Bill seeks to clarify illegal online gambling

Hands tied

Last week Rep. Pete Sessions (R-Texas) introduced a bill to modify the Unlawful Internet Gambling Enforcement Act to better define illegal online gambling.

The bill, H.R. 6663, is titled the Unlawful Internet Gambling Enforcement Clarification and Implementation Act of 2008. Its purpose is to modify the language in the UIGEA to better clarify what is illegal online gambling.

The bill seeks to limit the definition of illegal online gambling to sports betting, which is illegal in 49 out of 50 U.S. states. Language in the bill also points out that the ambiguity in the definition of illegal online gambling has caused legitimate companies to leave the U.S. online gambling market and made it impossible to implement the UIGEA.

According to the bill, Congress found the following:

  • Prior to the passage of the UIGEA, Public Law 109-347, on Oct. 13, 2006, Federal law was both vague and outdated regarding Internet gambling activities, as Federal criminal gambling statutes were passed decades before the commercial use of the Internet.
  • To date, all Federal Internet gambling prosecutions have involved sports betting, creating a lack of authoritative court decisions on the applicability of other federal criminal statutes to Internet poker and casino-style gambling.
  • Sports betting, which is illegal in 49 of the 50 States, is viewed as particularly harmful because of its potential adverse impact on the integrity of professional and amateur sports, and is the one form of gambling where there is settled Federal case law clarifying it as illegal on the Internet.
  • Many European Internet gambling companies offering services not including sports betting to persons in the United States were fully listed on the London Stock Exchange, and thereby subject to high standards of transparency and scrutiny, but upon receiving clarification of United States law regarding Internet gaming through the enactment of the UIGEA, these companies closed their sites to persons in the United States.
  • Continued legal jeopardy for companies that made a good faith effort to comply voluntarily with clarified United States law following the passage of the UIGEA punishes behavior that the law intended to foster and inadvertently rewards continued noncompliance by other foreign entities.
  • In light of the foregoing and in deference to long-standing constitutional requirements of fair notice and transparency in the criminal law, the Congress finds it necessary to clarify that criminal statutes applicable to gambling do not apply to any person who offered Internet gambling services that did not include sports betting prior to October 13, 2006, and who ceased offering Internet gambling services to persons in the United States upon passage of the UIGEA.
  • To effect the purposes and intent of the UIGEA, it is the sense of the Congress that the Attorney General should focus any prosecutorial efforts on those persons who: a) offer Internet sports betting in the United States; or b) process payments for illegal Internet sports betting in the United States.

Despite the efforts of those who drafted the bill to clarify the online gambling laws in the United States, it isn't necessarily finding support in the online gambling world. The Poker Players Alliance released the following statement from its chairman, Alfonse D'Amato:

"Congressman Pete Sessions has been and continues to be a good friend to poker players who want the freedom to play America's greatest card game. His dedication to the conservative principles of individual freedom and personal responsibility are unparalleled in the U.S. Congress.

We are, however, puzzled by the introduction of H.R. 6663 and by the purpose of this legislation. While we agree with several findings in the bill that correctly identify the illegality of sports wagering, the PPA remains concerned with the implication H.R. 6663 asserts in that the Unlawful Internet Gambling Enforcement Act (UIGEA) has made Internet poker an unlawful activity that needs special protection from prosecution.

Previous federal case law (re: Mastercard 2002) made it clear that existing federal criminal law (WIRE Act of 1961) applies only to Internet sports wagering, and not to Internet poker. Further, the UIGEA itself states, 'No provision of this subchapter shall be construed as altering, limiting, or extending any Federal or State law.'

Thus, H.R. 6663 only confuses a clear judicial standing on this matter.

American poker players and American financial institutions were not well served by the ambiguity and unclear nature of the UIGEA passed two years ago, and H.R. 6663 does nothing to clarify the UIGEA.

At this critical time for one of America's great pastimes, it is unfortunate that H.R. 6663 in its current form only adds to the existing confusion and contradicts its own rule of construction by implying in its findings that the sites on which millions of Americans currently play are offering poker services in defiance of federal law.

The PPA cannot support this bill in its current form. We will however, continue to advance other legislative priorities that Rep. Sessions supports, such as H.R. 2610, which recognizes poker as a game of skill and preserves the right of adults to enjoy poker on the Internet."

The House is currently on a break for the summer and will resume again in September. After it was introduced on July 30, the bill was referred to the Financial Services and the Judiciary committees.

The committees will study the bill when the House is back in session.

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