US Still Free to Gamble Online & Bill Side Effects

Posted:03.12.2006, 23:06

The Unlawful Internet Gambling Enforcement Act of 2006 does not make it a crime for US residents to gamble online; American players are still free to gamble anywhere on the Internet, stated Rick Smith and Keith Furlong, who respectively are the Executive and Deputy Directors of the Interactive Gaming Council (IGC), in a press release this week.

The IGC is a leading trade association for the international interactive gambling industry with its membership operating or supplying services to most of the reputable interactive sites on the Internet.

Their press release continued, saying the bill focuses on the prosecution of financial institutions handling transmission of money from U.S. players to operators of online gambling sites. So some sites may no longer accept wagers, as many of the publicly traded online gambling companies announced they would stop taking American bets following recent passage of the bill by Congress.

But they stressed that the bill will cause unintended negative consequences, in direct opposition to the bill's intent.

"In the guise of protecting vulnerable Americans- minors who want to gamble and adults who can't control their gambling - Congress has actually heightened the risk to these groups," said IGC Deputy Director Furlong.

"It has driven away the operators who followed the most socially responsible practices. It has also increased the possibility of online gambling being used for money laundering, because it has outlawed the most easily tracked methods of payment."

"This bill doesn't do anything to protect American consumers who choose to enjoy Internet poker and other games," added Furlong. "But the immediate effect is to drive the industry further underground. Gambling sites will devise new methods for getting money from / to a market where players have shown a resilient demand for this type of entertainment. The sad thing is, however, that many of the largest and most responsible companies, some of whom are major public companies listed on the London Stock Exchange, are being forced to stop providing real-money games."

"With few exceptions, U.S. states have demonstrated over many years that they can successfully regulate the bricks-and-mortar gambling industry," observed IGC Executive Director Smith. "That industry employs thousands of people and generates millions of dollars in tax revenue. The same principles could have been followed in the Internet gambling industry. With licensing and rigorous regulation of online gambling sites, rather than futile attempts at prohibition, governments can ensure that games are fair, operators are honest and solvent and vulnerable players are protected. And the governments could have reaped millions in taxes."

The IGC acknowledges that the Internet raises unique regulation challenges, but criticized Congress for having no interest to take any steps to study those issues. They especially criticized Congress for rejecting several attempts in the House to amend HR-4411 to include studying the possibility of regulation.

Political motives, including presidential aspirations, clearly drove its rush to pass a prohibition bill, as its members left Washington to hit the campaign trail, the press release stated.

"This was a sneaky election ploy," Furlong said. "Its no coincidence that a ban on Internet gambling is part of the family values' platform of the extreme right, which wants to distract voters from real problems, such as the war in Iraq, and at the same time impose its moral agenda on Americans, depriving them of their freedom of choice."

Senate Majority Leader Bill Frist of Tennessee, who led the last minute weekend maneuver to append the Gambling Act onto an important Port Security bill, said, "Gambling is a serious addiction that undermines the family, dashes dreams and frays the fabric of society."

The IGC press release points out the hypocracy of such bill supporters, citing how exemptions for Internet wagering on horse races, fantasy sports and lotteries, amongst other forms, were built into their bill. In many states, people are free to gamble online as much as they want on U.S. horse races and state lotteries. In fact, in a research report in March, an investment bank stated: The U.S. horseracing industry now generates over 15% of its revenue from online wagers. The IGC release postulated that the horse racing lobby is simply too powerful for Congress to oppose.

"What a contrast between the U.S., which after all went through a notoriously unsuccessful attempt to ban alcohol, and Britain, which is methodically preparing to license and regulate online gambling, starting next year," Smith said