Congress welcomes back Prohibition - Internet Gambling Bill Passes

30 September 2006


written September 30, 2006

Many local bookmakers such as “Benny the Bullet” were seen partying and rejoicing in Central Park, New York late last night and into the early morning hours today. Their business is expected to quadruple, just as bootlegging did years ago.

I also imagine that some Poker houses are equally ecstatic to welcome back basement games.

The reason for all of this jubilation is due to Prohibition returning to the United States once again. Only this time, Prohibition is disguised in the mask of an Internet gambling bill.

Lawmakers stayed up late as well, making sure to throw our country back into the Dark Ages. It became apparent that Republicans spearheaded by Senator First would stop at nothing to prohibit Internet gambling. In a last ditch desperation move, the Senate majority leader was able to attach legislation to ban online gambling to a Port Security bill that had no correlation whatsoever with online betting. And it was automatically passed in the Senate without even a debate or a formal vote.

To summarize what was passed, this bill is designed to prevent the use of payment instruments (credit cards, fund transfers, etc.) for certain forms of online gambling that are defined as “unlawful Internet gambling.” The bill requires financial institutions to identify and block payments related to so-called unlawful Internet gambling transactions. If there is a violation, the government may file a lawsuit (known as an injunction) to prevent or restrain the violation. The bill provides a special exemption for three types of Internet gambling: (1) horse racing under the Interstate Horseracing Act (IHA), so OTBs and account wagering systems can remain in business, (2) Indian gambling that takes place on a reservation or between two reservations; and (3) Internet gambling that occurs solely within a state’s own borders, referred to as Intra-state gambling.

It is hypocritical of our government to make exceptions for some forms of online gambling, while declaring it illegal for most others to compete.

According to our Friends at, this bill should not be signed by President Bush for the following reasons:

1-it interferes with private personal freedom- Americans have the right to engage in recreational activities from the privacy of their own home.

2- it is opposed by the majority of voters and supported by a small minority.

3- it is opposed by leading newspapers and scholars who cover the realm of Internet gambling.

4- it will not work because Americans want to gamble online and will find a way to do so whether it is legal or not.

5- it will drive revenues and potential tax revenues offshore.

6- it violates US trade treaty obligations and a WTO ruling because among other reasons, this bill favors US remote gambling (online horse racing, online lotteries, etc), while seeking to ban foreign remote gambling (offshore casinos and sports books, etc).

7- the bill is totally out of line with a number of forward thinking countries-including the United Kingdom– that have decided to regulate online gambling rather than seeking ineffective ways to try to ban it.

8- it will not accomplish its purported goals (propoganda) of fighting money laundering, organized crime, problem gambling or underage gambling.

9. it will burden Internet service providers, search engines, and banking/financial services companies, third parties who will bear the cost and responsibility to try to comply with the new law.

10. it is detrimental and contrary to the concepts of freedom of expression and ‘Net neutrality’ embraced by Congress.

In fact, Senator Frank R. Lautenberg (D) from New Jersey called the entire process a “sham” last night by saying no one among the committee had even seen the final language of the Bill and the head of the conference board wasn’t even there in attendance.

It is a travesty and a tragedy to witness our government cram the Senate majority leader’s agenda onto a much needed Port security bill that has nothing at all to do with Internet Gambling.

It is comical to imagine Americans getting arrested for playing Texas holdem in their homes or for taking the 6 points on the New England Patriots against the Bengals on Sunday.

If my interpretation is correct, the President will sign this legislation within two weeks, but it allows 270 days before it is regulated and enforced.

The clock is ticking and time appears to be running out. Whether or not this bill will ever really be enforced remains to be seen.

In my opinion, it won’t happen, but I will save that for another column.



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