New Legislation Threatens Online Gambling

On the 15th of February US Congressman from Virginia Bob Goodlatte reintroduced HR 4777, the “Internet Gambling Prohibition Act.” Goodlatte hopes to pass the bill, which will amend the earlier Title 18 of the United States Code containing the Federal Wire Act passed in 1961. The Wire Act outlawed telephone betting by making it illegal to place bets by “wire transmission.”

The explosion of Internet poker rooms and sports books in recent years was possible only as a result of the ambiguity surrounding the definition of “wire”. While opponents of Internet gambling insisted that the meaning included cable, satellite, and cellular technology, no court would uphold a conviction based on that definition. Goodlatte hopes to amend that by expanding the Code to include all forms of electronic transmission, as well as to include all types of bets.

Earlier attempts to pass the legislation were thwarted by the lobbying efforts of Jack Abramoff, according to Gooodlatte’s office. But Abramoff’s recent guilty pleas to fraud, tax evasion and conspiracy to bribe public officials have added political capital to Goodlatte’s campaign.

According to Goodlatte “Illegal online gambling doesn’t just hurt gamblers and their families, it hurts the economy by draining dollars from the United States and serve as a vehicle for money laundering,” stated Goodlatte. “It is time to shine a bright light on these illegal sites and bring a quick end to illegal gambling on the Internet.”

“But outlawing online gambling won’t stop the activity.” says Will Catlett of Sportsbettingscams.org, an industry watchdog site. “It will only drive it underground. If online gambling is outlawed then the government will lose its ability to legislate online gambling policy and police it’s dangers, not to mention its ability to tax the transactions. Goodlatte’s bill will do exactly the opposite of what it wants to do.”

As of July 2005, according to Forrester polls, there were over 300,000 gambling websites entertaining over 7,000,000 online gamblers. While the bulk of traffic to these websites initially came from the United States, that number is now around 40% as players are attracted from all over the world. If the bill is passed, the industry will shrink dramatically, and shift its focus to other nations. Meanwhile, online gamblers in the United States will be out of luck. “It’s amazing to me that this bill just might pass quietly with little or no resistance.” says Catlett. “Anyone who enjoys gambling online really should write their State Representative to let them know why this bill shouldn’t go through.”