House Subcommittee Moves Leach Bil

The U.S. House Crime Subcommittee today put its stamp of approval on HR 21, the Internet gambling bill proposed by Rep. James Leach, R-Iowa.

The subcommittee voted to report the bill favorably to the Judiciary Committee. The markup was chaired by Rep. Bob Goodlatte, R-Va., who was filling in for Subcommittee Chairman Howard Coble, R-N.C., who was out sick.

Goodlatte, who has proposed similar legislation, opened the markup by stating his objection to Internet gambling, saying that it puts children and those with gambling addiction at risk and gives criminal groups an avenue to launder money.

"By making gambling more convenient, it can do nothing but make the problem worse," Goodlatte said.

Leach's bill would make it illegal for online gambling merchants to accept payments from Americans in the form of bank instruments such as credit cards. However, the bill also stipulates that online gambling can legally occur within states that allow it, so long as the states are able to reject bettors from other jurisdictions where Internet gambling is not allowed.

Rep. Robert Scott, D-Va., spoke out against the Leach bill, saying that although he believes gambling should be tightly regulated by the states, he believes Leach's approach will be ineffective at blocking what it sets out to block. Scott expressed concern about the section of the bill that would allow states to regulate online gambling within their borders, saying that would only create more gambling. He also questioned the feasibility of legislating Internet policy, because the Internet "has no jurisdiction."

To fully eradicate Internet gambling, Scott said, the Unite States should prosecute individual online gamblers. During the hearing, he offered an amendment that would have done that, but withdrew the amendment before it could be voted on. Scott said he would save the amendment for the full committee markup of the Leach bill.

Rep. Sheila Jackson Lee, D-Texas, proposed an amendment that would have removed section three of the bill, the section that makes financial institutions responsible for blocking Internet gambling transactions. She said that while large banks could likely handle the task, she didn't want to burden smaller banks and community banks.

"I am not here to cry on my pillow on behalf of banks... but there are lots of mom-and-pop banks in our neighborhoods," she said.

Goodlatte criticized her amendment, saying it "would have the effect of gutting the bill." The subcommittee voted to reject the amendment proposed by Jackson Lee.

Along with Scott and Jackson Lee, a third Democrat, Rep. Maxine Waters of California, spoke out against the Leach bill, saying that she didn't feel that banning certain behaviors on the Internet seemed like the right way to deal with the concerns of those who oppose online gambling.

"I don't think this is a way to deal with this new technology," she said. "I would suggest to you that perhaps there is a need for an investment by which ever party is in power to have some kind of retreat and investigation and research to talk about how we deal with the fact that we have this new technology that opens up all of these possibilities, and at the same time, we have freedom of speech and freedom of privacy and other issues that come from living in a democracy."

Reacting to the markup, a spokesman for the Interactive Gaming Council said his group remains committed to finding a way to regulate the U.S. online gaming market.

"We really are a strong advocate for regulation of Internet gaming," said Keith Furlong, the deputy director of the IGC. "We don't feel that using the banking industry as Internet police really sets a good precedent for e-commerce in general, and if the states have gaming, we don't feel that the medium of exchange should be the controversy."