INTERNET GAMBLING Legal
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INTERNET GAMBLING |
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IV. Cases
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Congressional Attempts to Regulate Internet GamblingDespite the high-profile emergence of internet gambling, there is currently no federal law that directly bans or even regulates online gambling. This has relegated federal prosecutors hoping to reign in online casinos to pursuing such prosecutions using outdated, and arguably inapplicable, statutes such as the Interstate Wire Wager Act (“Wire Act”), an act passed in 1961 that obviously was not passed with internet activity in mind. The absence of federal regulation, however, is not due to lack of effort on behalf of lobbyists and legislators. In fact, since 1997 a variety of bills have been unsuccessfully introduced that would have either completely criminalized, or severely limited, internet gambling. Though Congress has yet to pass one of these bills, such passage is beginning to look inevitable as amended bills are being introduced with increasing fervor in seemingly every session. Accordingly, a look at prior bills and current proposed legislation is appropriate to fully understand the legal landscape of internet gambling. References:
Internet Gambling Prohibition Act of 1998The first major Congressional effort to criminalize internet gambling occurred in 1997 when Senator John Kyl introduced the Internet Gambling Prohibition Act (“IGPA”). Though there have been several proposed versions of the IGPA since, the thrust of each version has been to amend the Wire Act to ensure its applicability to online gambling by modifying the Act’s definition section and tacking an extra section (section 1085) onto the end of the Wire Act. Note that this first version is dubbed the IGPA of 1998 after the year that it was voted on. IGPA of 1998 Proposed Amendments to the Wire Act:
References:
Benefits of the IGPA of 1998
Despite the various enforcement problems that such a bill would present if passed, the benefit of the IGPA of 1998 is that it would finally update the Wire Act to make it clearly applicable to internet gambling. Thus, if prosecutors were able to overcome the practical difficulties of enforcement, they would have a much more effective tool with which to pursue gamblers and operators. Additionally, and perhaps more important from a political standpoint, the federal government would position itself with one voice against the perceived problems of internet gambling, such as gambling by minors and addicts, by prohibiting all unauthorized internet gambling within the United States. Concerns over the IGPA of 1998
Various groups contested certain provisions of the IGPA, most notably ISP representatives and the Department of Justice (“DOJ”).
References:
Results
The IGPA of 1998 garnered a great deal of support ranging
from Christian conservative groups to the FBI to every major
References:
Internet Gambling Prohibition Act of 1999At the opening of the 106th Congress Senator Kyl once again introduced a version of the IGPA named the IGPA of 1999. Though this version was almost identical to the IGPA of 1998, there were some notable differences that addressed the concerns about the previous bill that are listed above. Differences Between the IGPA’s of 1998 and 1999:
References:
Results
This version of the IGPA did a fairly good job at addressing the concerns raised over the language of its predecessor. The bill once again sailed through the Senate, this time receiving unanimous approval. However, some members of the House felt that the bill had far too many exceptions, with some representatives calling for punishments against individual bettors and others taking issue with the exception for fantasy sports leagues. Thus, the IGPA once again stalled in the House and the 106th Congress ended without it being approved by the full Judiciary Committee. References:
Internet Gambling Enforcement ActAfter the failure of the IGPA, Representative Jim Leach
introduced a new proposal for regulating internet gambling in 2002 named the
Internet Gambling Enforcement Act, though it was popularly known as the Leach
Act. This bill attempted a new approach
at stopping internet gambling: instead of prohibiting internet gambling itself,
the bill sought to prevent
Relevant Components of the IGEA:
Pros and Cons
The IGEA is very simple in its approach to stopping internet
gambling: simply cut off the means of placing bets and the bets will stop. Such a bill could potentially greatly reduce
the amount of casual internet bettors and would make it very difficult for
gambling operators located in the
Results
The IGEA passed in the House during the 107th Congress, breaking the streak of unsuccessful internet gambling bills in the House. However, this time around the Senate failed to act on the bill before the session ended, thus resulting in another failed attempt at regulating internet gambling. The IGEA is still an actively proposed bill, though its name has changed to the Unlawful Internet Gambling Enforcement Act of 2005. References:
Reasons for the Failure of Internet Gambling BillsCongressional Dance
Though there have been extenuating circumstances, such as President Clinton’s impeachment, that have generated legislative logjams to halt the progression of these bills through Congress, it does seem suspect that each of the bills has passed in one house of Congress only to have the session expire before being passed by the other house. This is especially suspect when considering how easily the two versions of the IGPA moved through the Senate. Perhaps it is just coincidence that all three bills fell victim to this same fate, or perhaps it is a convenient dance by Congress that allows them to appear tough on internet gambling without actually passing anything that prohibits it. Indeed, one commentator has suggested that the legislature is not quite sure whether it is best to completely prohibit internet gambling, as these bills have aimed to do, or rather to simply attempt to regulate it, and that this uncertainty has caused Congress to drag its feet over this legislation. While this may certainly have some validity, there may also be another more direct answer to these bills’ failures: over-aggressive lobbying. Reference:
Over-Aggressive Lobbying
The highly publicized trial of Jack Abramoff, the embattled lobbyist who this year pled guilty to five felony charges regarding his shady lobbying efforts, actually brought to light some of the effects that his efforts may have had on the failure of the IGPA. When the IGPA of 1999 was introduced eLottery, inc., hired Abramoff to block the bill’s passage. To oppose the bill, Abramoff used money from eLottery to pay political powers, including Reverend Louis Sheldon. Rev. Sheldon’s involvement was interesting because he was a former director of the Christian Coalition, which heavily supported the bill. Rev. Sheldon justified his position by claiming that he opposed the bill due to the many exceptions allowed for authorized gambling. After the IGPA passed in the Senate Abramoff allegedly used his influence over Majority Leader Tom Delay to oppose the bill, concluding in Delay placing the IGPA on the suspension calendar in the House, which is a procedural move designed for non-controversial bills. Because of its placement on the suspension calendar debate on the bill was limited, amendments were not allowed, and the bill required a two-thirds vote to pass. However, the bill failed to garner this two-thirds vote and supporters of the IGPA immediately demanded that it be revived in the House. Because it appeared that the IGPA would pass if revived, Abramoff apparently employed a political power move to stop this from happening. He used Rev. Sheldon and others to direct a campaign focused at ten Republican representatives in vulnerable districts that accused them of not being tough on gambling if they voted for the bill (because of the bill’s exceptions). This forced those representatives to contact Delay’s Chief of Staff to tell him their constituents did not want them to vote for the bill. The Chief of Staff, over whom Abramoff exerted a great deal of influence, then exaggerated the concerns to Delay, who in turn told the Republican House leaders that if they passed the bill those representatives’ seats could be lost. This convinced Republican leaders not to revive the bill, ending with the bill not being put to a vote in the House before the session was over. Thus, the failure of the IGPA in Congress may have had less to do with the bill and more to do with very shady lobbying attempts. References:
Current Federal ProposalsFollowing the revelation that Jack Abramoff
played such a large role in preventing the passage of internet gambling bills,
both the IGEA and the IGPA have been reintroduced in Congress. The IGEA has taken on a new name, the
Unlawful Internet Gambling Enforcement Act of 2006, but is substantially
similar to the former proposed version of the bill. This version, which is being considered in
the Senate, once again seeks to prohibit online gambling sites from accepting
forms of payment from
Reference:
The new IGPA (“IGPA of 2006”), on the other hand, has
interestingly merged provisions of the IGPA of 1999 and the IGEA in an attempt
to prohibit internet gambling. The IGPA
of 2006 was introduced in the House by Representative Goodlatte
in February of 2006. This new version
seeks to make it a crime for internet gambling operators to take bets from
bettors in the
IGPA of 2006 Provisions:
References:
It is no coincidence that these bills have been reintroduced following the scandal surrounding Abramoff; in fact, many believe that the measures stand a very good chance of passing simply because detractors from the bill may be seen as linked somehow to Abramoff, which is something that no politician desires right now. As Rep. Leach stated, “Congress is in certain disrepute. [Passage of the IGEA] is part and parcel of what I consider to be a necessary to clean up the Congress.” House Financial Services Committee Approves Internet Gambling Bill, Tech Law Journal, at http://www.techlawjournal.com/topstories/2006/20060315.asp. Indeed, even the website constructed to oppose the IGPA acknowledges that “[b]ecause of the shady past in how the bill was previously defeated, a concern is that it will pass as a sort of reactionary move.” Internet Gambling Prohibition Act, at http://www.igpa.info/ (a website set up as an online petition against the IGPA). Move Toward Regulation?As a side point, it is interesting that in all of the
proposed legislation over the years, there has never been a proposal to simply
regulate internet gambling instead of prohibiting it outright. Proponents of this idea point out that
regulation would allow the
Resource:
Comparison Chart of Bills
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