New Law Cripples Internet Gambling
Banks Are Barred From Handling Transactions
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Saturday, October 14, 2006
Placing bets over the Internet was effectively criminalized by the federal government yesterday, as lawmakers work to eliminate an activity enjoyed by as many as 23 million Americans who wagered an estimated $6 billion last year.
Attached to a port-security bill signed by President Bush yesterday was the Unlawful Internet Gambling Enforcement Act, which prohibits online gamblers from using credit cards, checks and electronic fund transfers to place and settle bets. The law puts enforcement on the shoulders of banks and other U.S. financial institutions, some of which fought the legislation.
The bill's sponsor, Rep. Robert W. Goodlatte (R-Va.), said he opposes all gambling, citing its "ill effects on society," but particularly Internet gambling, which led him to draft the legislation in the summer. Senate Majority Leader Bill Frist (R-Tenn.) attached Goodlatte's bill to the port-security measure to ensure its passage and Bush's signature.
While proponents decried the effects of gambling on society, opponents pointed to the enormous popularity of Internet gambling and compared the new law to the Prohibition amendment of 1919, which led to the rise of illegal speak-easies and organized crime.
"We're going to have Prohibition, and what happened then?" said champion poker player Annie Duke, a former University of Pennsylvania doctoral candidate who began playing professionally in 1994. "We had people running around with tommy guns and drinking moonshine because they weren't given a safe product."
The new law is potentially crippling to a worldwide industry whose biggest customer has been the United States. Already, several online wagering businesses have pulled their operations out of the United States and some have collapsed, including publicly traded companies in Britain, where online betting is legal and regulated. International online gambling businesses have been watching closely as U.S. regulatory and law enforcement officials stepped up their campaign against online wagering in recent months.
