House approves bill to stem online gambling

After much debate, a bill that would essentially lead to a complete ban of online gambling in the United States was approved by the House of Representatives today. The House voted 317 to 93 in favor of H.R. 4411, which will need to be approved by the Senate and the President before becoming law.

The Internet Gambling Prohibition and Enforcement Act, which is a part of the House's American Values Agenda, combines H.R. 4411 introduced by Representative Jim Leach (R-Iowa) and H.R.4777 introduced by Representative Bob Goodlatte (R-Va.).

If passed into law, the bill will make it illegal to use credit cards and fund transfers from banks to settle internet wagers. It also will update the Wire Act to specifically prohibit online gambling and allow authorities to work with Internet providers to block access to gambling web sites.

The bill does make exceptions for state-run lotteries and horse racing. During the debate of the bill, Representative Shelley Berkley (D-Nev.) introduced an amendment to it that would take out the exceptions. She said it was unfair to allow online lotteries and internet betting on horse races while at the same time cracking down on other kinds of sports betting, casino games and poker.

Berkley's amendment was rejected, and Goodlatte called the amendment a "poison pill amendment" that was meant only to derail the bill.

Opponents of the bill such as the Poker Players Alliance (PPA) agree with Berkley's stance that even though the bill is called "Internet Gambling Prohibition," in reality it picks and chooses between types of gambling.

Instead of a ban, some Congressmen and gambling groups would like to see studies done on online gambling and have it legalized and regulated.

Representative Jon Porter (R-Nev.), along with fellow Nevadans Berkley and Jim Gibbons as co-sponsors, introduced the Internet Gambling Study Commission Act into the House of Representatives in early June. The act would establish a commission to study the impact of online gambling and was hoped to be an alternative to banning online gambling.

Perhaps if the commission had been set up before this bill passed, they may have come to the same conclusion that a recent PPA study did. The study, prepared by economist Judy Zanthopoulos with Quantria Strategies LLC, examined the existing Internet poker market and found that more than $3 billion could be raised in federal and state taxes if the industry was legalized and properly regulated in the United States.

"This study validates that the benefits of regulating online poker in the U.S. far exceed the value of prohibiting the activity," said Michael Bolcerek, PPA president. "Internet poker is an incredibly popular pastime for millions of Americans. Keeping Americans away from this game is not only unfair, but as this study shows, would be costly, denying state and federal coffers an important source of revenues."

Internet gambling is now regulated in more than 80 countries and jurisdictions. The United Kingdom also passed legislation in 2005 that will go into affect in 2007 to regulate and tax Internet gambling.

"[The PPA] enthusiastically supports regulation and taxation, rather than an outright ban," Bolcerek said. "We remain hopeful that opponents of Internet poker will come to the realization that prohibitions don't work and will embrace the idea of creating a regulated environment so that Americans can have an even higher level of comfort when playing poker online."

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