Internet Gambling: Recent Legislative Activity

A story in today's BNA Electronic Commerce & Law Report mentions the actions of the House Judiciary Committee last Thursday (May 25) in reporting out to Congress two bills dealing with Internet Gambling.

The first, HR 4777, passed out of committee 25-11. This bill, known as the Internet Gambling Prohibition Act, amends the federal Wire Act (18 U.S.C. 1084) to include internet activities. It also prohibits gambling establishments from accepting payments from the U.S. in connection with unlawful gambling activity.

The text can be found here: http://thomas.loc.gov/cgi-bin/query/F?c109:1:./temp/~c109TEnTli:e10171

Of course, one problem is that the online gaming establishment will be offshore, and probably not within the jurisdiction of U.S. courts. In that case, the bill provides for a procedure for relief against an "interactive computer service" that is limited to disabling a link to the site. I am not certain how this will be done, or whether this has any hope of being effective from a technological standpoint. The fact that about 1/3 of the committee voted against this bill may suggest some reservations about enforceability, or it may represent some discomfort with expanding limits on internet gambling.

Significantly, this bill does not "ban" internet gambling: that issue is left to the states and the tribes. But query: will this bill in fact expand Internet gambling by allowing tribal authorization?

This bill merits further study and careful watching.

The other bill, HR4411, is the "Unlawful Internet Gambling Enforcement Act of 2006". This bill also makes it illegal to accept payments for unlawful gambling transactions, and it also imposes obligations on electronic payment systems to identify and block prohibited transactions. According to the BNA report, this bill came out on a voice vote.

The text of HR4411 can be found here: http://thomas.loc.gov/cgi-bin/query/F?c109:2:./temp/~c109k8Sh4N:e32244

Congress has toyed with provisions like these since 2003, but so far there has been little movement. The fact that these bills have made it out of committee suggests that there may be interest in doing something about this growing phenomenon, which is estimated at $12 billion in patron losses for 2005. However, it remains to be seen how the votes will stack up, and moreover how the gaming establishment will deal with these bills. More to come on this.

EAM