Goodlatte Prepares New Bill to Ban Internet Gambling
by Fred Faust, RGTonline.com
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TORONTO – Representative Robert Goodlatte is preparing to bring his Internet Gambling Prohibition Act back to the U.S. Congress, but this time with tactical changes that he thinks will win enough votes to pass it. That’s the word from Frank Fahrenkopf, director of the American Gaming Association.
Goodlatte, Republican from Virginia, led last year’s unsuccessful effort to get the bill through Congress. It was a companion to the bill that Sen. Jon Kyl, Republican from Arizona, got through the U.S. Senate in November 1999.
Fahrenkopf, speaking at the Global Interactive Gaming Summit & Expo here Wednesday, said he had a long meeting with Goodlatte Friday. He said Goodlatte told him that he’s met with U.S. Attorney General John Ashcroft and has Ashcroft’s support for his bill.
That’s significant, Fahrenkopf said. The Justice Department under President Bill Clinton opposed the Kyl/Goodlatte bills, believing that the old Wire Act, perhaps with modifications, was sufficient to prosecute casino gambling on the Internet.
Ashcroft, a right-wing Republican, was a Senator when Kyl’s bill was passed by the Senate, and Ashcroft supported it. This time, Fahrenkopf said, Kyl has said that the House should pass the bill before he introduces it again in the Senate.
Goodlatte told Fahrenkopf that one reason for the bill’s defeat last year was that it put an enforcement burden on Internet Service Providers. That cost it some support in the House.
So this time, Fahrenkopf said, Goodlatte will delete that part of the bill and replace it with the approach favored by Rep. Jim Leach, an Iowa Republican. Leach wants to go after the financial lifeblood of online gambling by declaring that credit card debts incurred from Internet gambling would be uncollectable.
The good news for the online gaming industry is that Visa and MasterCard don’t like the idea, according to Fahrenkopf. They think it would be restraint of trade.
Another problem for Goodlatte last year was opposition from state lotteries, some of which want to sell lottery tickets online. Fahrenkopf said a compromise is in the works – Goodlatte’s new bill would reportedly let state lotteries sell tickets online.
Fahrenkopf said the AGA, the main casino industry trade group, would wait to see the bill before taking a position. In previous years, he said, the AGA agreed not to oppose the bill.
The conference seminar that Fahrenkopf addressed was devoted to favorable Internet gaming legislation in Nevada and New Jersey, but the federal government’s position on the subject cast a giant shadow over efforts in those states to legalize it.
Brian Sandoval, chairman of the Nevada Gaming Commission, said he expects to meet with Ashcroft soon to get the Justice Department’s views on whether the Wire Act, a 1961 law, applies to casino gambling on the Internet. Monday, Nevada’s legislature passed a bill that could lead to online gaming licenses for resort hotels in Nevada.
Sandoval told the conference attendees that, if Nevada Gov. Kenny Guinn signs the bill, the Commission will hold hearings on the subject beginning in July. The bill does not directly legalize Internet gaming. It gives the Commission wide discretion, directing the Commission to issue licenses only if it finds that interactive gaming can comply “with all applicable laws” and can be properly regulated.
If the federal government decides that interactive gaming is illegal, Sandoval said, the new Nevada legislation could be moot.
“We would never, never go forward in light of any type of federal prohibition,” Sandoval said.
Even if Nevada is able to proceed, he said, the process will be slow and the regulation intense.
“It’s going to take as long as it takes,” Sandoval said. “Our timetable will be when and if the technology is there to properly regulate interactive gaming. We are going to take a cautious, slow approach . . . .”
“We are going to be very very cautious and strict about border control,” he added, referring to the need to keep minors from gaming online and to prevent access by people who live in states or countries where online gaming is illegal.
Sandoval said the backgrounds of people participating in any aspect of online gaming will be thoroughly investigated, and so will the hardware and software.
“We will have our own interactive gaming lab and we will inspect every piece of every system,” he said.
Another speaker at the Toronto conference, Anthony Impreveduto, was far more enthusiastic and passionate about licensing and regulating interactive gaming than Sandoval or Fahrenkopf. Impreveduto is the member of the New Jersey Assembly who introduced a bill this year to legalize interactive gaming by Atlantic City casinos.
Impreveduto, a Democrat, said his bill never got a hearing in the Republican-controlled New Jersey legislature. He told RGT Online that he will re-introduce it in January. Democrats may control the legislature by then, he said, and the bill would be more likely to pass.
He said it would be a mistake for Congress to try to prohibit interactive gaming.
“Prohibition’s not going to work,” he said. “We forget in the U.S. that we had prohibition in the 20s on alcohol and what happened then? We should have learned our lesson once, we didn’t.
“All prohibition will do is force it further underground and hurt more people,” he said.
“Billions of dollars are reportedly being bet over the Internet,” Impreveduto told the conference, “with very little if any oversight, or guarantee that the operators of these sites are fair and honest. . . .
“We heard our first speaker (Fahrenkopf) talk about effective controls. But what controls are there now without licensing? What controls are there now without regulation?”
His bill, he said, would have enabled great strides in protecting children from online gaming. He compared such regulation to keeping kids out of land-based casinos in Atlantic City.
“Maybe we can’t get 100 percent of the kids off the Internet who are gambling,” he said, “but we can sure as hell get 95-98 percent of them off. Right now in New Jersey, we’re taking tens of thousands of kids off the land-based casino floors on a yearly basis. How many of them would walk in unless you protect against them?”
The Toronto conference, which ends today, may be the largest one ever held for the Internet gaming industry. Nearly 800 people – including online casino and sports book operators and the developers of their software – paid $1,200 each to attend |
