Leach Bill Resurfaces as Expected

After putting thoughts of I-gaming aside to fast-track anti-money laundering legislation two weeks ago, a U.S. House of Representatives committee this morning approved a bill that would ban payment for Internet gambling.

The proposed law would make it illegal for Internet gaming operators to accept bank instruments including credit cards, debit cards and electronic fund transfers from Americans.

The House Financial Services committee approved the bill 34-18. The Unlawful Internet Gambling Funding Prohibition Act will now be passed on for a full vote of the House.

"Simply from a privacy perspective, this is an important bill. From a family perspective, this is an imperative bill."

-Rep. James Leach

The I-gaming prohibition bill has been reincarnated many times in the House during the last few years. It was proposed by Rep. James Leach, R-Iowa, in February, and was most recently included in the Financial Anti-Terrorism Act of 2001, which aims to quell terrorist's money laundering. A reaction to the Sept. 11 attacks, the bill was approved by the full House on Oct. 17. The Senate version passed Oct. 11.

During today's debate on the Net betting bill, Rep. Michael L. Castle, R-Del., objected to the proposed legislation. He said his concerns about the bill have still not been addressed.

"Even after multiple hearings on this bill over several years, the questions have not been answered," he said.

Castles' primary concern was what he perceived as the bill's failure to adequately define terms. "There are a lot of words of dubious definition," he said.

Rep. Maxine Waters, D-Calif., had similar problems with the bill, which was introduced by Committee Chairman Rep. Michael Oxley, R-Ohio, and Rep. John LaFalce, D-N.Y.

Waters said that, while she advocates eliminating money laundering, she's not clear on the definition of unlawful gambling as it is presented in the bill. What exactly the bill defines as "unlawful gambling" was the subject of many of the committee members' concerns. Waters said she did not want to reduce competition by making some Internet gambling sites legal and excluding others--like sites that are OK by Nevada state law.

"The decision of an adult to make a bet with his or her own money may not be one we approve of, but it is none of our business."

-Rep. Barney Frank

"No one wants to be in the position of simply excluding some and allowing other Internet gambling to exist," she said.

Leach, one of Congress's most outspoken critics of Internet gambling, said Internet gambling is "the single easiest way to launder money."

"This is the most effective way to bring it to an end," he said.

Leach also brought up the issue of credit card privacy, saying that this is the biggest privacy vote of the committee's history. He said 1 million Americans every day give their credit card numbers to illegal Internet casinos abroad, although he did not cite a source for that number.

"Simply from a privacy perspective, this is an important bill," he said. "From a family perspective, this is an imperative bill."

Rep. Barney Frank, D-Mass., said he doesn't think it is the government's place to tell people that they cannot gamble online. Some people gamble too much and others drink beer too much, he said, but to ban the activity because some people don't like I-gaming is "wholly inappropriate."

"I don't think we should set ourselves up as the national household budget manager," he said. "The decision of an adult to make a bet with his or her own money may not be one we approve of, but it is none of our business."

It had been reported that the House panel would consider deleting an amendment to the bill that would have allowed American Indian casinos to accept credit card payments for online gambling. However, the committee spoke only briefly on the subject and ended up neither creating nor contracting any rights accorded to Indian casinos through the Indian Gaming Regulatory Act.

"I think we are going way overboard here without understanding the consequences of what we are doing,"

- Rep. Mel Watt

One of the sponsors of the bill, LaFalce, said he could not be more in disagreement with Frank. Internet gambling, he said, is "without redeeming social value."

"We have had legal prohibitions against gambling since the founding of the republic. Mr. Frank is saying we permitted slavery too but there's a difference," he said.

Rep. Mel Watt, D-N.C, on the other hand, said he wanted to identify himself with Frank's remarks. He said the bill sounded like a substantial intrusion on individual rights.

"I think we are going way overboard here without understanding the consequences of what we are doing," he said.

An aide to Rep. Bob Goodlatte, R-Va., told Reuters Wednesday that Goodlatte will introduce an updated version of his own anti-Internet gaming bill, which was narrowly defeated last year, on Thursday.