This is part 1 of a multipart series of articles regarding proposed anti-gambling legislation. In this article I discuss the proposed legislation, what the politicians say it does, some facts about the current state of online gambling, and what the bills really propose.
The legislators are trying to protect us from something, or are they? The whole thing seems a little confusing to say the least.
The House, and the Senate, are once again considering the issue of “Online Gambling”. Bills have been submitted by Congressmen Goodlatte and Leach, and also by Senator Kyl.
The bill being put forward by Rep. Goodlatte has the stated intention of updating the Wire Act to outlaw all forms of online gambling, to make it illegal for a gambling business to accept credit and electronic transfers, and to force ISPs and Common Carriers to block access to gambling related sites at the request of law enforcement.
Just as does Rep. Goodlatte, Sen. Kyl, in his bill, Prohibition on Funding of Unlawful Internet Gambling, makes it illegal for gambling businesses to accept credit cards, electronic transfers, checks and other forms of payment, but his bill does not address the placement of bets.
The bill submitted by Rep. Leach, The Unlawful Internet Gambling Enforcement Act, is basically a copy of the bill submitted by Sen. Kyl. It focuses on preventing gambling businesses from accepting credit cards, electronic transfers, checks, and other payments, and like the Kyl bill makes no changes to what is currently legal.
According to Rep. Goodlatte “While gambling is currently illegal in the United States unless regulated by the states, the development of the Internet has made gambling easily accessible. It is common for illegal gambling businesses to operate freely until law enforcement finds and stops them.”
In fact, American courts have determined that the Wire Act makes only Sports Betting illegal, and even then only across telephone lines. Very few states have laws that make online gambling illegal, some states and Tribes have taken steps to legalize online gambling, and even the Federal government recognizes some forms of online gambling as being legal.
Goodlatte himself says his bill “cracks down on illegal gambling by updating the Wire Act to cover all forms of interstate gambling and account for new technologies. Under current federal law, it is unclear whether using the Internet to operate a gambling business is illegal”.
Goodlatte’s bill however does not “cover all forms of interstate gambling” as he claims, but instead carves out exemptions for several forms of online gambling such as state lotteries, bets on horse racing, and fantasy sports. Even then, his modifications to the Wire Act do not make online gambling illegal, they make it illegal for a gambling business to accept online bets where a person risks something of value “upon the outcome of a contest of others, a sporting event, or a game predominantly subject to chance”, except of course if it is a state lottery, horse race, fantasy sports, or one of a few other situations.
The truth of the matter is that most online gambling businesses have located in other countries specifically to avoid the gray area that is the current state of online gambling in the US. As a result, there is little that law enforcement can do to enforce these laws. Trying to make the laws tougher, and providing for stiffer penalties, will not make them easier to enforce.
As well, most, if not all, banks and credit card companies refuse to transfer money to an online gambling business now, as a result of pressure from the federal government. As a result, alternative payment systems sprang up to fill the void.
Senator Kyl is equally misleading in his statements. From his proposed bill, “Internet gambling is primarily funded through personal use of payment system instruments, credit cards, and wire transfers.” But as we already know, most credit cards in the U.S. refuse attempts to fund a gambling account.
Also from the Kyl bill, “Internet gambling is a growing cause of debt collection problems for insured depository institutions and the consumer credit industry.” If the credit card companies and other financial institutions in the U.S are not allowing the funding of gambling, how can it be “a growing cause of debt collection problems”. And since when do we need legislation in order for the financial industry to protect itself from high risk debt. If the financial industry was accepting gambling debts and these gambling charges were a problem for them, wouldn’t they just stop accepting them?
Like Rep. Gooddlatte, Rep. Leach and Senator Kyl carve out exemptions for betting on horse racing, for fantasy sports and for buying and selling securities. Unlike Rep. Goodlatte however, Rep. Leach and Sen. Kyl do not exempt state lotteries from their prohibition of online gambling.