U.S. House Measure Would Clamp Down on Online Gambling Sites

A bill to prohibit online gambling in the U.S. and prevent financial transactions with offshore online gaming sites is scheduled for a July 12 vote in the U.S. House of Representatives.

The bill combines two measures sponsored by Republican Representatives James Leach of Iowa and Bob Goodlatte of Virginia, and would make it clear that gambling over the Internet is illegal under U.S. law.

“Gambling in the United States is illegal unless regulated by the states,” Goodlatte told the House Rules Committee today. “This legislation honors and recognizes that.”

Leach and Goodlatte predicted House approval for the measure, which would go next to the Senate, where similar measures have failed.

The House bill would prevent use of credit cards for Internet gambling by making it unlawful for credit-card companies to collect payments for online-gaming sites. It requires financial services firms to cooperate with law enforcement in shutting down money transfers to illegal gaming sites.

Online gambling is illegal in the U.S. under a 1961 law against using telephone lines to place interstate bets. The Justice Department uses the law to prosecute Web site operators off shore as well as U.S. based companies that foster online gambling by accepting advertising or providing Internet links.

The Bush administration supports the legislation, as do U.S. professional sports leagues, including Major League Baseball and the National Football League, U.S. financial services firms and 48 of 50 state attorneys general, Leach said.

Billions Dollar Industry

Gambling on the Internet is a $12 billion-a-year business that is growing rapidly offshore. Internet-based casinos rake in billions from U.S. gamblers. MGM Mirage and Harrah’s Entertainment Inc. among others are lobbying Congress to study whether online gaming should be legalized in the U.S.

“This problem has only magnified,” Goodlatte said.

Representative Barney Frank, a Massachusetts Democrat, said the legislation is an inappropriate attempt by some in Congress to regulate what people do on the Internet.

“In general, it seems to me, if people want to do it, we should let them,” Frank said. “We are talking about criminalizing people’s individual behavior because some of us disapprove of what they are doing.”

The bill leaves in place an exemption for U.S. horseracing, a provision that has drawn protests from dog track and jai alai interests. Representative John Conyers, an Illinois Democrat, plans to offer an amendment that would strip the exemptions out of the bill.

“This bill claims to ban all forms of online gambling, but it specifically exempts online betting on horseracing and state lotteries,” Conyers said. The Republican authors of the bill oppose Conyers’s amendment.