Playing games with Internet gambling law

By Doug Carlson – Southern Baptist Ethics & Religious Liberties Commission

Internet gambling—illegal in the United States—suffered a serious blow in June as long-delayed regulations to put the squeeze on industry profiteers and consumers evading the law finally took force. The regulations are the cornerstone of a 2006 law to block U.S.-based customer transactions to offshore online gambling merchants, thereby slowing cash flow offshore to a trickle. The plan is working.

Yet some in Washington are already plotting its undoing. Congress is considering legislation that not only would repeal the law that authorized the new regulations but also would leap a frightful step further—legalize Internet gambling. The Internet Gambling Regulation, Consumer Protection, and Enforcement Act (H.R. 2267) sailed through the House Financial Services Committee last week in a 41-22 vote. Seven Republicans gave their approval, while four Democrats held the line in opposition.

To see how all members of the Financial Services Committee voted on H.R. 2267, click here (32 KB PDF).

Committee chairman Barney Frank’s (D-MA) bill would effectively repeal the Unlawful Internet Gambling Enforcement Act (UIGEA), which passed by wide margins as part of a broader bill in the waning hours of Congress in 2006—409 to 2 in the House and with no objections in the Senate. The Ethics & Religious Liberty Commission ardently supported the bill.

UIGEA puts enforcement teeth to the industry that was banned under a 1961 law on wireless communication, long before the advent of the Internet. Under regulations based on the law, banks and other financial institutions are now supposed to have in place tools to block transactions between U.S.-based customer accounts and offshore gambling merchants. Those efforts would unravel under the Frank bill.

But Rep. Frank and cohorts are not interested merely in legalizing and regulating online gambling, the twin pillars of his bill. They are hoping the government will cash in with a slice of the multi-billion-dollar pie. For this reason, the Frank bill by itself serves the government minimal interest. It is only part one of a two-part act.

Act two is taxation. This is accomplished through a second bill, H.R. 4976. When Congress reconvenes in September, the House Ways and Means Committee is expected to take up committee chairman Jim McDermott’s (D-WA) bill that would tax online gambling, giving the debt-laden government—$13 trillion in the red and counting—more of Americans’ dollars to fritter away.

Their defense is simple. As long as the government keeps a watchful eye on the offshore online gambling sites, and as long as the federal coffers are swimming in a new revenue stream, then the industry is basically harmless, perhaps even good for society. But this rationalization is unfounded.

Legalizing online gambling is a predictable wager. As evidenced by countless sad testimonials, the ease and addictive power of point-and-click gambling from the privacy of a personal computer all too often yields financial ruin and broken families. Rolling the dice on Internet gambling is no game. Putting the government’s pocket book ahead of the American people’s best interests is always a losing wager. The 41 representatives who voted last week in committee to overturn the 2006 tough-on-illegal-gambling law should be held to account.

If you agree, please tell your representative that you oppose the Frank bill (H.R. 2267), the McDermott bill (H.R. 4976), and any other legislation to legalize online gambling.

To see how all members of the Financial Services Committee voted on H.R. 2267, click here (32 KB PDF). 

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