers that would set up a one-year study of Internet gambling by a federal commission.

Frank Fahrenkopf, president of the American Gaming Association, said Congress may not have enough time this year to pass an Internet gambling ban.

"There are about 35 legislative days left, and if they are going to merge these two bills, that's going to take some time," Fahrenkopf said.

Rep. Bobby Scott, D-Va., argued that the Goodlatte bill would be ineffective because 85 foreign countries permit Internet gambling and are unlikely to cooperate with a ban.

Scott also complained the bill would create an enforcement nightmare for financial institutions.

"This bill, as written, does not prohibit Internet gambling," Scott said. "It prohibits running the (offshore) operation. If you wanted to be effective in prosecuting illegal gambling over the Internet, you would prosecute the individual gamblers."

Goodlatte responded that his bill modifies a federal statute which applies to gambling entities, not gamblers.

To address concerns by the Department of Justice, Goodlatte said he amended his bill so it will not include an exemption for horse racing.

Rep. Robert Wexler, D-Fla., contended the bill still exempts horse racing and offered an amendment that would exempt dog racing and jai alai. When the committee voted 21-15 to reject his amendment, Wexler offered another amendment that would ban all forms of gambling on the Internet.

Goodlatte described the second Wexler amendment as a "poison pill" similar to a measure backed by convicted lobbyist Jack Abramoff in July 2000 The committee rejected Wexler's second amendment by voice vote.

Goodlatte blamed Abramoff, who was convicted of bribing members of Congress, for defeating efforts to pass an Internet gambling ban six years ago. Passing a ban this year would "expunge that smear on the House of Representatives," Goodlatte said.

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