Odds Go Against Online Gambling
Congress cracks down on Internet payments to virtual casinos.
Elsa Wenzel, Medill News Service
Wednesday, June 11, 2003
WASHINGTON -- America's virtual casino pits could be vacant, under a bill now making progress in Congress. The House this week approved legislation outlawing credit card, wire transfer, and other payments used to gamble online.
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The measure--passed Tuesday in the House of Representatives by a 319-104 vote--cracks down on companies that front the funds for interactive roulette, card games, and sports betting. It would not bar payments for state-authorized lotteries and racetracks or for peer-to-peer games without wagers. Similar measures have not progressed.
The measure now goes to the Senate, which ignored a similar measure last year.
Ongoing Debate
Most of the thousands of gambling Web sites, which together do $6 billion of business annually, operate outside of U.S. laws and taxes, according to the Justice Department. Drug dealers, mobsters, and terrorists exploit the Internet and thrive on the wild card of online gaming, the bill's supporters say.
"Organized crime controls these sites," says Rep. Spencer Bachus (R-Alabama), who proposed the bill. "We know they're not good people. We know they link these sites with pornographic sites" targeting teens.
But the bill threatens "the sanctity of the Internet" says Rep. Barney Frank (D-Massachusetts), who calls it the "Inconsistency Act of 2003."
"It's unfair to ban something that only a minority of people will abuse," Frank says.
Online privacy could suffer from an outright ban, say those who prefer to regulation to prohibition. Seventy-four countries regulate online gambling.
If betting online with cash is becomes illegal, rogue casinos will get creative, using electronic wallets for payments, says Sue Scheider, who chairs the Interactive Gaming Council. Because electronic wallets create online identities with debit accounts, tracing the wallet-owner's real identity is more difficult than with credit cards, she says. "It's a privacy issue," Scheider adds.
Scheider contends that the bill's approach will scare legitimate businesses and hand a jackpot to criminals skilled at subverting the law. What's more, the bill bans only online gambling while ignorng state lotteries, horse races, and casino gambling.
Fraud, Family Cited
Several representatives tried to soften or modify the measure.
One failed amendment, proposed by Republican Rep. James Sensenbrenner of Wisconsin, would have let Native American nations conduct gambling online.
The House also rejected an amendment to permit using credit cards, but not electronic checks or services like PayPal and NetTeller, for Web gambling. Credit cards can verify players' identities and ages, preventing fraud and protecting children, says Rep. Sheila Jackson Lee (D-Texas), who proposed the change.
Both Republicans and Democrats played the family values card during the House floor debate.
"If there's one thing these illegal Internet gamblers know, it's they know our children are fascinated with and are very literate on the computers," Bachus said during the debate. "Are we going to continue to stand by while families are broken apart?"
Gambling online is dangerous because "You can sit in your own family room and your bathroom in a rainy weekend and literally go broke in a matter of 24 hours," said Frank Wolf, a Virginia Republican.
Religious activist groups including the Christian Coalition of America and the National Council of Churches support the bill.
Some established casinos that hope to move online are getting out of the game. MGM Mirage Online closed down its operation on the Isle of Man one week before the House vote. The company had recently lobbied Congress to regulate, not ban, e-gaming.