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US House Passes Goodlatte/Leach Bil

11 July 2006

The House of Representatives debated HR 4411, the Internet Gambling Prohibition and Enforcement Act, for over three and a half hours today before approving it by a vote of 317-93. It will now be referred to the Senate for further consideration, where efforts to pass it are likely to be spearheaded by Sen. Jon Kyl, R-Ariz.

HR 4411 is a bill that merges the two separate online gambling prohibition bills championed by Reps. Bob Goodlatte, R Va., and James Leach, R-Iowa. As was the case when Goodlatte's bill appeared before a House committee and subcommittee in recent months, much debate continues to center around the issue of exemptions for certain types of gambling over the Internet.

Goodlatte argued during the hearing that all gambling has historically been illegal in the United States unless it is expressly regulated by state authorities. He insists that HR 4411 simply maintains that balance by updating the language of the Wire Act to clearly state that remote forms of gambling that have not been expressly regulated by the states are illegal.

Supporters of Goodlatte filled minutes of their allotted time with the typical arguments against online gambling, such as that it sucks billions of dollars away from the American economy, fosters addiction and family problems, serves as a vehicle for money laundering and is run by disreputable "offshore, fly-by-night operations."

Reps. John Conyers, D-Mich., and Robert Scott, D-Va., opposed the legislation as they have done in previous hearings. Scott stated that there is nothing in the bill to prohibit Internet gambling and demonstrated that rather than targeting the act of gambling, HR 4411 actually targets the operating of an online gambling business. He added that the sites that run online gambling businesses are already based outside the U.S. out of the reach of authorities.

Conyers several times referred to HR 4411 as "Abramoff's Revenge." A large part of the Republicans' argument for placing such high priority on Internet gambling prohibition has been the fact that corrupt lobbyist Jack Abramoff worked to defeat a prohibition bill in 2000. Conyers pointed out, however, that the only reason Abramoff fought against a prohibition bill in 2000 was because he represented a client that wished for states to have the ability to offer lotteries over the Internet. As HR 4411 now stands, individual states would preserve the right to regulate Internet gambling if they so choose, so by Conyers' reasoning, Abramoff would not have opposed such a bill.

Although the language of HR 4411 preserves states' rights to regulate online gambling, it is thought that a state would have to use appropriate technology to verify gamblers ages and identities and that such regulations would be for intrastate gambling only. Goodlatte noted, however, that he does not believe technology exists to verify a Web surfers' location, so he envisions his bill as an all-out prohibition.

Toward the end of the hearing, Rep. Shelley Berkley, D-Nev., introduced an amendment whose stated goal was to "eliminate the exceptions to the bill's general prohibition against online gambling, thereby establishing a complete ban on all Internet gambling-related activities." Berkley, who was assisted by Conyers and Rep. Wexler, D-Fl, in drafting the amendment, stated that the HR 4411 is hypocritical because it does not ban all forms of online gambling. She stated that Goodlatte has only exempted the horse racing industry because he knew it would vigorously oppose his bill if he did not. Her amendment would make remote horse race wagering illegal as well.

Goodlatte called Berkley's proposed attachment a "poison pill" amendment because his underlying bill will fail if Berkley's amendment succeeds. He pointed out that Berkley represents the state of Nevada, which has by far the most liberalized gambling laws of any U.S. state, and he alleged that it is not really Berkley's intent to make all forms of remote gambling illegal but rather to ensure that Goodlatte's bill fails.

Goodlatte continues to assert that there is a distinct federal law that deals with remote horse racing (Interstate Horseracing Act), which is why his bill makes no judgment on the issue.

Berkley's amendment failed by a vote of 111-297.

The vote on Berkley's failed amendment was followed by a vote on HR 4411 itself. Representatives voted 317-93 in favor of the bill. It will now proceed to the Senate where efforts to support it will be lead by Sen. Jon Kyl, R-Ariz, who has been a staunch opponent of online gambling for many years.

Today's discussion of HR 4411 focused mainly on the language Goodlatte brought to it. There was little debate over the plausibility or practicality of the financial policing aspects of the bill that have been proposed by Leach. Many observers predict a tougher battle in Senate. It also seems that the bill would have to become a priority somewhat quickly in the Senate if the bill is to pass before the legislative period ends.

US House Passes Goodlatte/Leach Bil is republished from iGamingNews.com.
Bradley Vallerius

Bradley P. Vallerius, JD manages For the Bettor Good, a comprehensive resource for information related to Internet gaming policy in the U.S. federal and state governments. For the Bettor Good provides official government documents, jurisdiction updates, policy analysis, and many other helpful research materials.

Bradley has been researching and writing about the business and law of internet gaming since 2003. His work has covered all aspects of the industry, including technology, finance, advertising, taxation, poker, betting exchanges, and laws and regulations around the world.

Bradley Vallerius Websites:

www.FortheBettorGood.com
Bradley Vallerius
Bradley P. Vallerius, JD manages For the Bettor Good, a comprehensive resource for information related to Internet gaming policy in the U.S. federal and state governments. For the Bettor Good provides official government documents, jurisdiction updates, policy analysis, and many other helpful research materials.

Bradley has been researching and writing about the business and law of internet gaming since 2003. His work has covered all aspects of the industry, including technology, finance, advertising, taxation, poker, betting exchanges, and laws and regulations around the world.

Bradley Vallerius Websites:

www.FortheBettorGood.com