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U.S. Administration Officials Grilled Over Net Gambling Stance

The scope of Internet gambling "virtually knows no bounds," Rep. John LaFalce, Democrat-New York, the committee's ranking Democrat, told Treasury and Justice Dept. representatives today. "We either cut it off at its source now or it will be out of control - if it is not out of control now."

LaFalce fired a barrage of pointed questions at Assistant Treasury Secretary Gregory Baer, who testified that certain provisions of the Internet Gambling Funding Prohibition Act could violate US obligations under international treaties.

Proposed by LaFalce and Committee Chairman James Leach, Republican-Iowa, the legislation would bar online gambling operations (including casinos, off-track betting sites and other enterprises) from receiving credit card payments. The legislation would further require US-based international financial institutions to refuse most types of loans to countries that either facilitate or readily permit online gambling.

The latter provision, Baer testified, could have a severely detrimental effect both on US foreign relations and on the administration's stated international goals of "poverty reduction, economic growth and the stabilization of global financial markets."

While Baer testified in favor of the underlying intent and methodology of the legislation, he strongly urged the committee to remove those provisions.

Supporters of the bill lashed out at the suggestion, contending that the international sanctioning provision represent the enforcement teeth of the legislation.

"I just don't believe that the administration is sitting back and letting this drift," Rep. Marge Roukema, R-New Jersey, said following Baer's testimony. "If you don't have enforcement how do you have (effective) legislation?"

Also drawing criticism from the members of the committee was Deputy Assistant Attorney General Kevin Di Gregory, who testified that the scope of the legislation should be narrowed to apply only to illegal online gambling, rather than to all Internet gambling.

Di Gregory also insisted that the legislation should be made technology-neutral, so that it applies to interstate wagers placed over the phone, over the Internet or by any other means.

Roukema and others on the panel accused Di Gregory and Baer of pointing out problems with the legislation without offering viable alternatives to curb the rise of online gambling.

Committee members from both parties also criticized the administration as a whole for not submitting its own Internet gambling proposal, and choosing instead to punt the issue to Congress. Leach and LaFalce said that that failure to act was particularly galling in light of the work done by the National Gambling Impact Study Commission, which was convened to study, among other things, the growth and impact of Internet gambling.

Although that body recommended in June that Congress ban most forms of Internet gambling, the Administration has been largely invisible in the ensuing congressional debate, Leach and LaFalce contended.

In addition to attacking the administration for failing to act, LaFalce also today criticized online gambling legislation approved by the House Judiciary Committee earlier this year.

Although ostensibly an online gambling ban, that legislation provides significant loopholes to horse and dog racing operations and other so-called pari-mutuel betting enterprises.

Both Baer and Di Gregory said the administration strongly opposes that bill because, they say, it would actually serve to increase online gambling activities.

Reported by Newsbytes.com, www.newsbytes.com.

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