Internet gambling law a success, but faces scrutiny
- Nov 27, 2007 - 1
It is estimated to be a $13 billion industry worldwide, and the United States has been its biggest market. Yet this industry is illegal in our nation and is opposed by pro-family organizations as well as the National Football League, the National Basketball Association, the National Hockey League, Major League Baseball, and the National Collegiate Athletic Association.
While many people mistakenly believe Internet gambling is legal, the activity is outlawed in the United States under a 1961 law known as the Wire Act, which prohibits businesses from using wire communications in interstate commerce to transmit bets or wagers. Unfortunately, enforcement of the law has been difficult.
Last year, however, opponents of Internet gambling achieved a momentous victory with passage of a bill to put in place restrictions to help enforce existing laws against online gambling. The Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA), signed into law October 2006, creates enforcement tools to prevent or interdict gambling on the Internet by prohibiting financial institutions from approving transactions between U.S.-based customer accounts and offshore gambling merchants, thereby making it difficult for people to send money to online gambling coffers. It was included in a port security measure and received wide support, passing 409-2 in the House and with unanimous consent in the Senate.
The bill struck an immediate blow to the bottom line of offshore Internet gambling companies, which had relied heavily on the United States to fill their coffers. Shares for the Gibraltar-based PartyGaming, the largest online gambling company, plunged 58 percent, wiping out $3.8 billion in stock the first day the exchange opened after Congress passed the measure. The company up to that point had generated 78 percent of its revenue from the United States.
Recent polling shows that Internet gambling has continued to drop in the wake of the UIGEA’s passage, even before the regulations have been put in place. A study released in October by the University of Pennsylvania’s Annenberg Public Policy Center found that weekly Internet gambling among college-age males fell from 5.8 percent in 2006 to 1.5 percent in 2007. Further, monthly Internet gambling dropped from 8.9 percent to 2.9 percent among this sample.
The UIGEA requires the Department of Treasury and Federal Reserve Board to formulate steps financial institutions must take to block credit cards, fund transfers, and other methods of payment to Internet gambling businesses. Rules will be issued after the two agencies consider public comments, which can be offered through December 12, 2007.
Several members of Congress, however, are pushing legislation that would reverse the positive trends already seen under the UIGEA. Rep. Shelley Berkley (D-NV), for example, believes Internet gambling should be both legalized and regulated and has introduced the Internet Gambling Study Act (H.R. 2140), which would require yet another study of the impact of Internet gambling, even though its adverse effects are clear. Other bills, such as the Internet Gambling Regulation and Enforcement Act of 2007 (H.R. 2046) and the Skill Game Protection Act (H.R. 2610), would pair the legalization of some forms of Internet gambling with enforcement measures for minors.
By prohibiting gambling businesses from accepting payments over the Internet, the UIGEA has the potential to spare millions of lives from the tragic effects of economic ruin and broken families. But unless strong regulations are put in place and efforts to overturn the law are squelched, offshore Internet gambling companies will continue to prey on Americans.
If you believe Internet gambling should remain illegal, please urge the Department of Treasury and Federal Reserve Board to issue strong regulations on the Unlawful Internet Gambling Enforcement Act of 2006. Also, tell your congressman or congresswoman to oppose any bill that weakens the UIGEA.
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1 comments (post your own) feed
1 On Dec 27th, 2007, at 6:04am, Jerry wrote:
It figures that I’d see this on a religious site. I’m religious, but I still feel that people have the right to choose what they want to do without religion getting deeply into politics to force people to comply.
The UIGEA will fail miserably because the banking industry has already said that they can’t comply, people in the U.S. are actively gambling right now, and this law doesn’t make it illegal to gamble online.
It’s funny how you fail to mention the carve-outs for horse racing and fantasy sports. They aren’t gambling too? Also, you mention that the bill was passed by most members but you fail to mention that it was added a few minutes before voting and most of the members didn’t even know that it was attached to the Ports Bill.
I don’t need to post anymore.. because I don’t believe that this will even make it to your article comments. You’ll just delete it.. because I presented the facts.