Online gaming shares skyrocketed on Thursday after proposed anti-Internet gambling legislation was stalled during a debate by the House Judiciary Committee's Subcommittee on Crime, Terrorism, and Homeland Security.
Reports indicate that the Internet Gambling Prohibition Act (H.R. 4777), introduced by Republican senator Bob Goodlatte, was scrutinized during a meeting of the Subcommittee Wednesday as politicians discussed the exclusion of specific forms of gambling and the difficulties the bill would pose for U.S. banks.
PartyGaming and 888 Holdings are listed on the London Stock Exchange. Both companies are based offshore but derive a large majority of their profits from customers in the United States, which is only just beginning to sort out the legal status of Internet wagering with the introduction of two bills – H.R. 4777 and H.R. 4111, The Unlawful Internet Gambling Act.
Members of the Subcommittee were locked in debate over H.R. 4777's exemption of certain types of gambling, namely wagers placed on horse races, called "pari-mutuel wagering," which is already governed by a different set of laws.
Officials also argued the practical difficulties the bill presents to American banks, which would be faced with implementing the new law when trying to determine which clients made payments to gambling sites.
Sam Vallandingham, vice president in the chief information office of the First State Bank of Barboursville, W.Va., said, "As a representative of the (Independent Community Bankers of America), I urge you to reject proposals to use the banking system to restrict Internet gambling unless there is a reasonable chance the measures will be effective and will not add to the tremendous regulatory burden of our nation's financial institutions."
Certain members of the Subcommittee supported the establishment of a commission to study the multi-billion dollar Internet gambling industry, and believe that regulation would be the most logical and effective way to control it. The two, most prominent supporters of regulation were Democratic Representatives Robert "Bobby" Scott of Virginia and John Conyers Jr. of Michigan.