Details released on new U.S. online gambling bill

The office of U.S. Congressman Bob Goodlatte (R - Vir.) has released additional details regarding the bipartisan Internet Gambling Prohibition Act, H.R. 4777. News of the bill, which is co-sponsored by Congressman Rick Boucher (D - Vir.), first surfaced yesterday causing shares of U.S.-facing Internet gambling firms on the London Stock Exchange to fall.

H.R. 4777 seeks to crackdown on offshore Internet gambling firms that target U.S. residents by prohibiting gambling activities that cross state lines using phone lines and Internet technologies. Goodlatte alleges these activities funnel billions of dollars out of the U.S. economy each year, serve as a vehicle for money laundering, undermine families and threaten the ability of states to enact and enforce their own laws.

"For too long our children have been placed in harm's way as online gambling has been permitted to flourish into a $12 billion industry," says Goodlatte. "The Internet Gambling Prohibition Act brings the current ban against interstate gambling up to speed with the development of new technology."

Current laws in the United States fail to address the realities of today's global gambling industry. The closest comparable statute is the Wire Act, which prohibits gambling over telephone wires. Goodlatte and Boucher are seeking to update the Wire Act to reflect the technological advances of the Internet, and explicitly prohibit gambling using the Web and other new technologies.

"The explosive growth of the Internet has provided a means for gambling operations to evade existing anti-gambling laws," Boucher stated. "These Internet gambling Web sites typically operate offshore and often serve as a prime vehicle for money laundering and other criminal enterprises. Our bill sensibly updates federal law to keep pace with new technologies by bringing the Internet within the fold of the anti-gambling restrictions that govern telephones."

H.R. 4777 allows states to continue to regulate gambling in their jurisdictions using tight controls established to ensure gambling activities do not extend beyond their borders or to minors. It also prohibits a gambling business from accepting certain forms of payment, such as credit cards, checks, and wire and Internet transfers, in illegal gambling transactions. The legislation allows federal, state, local and tribal law enforcement officials to seek injunctions to prevent and restrain violations of this Act, and obtain cooperation in the fight against illegal gambling. It also increases the maximum prison term for a violation of this Act from two to five years.

According to Goodlatte's office, similar bipartisan legislation was introduced in 2000 and 2001 by Goodlatte and Boucher but failed to pass due to a "campaign of misinformation" led by gambling industry supporter Jack Abramoff, a former Republican lobbyist who once served as an advisor to technology firm eLottery. Abramoff was recently implicated in a high-profile bribery scandal. He pleaded guilty to fraud in early January 2006 and is currently standing trial. His testimony threatens to implicate scores of legislators and officials across Washington, D.C.

Please see yesterday's article relating to this issue at Internet Shares Fall As U.S. Lawmakers Threaten Prohibition Bill for further details.

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