Bill to Ban Gambling Online Gets 4th Chance
Thursday, May 25, 2006
Online poker players will have to fold their hands if a Virginia congressman gets his way.
Today, the House Judiciary Committee will mark up a bill introduced by Rep. Robert W. Goodlatte (R) that would ban much online gambling, including bets on sporting events and games of chance -- namely poker, which has enjoyed a boom in recent years.
The legislation could get an unexpected boost from the Jack Abramoff scandal. The disgraced lobbyist was key to blocking one of Goodlatte's three previous attempts to ban Internet gambling, and backlash over corruption charges could help the current effort.
The bill would update the Federal Wire Wager Act, which prohibits gambling over telephone lines but may not apply to Internet gambling because not all Web traffic travels over phone lines. It also would force banks to block transactions related to online gambling and would empower law enforcement agencies to force Internet service providers to remove or disable links to gambling sites.
"I am a big advocate of opening up the Internet to all kinds of legitimate uses," said Goodlatte, who is co-chairman of the Congressional Internet Caucus. "But we don't want the Internet to become the Wild West of the 21st century." Goodlatte said he opposes gambling because it leads to "a whole host of ills in society."
The bill effectively would prevent state lotteries from taking their games online, because technology does not exist to keep gambling within a state. Fantasy sports leagues would be exempt. Goodlatte said his bill is neutral on parimutuel horse wagering, which has an online component that is the cause of an ongoing struggle between Congress and the Justice Department.
The legislative fight over an earlier version of Goodlatte's bill was at the center of the Abramoff lobbying scandal, which led to guilty pleas by Abramoff and four former associates, including three former congressional aides. Abramoff's client, a gambling services company, opposed the bill, and the lobbyist funneled $50,000 of the client's money to the wife of a key aide to former House majority leader Tom DeLay (R-Tex.). The aide, Tony Rudy, pleaded guilty to charges that he conspired with Abramoff to corrupt public officials and defraud his clients. Questions about DeLay's role contributed to DeLay's decision to leave Congress.
The current bill is backed by religious groups such as the Southern Baptist Convention, professional sports leagues such as the NFL and online-auction giant eBay Inc. On the other side are members of Congress from casino-supported Nevada, who introduced rival legislation; casinos; an organization of small banks that says its members do not have the manpower to block all gambling transactions; and a group that hopes not to get dealt out, the Poker Players Alliance.
Poker players argue that their pastime should be excluded from Goodlatte's ban because it is a game of skill, not chance. Last month, three World Series of Poker champions visited a House office building to defend their game against attempts to ban it online.
"We don't believe that simply putting the word 'Internet' in front of 'poker' should make the game suspect," said Michael Bolcerek, president of the Poker Players Alliance. "Poker is a skill game. You can influence events. The original cards are random, but you can influence your success or failure throughout the hand" by learning betting patterns of fellow players, bluffing and other techniques, he said.
Bolcerek said he prefers a weekly sit-down poker game with buddies to playing online.
Goodlatte, who said he played poker as a young man but never for money, disagreed. Poker is "absolutely a game of chance," he said.
Both sides estimate that about $12 billion a year is spent in online gaming.
Three House members from Nevada -- Jon Porter (R), Shelley Berkley (D) and Jim Gibbons (R) -- yesterday introduced legislation for an 18-month study of online gambling and whether games could be regulated and taxed, as they are in Britain. Goodlatte said such regulation could not exist here because gambling is regulated at the state, not federal, level.
The Independent Community Bankers of America, a group of about 5,000 small banks that opposes Goodlatte's bill, said previous attempts got bogged down in complications and had little chance of passing. But Stephen J. Verdier, senior vice president for congressional affairs for the small bankers, said the Abramoff scandal "has raised the political saliency" of Goodlatte's bill. "It's kind of got us a little worried, frankly," he said.
Though banks have the right to examine all transactions and block them if required by law, they are in the business of making customer payments as quickly and accurately as possible, Verdier said, "not trying to decide if you're a good person or a bad person."
Staff writer James V. Grimaldi contributed to this report.