Bob Inglis

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Internet Gambling

Background

According to a December 25, 2005 New York Times article, Americans wager approximately 4 to 6 billion dollars a year on Internet gambling. While federal law already outlaws most internet gambling enterprises; the problem has been with enforcement. The biggest obstacle to effective enforcement is the fact that most Internet gambling enterprises are based offshore, beyond the reach of U.S. authorities. Another key issue is whether the Wire Act, the primary federal anti-gambling statute, can be used against forms of gambling other than sports betting. The task of answering this question has been complicated by the legalization of various forms of gambling in different jurisdictions, and by the use of electronic communications and other technological advances in connection with off track betting and other forms of gambling that are legal in some states and illegal in others.

The Wire Act, 18 U.S.C. 1084

The relevant portion of the Wire Act states that:

• Whoever being engaged in the business of betting or wagering knowingly uses a wire communication facility for the transmission in interstate or foreign commerce of bets or wagers or information assisting in the placing of bets or wagers on any sporting event or contest, or for the transmission of a wire communication which entitles the recipient to receive money or credit as a result of bets or wagers, or for information assisting in the placing of bets or wagers shall be fined or under this title or imprisoned not more than two years of both.

Legislative History

• On 11/18/2005, Rep. James Leach (R-IA), introduced the Internet Gambling Prohibition and Enforcement Act (H.R. 4411). This bill sought to ban gambling businesses from accepting checks, credit cards, electronic fund transfers in connection with internet gambling.
• On 2/16/2006, Rep. Bob Goodlatte (R-VA) introduced the Internet Gambling Prohibition Act (H.R. 4777). This bill sought to amend the Wire Act to make it clear that the Act was not limited to sports gambling and that it applied to all forms of internet gambling.
• Both bills passed out of the House Judiciary and Financial Services Committees, respectively. The House then merged the two bills and passed them as H.R. 4411.
• On July 11, 2006, this bill passed the House floor by a bipartisan vote of 317 to 93.

Current Legislation

• Title VIII of the SAFE Port Act (H.R. 4954) as reported out of conference addresses illegal internet gambling.
• Title VIII of the H.R. 4954 prohibits gambling businesses from accepting checks, credit cards, and electronic transfers in connection with illegal Internet gambling. In doing so, it uses much of the language of H.R.4411, but does not contain the amendments to the Wire Act or most of the other provisions incorporated into H.R. 4411 from H.R. 4777.
• Title VIII exempts intrastate and intratribal Internet gambling operations that feature age and location verification requirements.
• It authorizes the federal and state authorities to sue to prevent or restrain violations of its provisions, although it limits the relief available against Internet service providers both under the title and under the Wire Act unless they are directly involved with an unlawful Internet gambling Web site.
• It is generally understood that like H.R. 4411 and H.R. 4777, the SAFE Port Act provisions do not apply to individual bettors.

Inglis Position

Every state holds the power to allow or prohibit gambling of any kind within the borders of that state. The problem with internet gambling is that companies operate their customer service and financial operations from foreign locations. This allows them to escape U.S. tax liability and operate without any form of regulation. The ills of this form of unregulated gambling are manifold. Not only can it be highly addictive, but it fails to block access to children, and provides tempting opportunities for organized crime. The House passed version of Internet Gambling Prohibition and Enforcement Act sought to bring the current ban against interstate gambling in line with new technologies. That is why I supported H.R. 4411 and why I became a cosponsor. I would like to have seen the WIRE Act updates also included in the internet gaming provisions of the SAFE Ports Act, but I still believe the legislation is a good start and look forward to the President signing it into law.

 

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