03 October 2006

DATE: October 2, 2006


Washington, DC: On Saturday, the House and Senate passed legislation to curb Internet gambling. The measure was included in the port security conference report, H.R. 4954, and prohibits online gambling businesses from accepting payments for the purpose of betting. The bill also requires the Treasury Department and the Federal Reserve Board to issue regulations to require banks to block illegal gambling transactions.

This legislation contained provisions from a comprehensive ban on Internet gambling introduced by Congressmen Bob Goodlatte (R-VA), Rick Boucher (D-VA), and Jim Leach (R-IA) and passed by the House earlier this year. Under current federal law, it is unclear whether using the Internet to operate a gambling business is illegal. The closest useful statute currently is the Wire Act, which prohibits gambling over telephone wires. However, the Wire Act was passed 45 years ago and has not been modified to address new technologies, such as the Internet, that have emerged since the Act was originally signed into law. The House-passed bill, H.R. 4411, updated the Wire Act to prohibit gambling via the Internet and wireless technologies as well as prohibiting all forms of gambling, not just sports-related bets and wagers.

“The passage of this legislation is a step in the right direction in the fight against online gambling and will help to cut off the money supply to these illegal outfits,” Goodlatte said. “While I celebrate this victory, I am also preparing to launch the next initiative to combat Internet gambling by ensuring that the federal Wire Act is made crystal clear in that it covers all forms of gambling, not just sports-related bets and wagers.”

“Offshore Internet gambling websites take billions of dollars out of our economy each year, damage families, and serve as vehicles for money laundering. The approval of this legislation by the U.S. Congress represents a positive step towards curbing this harmful practice, and I will continue to work with my colleagues to ensure that all forms of Internet gambling are brought within the fold of the anti-gambling restrictions contained in the Wire Act,” said Boucher.

Late last week, a New York judge cited conflicting state laws as a reason for refusing to extradite an Internet gambling company executive to Louisiana, where he was charged with violating a state law prohibiting online gambling. New York law only permits extradition if the accused person was physically present where he is accused of breaking the law.

“The recent inability of New York to extradite a gambling executive to Louisiana highlights the problems with relying solely on state laws to solve this problem and underscores the need for clear federal laws prohibiting this conduct,” Goodlatte said.

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