House votes to restrict Net gambling

The U.S. House of Representatives votes to slap broad restrictions on Internet gambling by targeting credit cards and bank accounts that Americans use to pay offshore casinos.

Declan McCullagh Former Senior Writer
Declan McCullagh is the chief political correspondent for CNET. You can e-mail him or follow him on Twitter as declanm. Declan previously was a reporter for Time and the Washington bureau chief for Wired and wrote the Taking Liberties section and Other People's Money column for CBS News' Web site.
Declan McCullagh
3 min read
The U.S. House of Representatives voted on Tuesday evening to slap broad restrictions on Internet gambling by targeting credit cards and bank accounts that Americans use to pay offshore casinos.

After spirited debate over amendments to the legislation, the House voted 319 to 104 for the final version, which did not include criminal penalties but did cover credit card payments.

Rep. Michael Oxley, R-Ohio, chairman of the Financial Services committee, said restricting offshore gambling was necessary to thwart al-Qaida and other terrorist cells. "Internet gambling services (are) a haven for money launderers," Oxley said during the floor debate. "Offshore Internet gambling sites can be a haven for terrorists to launder money."

The "Unlawful Internet Gambling Funding Prohibition Act" would give federal regulators six months to devise regulations to restrict financial transactions related to Internet gambling. The regulations must be "reasonably designed to identify" and "reasonably designed to block" credit card and other financial transactions.

Opponents criticized the bill during three hours of debate, predicting that it would legitimize Internet betting on horse racing, greyhound racing, lotteries and other types of gambling not covered by the legislation. The bill does not regulate "any lawful transaction with a business licensed or authorized by" a state government.

"We're going to ban Internet gambling except for horse racing. Why? Well, it's because the horse-racing lobbyists and the dog-racing lobbyists say that's what we ought to do," said Rep. John Conyers, D-Mich. "Why did you write a bill like this? This is a bill that expands gambling by accepting two industries."

Rep. Spencer Bachus, R-Ala., said enacting a law was necessary to protect America's children. "These sites specifically target preteen-age children. They're becoming addicted to it, and they turn to crime...If dogs, cats, rabbits, any animal--if they protect their youth, at least we can rise to that level and protect the youth of our country."

Many forms of online gambling are already illegal in the United States, but enforcing these laws--especially against a consensual activity that Americans do from the privacy of their own homes--has proven tricky for police and prosecutors.

One amendment that the House rejected by voice vote would have removed credit cards from the sweep of the legislation. The justification for the proposal, by Rep. Sheila Jackson-Lee, D-Texas, was that minors would unlikely have their own credit cards.

A second failed amendment, rejected by a vote of 186-237, would have deleted the language permitting "any lawful transaction with a business licensed or authorized by a state." It was sponsored by Rep. James Sensenbrenner, R-Wis., who opposed the underlying bill in part because it did not go through the judiciary committee that he chairs.

"We might as well just call this bill the horse racing prohibition act because it will literally kill the entire industry," Rep. Harold Rogers, R-Ky., said of the amendment. "It is intended to make current legal activities illegal (and) would be catastrophic to the $34 billion horse-racing and breeding industry--especially to the states who rely on it for tax revenue."

The Senate has held hearings on similar proposals but has not approved its own version.