[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]








       A CASINO IN EVERY SMARTPHONE: LAW ENFORCEMENT IMPLICATIONS

=======================================================================

                                HEARING

                               BEFORE THE

                         COMMITTEE ON OVERSIGHT
                         AND GOVERNMENT REFORM
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED FOURTEENTH CONGRESS

                             FIRST SESSION

                               __________

                            DECEMBER 9, 2015

                               __________

                           Serial No. 114-130

                               __________

Printed for the use of the Committee on Oversight and Government Reform


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              COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM

                     JASON CHAFFETZ, Utah, Chairman
JOHN L. MICA, Florida                ELIJAH E. CUMMINGS, Maryland, 
MICHAEL R. TURNER, Ohio                  Ranking Minority Member
JOHN J. DUNCAN, Jr., Tennessee       CAROLYN B. MALONEY, New York
JIM JORDAN, Ohio                     ELEANOR HOLMES NORTON, District of 
TIM WALBERG, Michigan                    Columbia
JUSTIN AMASH, Michigan               WM. LACY CLAY, Missouri
PAUL A. GOSAR, Arizona               STEPHEN F. LYNCH, Massachusetts
SCOTT DesJARLAIS, Tennessee          JIM COOPER, Tennessee
TREY GOWDY, South Carolina           GERALD E. CONNOLLY, Virginia
BLAKE FARENTHOLD, Texas              MATT CARTWRIGHT, Pennsylvania
CYNTHIA M. LUMMIS, Wyoming           TAMMY DUCKWORTH, Illinois
THOMAS MASSIE, Kentucky              ROBIN L. KELLY, Illinois
MARK MEADOWS, North Carolina         BRENDA L. LAWRENCE, Michigan
RON DeSANTIS, Florida                TED LIEU, California
MICK MULVANEY, South Carolina        BONNIE WATSON COLEMAN, New Jersey
KEN BUCK, Colorado                   STACEY E. PLASKETT, Virgin Islands
MARK WALKER, North Carolina          MARK DeSAULNIER, California
ROD BLUM, Iowa                       BRENDAN F. BOYLE, Pennsylvania
JODY B. HICE, Georgia                PETER WELCH, Vermont
STEVE RUSSELL, Oklahoma              MICHELLE LUJAN GRISHAM, New Mexico
EARL L. ``BUDDY'' CARTER, Georgia
GLENN GROTHMAN, Wisconsin
WILL HURD, Texas
GARY J. PALMER, Alabama

                    Sean McLaughlin, Staff Director
                 David Rapallo, Minority Staff Director
               Troy Stock, IT Subcommittee Staff Director
                    Sharon Casey, Deputy Chief Clerk
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on December 9, 2015.................................     1

                               WITNESSES

Mr. Joseph S. Campbell, Assistant Director, Criminal 
  Investigative Division, Federal Bureau of Investigation
    Oral Statement...............................................     7
    Written Statement............................................     9
The Hon. Alan M. Wilson, Attorney General, South Carolina
    Oral Statement...............................................    12
    Written Statement............................................    14
The Hon. Donald W. Kleine, Douglas County Attorney, Nebraska
    Oral Statement...............................................    19
    Written Statement............................................    21
The Hon. Mark Lipparelli, Senate of Nevada
    Oral Statement...............................................    23
    Written Statement............................................    26

                                APPENDIX

1. Letters Submitted by Mr. Chaffetz:
2015-12-07 8 State AGs to Goodlatte Grassley Conyers Leahy - Wire 
  Act............................................................    66
2015-12-07 Laxalt-NV AG to Goodlatte Grassley Conyers Leahy - 
  Wire Act.......................................................    69
2014-02-04 16 State AGs to Goodlatte Grassley Conyers Leahy - 
  Wire Act.......................................................    73
2013-09-20 Johnson-DOJ to Rep Young - Money Laundering Via Online 
  Gambling.......................................................    76
2009-11-13 Henry-DOJ to Rep Bachus - Internet Gambling...........    78
2015-12-08 Gov Hutchinson-AR to JEC - Wire Act...................    81
2015-03-19 Gov Herbert-UT to JEC - Wire Act......................    84
2014-04-22 Gov Scott-FL to Goodlatte Grassley Conyers Leahy - 
  Wire Act.......................................................    85
2014-03-24 Gov Haley-SC to Goodlatte Grassley Conyers Leahy - 
  Wire Act.......................................................    88
2014-03-24 Gov Perry-TX to Goodlatte Grassley Conyers Leahy - 
  Wire Act.......................................................    90
2014-05-01 Gov Pence-IN to IN Delegation - Wire Act..............    92
2015-12-07 Rep Holding to JEC - Internet Gambling................    93
2014-06-27 Christensen-FRC to Rep - Wire Act.....................    95
2014-08-14 Newsweek - How Washington Opened Floodgates to Online 
  Poker..........................................................    97
2014-03-26 Thirty-Seven Groups to Goodlatte Grassley Conyers 
  Leahy - Wire Act...............................................   105
2. 2007-07-06 Washington Post ``Three Worked the Web to Help 
  Terrorists''...................................................   109
3. 2015-10-28 Canterbury-FOP to JEC EEC - Oppose Wire Act........   112
4. Letters Submitted by Mr. Clay:................................
2013-07-17 Norquist-AFTR to McCaskill Heller - ``Expansion of 
  Internet Gambling''............................................   114
2014-03-10 The Hill ``Congressional Ban On All Online Gaming Is 
  Wrong For America..............................................   116
2014-03-29 Townhall ``Congress Should Reject Adelson's Crony 
  Power Play.....................................................   117
2014-03-31 Gale-NASPL to Graham - Wire Act.......................   118
2014-04-01 Reason ``Tortured Textualism and Faux Federalism of 
  the Chaffetz-Graham-Adelson Online Gambling Ban''..............   119
2014-04-03 Starr Smith-NCSL to Reid McConnell Boehner Pelosi - 
  Wire Act.......................................................   120
2014-04-09 Keeley-NCLGS to Goodlatte Grassley Conyers Leahy - 
  Wire Act.......................................................   121
2014-05-09 Govs Bentley Tomblin NGA to Reid McConnell Boehner 
  Pelosi - Oppose Online Gaming Ban..............................   123
2014-04-28 Thirty-Seven Orgs to Goodlatte Grassley Conyers Leahy 
  - Wire Act.....................................................   124
2014-05-13 WiredSafety ``Cyber-safety Charity Wired Safety 
  Supports Online Gaming Regulation''............................   126
2014-09-00LV Center for Gaming Research ``The Original Intent of 
  the Wire Act''.................................................   127
2014-11-16 Ron Paul Institute `Internet Gambling Ban'............   139
2014-12-02 Canterbury-FOP to Reid McConnell Boehner Pelosi - Wire 
  Act............................................................   140
2014-12-08 Members to Boehner - Wire Act.........................   142
2014-12-09 Polis Cohen to Appropriations - Online Gaming.........   144
2014-12-15 Cullerton-IL State Senate to 16 Members - Wire Act....   146
2015-03-03 Pennsylvania Hr 140 - Wire Act........................   162
2015-03-03 Washington Examiner ``Republicans Take Up Casino 
  Donor's Fight Against Internet Gambling........................   164
2015-03-04 RedState ``Stacking the Deck in Fight Over Online 
  Gambling Ban''.................................................   166
2015-03-12 Gleason-KY Lottery to McConnell - Wire Act............   168
2015-03-17 Govs Bullock Hassan DGA to Reid McConnell Boehner 
  Pelosi - Wire Act..............................................   170
.................................................................
2015-03-18 Roll Call ``Wire Act - Don't Fix What Isn't Broken....   173
2015-05-21 Roll Call ``Regulatory Oversight of Online Gaming in 
  the States Is Working''........................................   175
2015-06-16 Rep Pretlow-NY to NY Delegation - Wire Act............   176
2015-09-10 US News - Ron Paul ``A Bad Bet For Republicans''......   178
2015-12-04 Brnovich-AZ AG to EEC - Oppose Wire Act support state 
  control........................................................   180
2015-12-07 The Hill ``Apply 10th Amendment to Online Gambling''..   182
2015-12-08 Nower-Rutgers to Watson-Coleman - NJ Online Gambling..   184
2015-12-08 Rebuck-NJ AGO - NJ Online Gambling....................   186
5. RESPONSE from Mr. Campbell FBI to Questions For The Record....   189
6. RESPONSE from Senator Lipprelli NV to Questions For The Record   192

 
       A CASINO IN EVERY SMARTPHONE: LAW ENFORCEMENT IMPLICATIONS

                              ----------                              


                      Wednesday, December 9, 2015

                  House of Representatives,
      Committee on Oversight and Government Reform,

                                                   Washington, D.C.
    The committee met, pursuant to call, at 1:24 p.m., in Room 
2154, Rayburn House Office Building, Hon. Jason Chaffetz 
[chairman of the committee] presiding.
    Present: Representatives Chaffetz, Mica, Jordan, Walberg, 
Massie, Meadows, DeSantis, Mulvaney, Buck, Walker, Blum, Hice, 
Carter, Grothman, Hurd, Palmer, Cummings, Maloney, Clay, Lynch, 
Connolly, Duckworth, Lawrence, Lieu, Watson Coleman, Plaskett, 
DeSaulnier, and Lujan Grisham.
    Also Present: Representative Titus.
    Chairman Chaffetz. The Committee on Oversight and 
Government Reform will come to order.
    Without objection, the chair is authorized to declare a 
recess at any time. I appreciate the flexibility and your 
understanding, as we had votes on the floor. Almost every 
member has voted. There's 23 members that have not yet voted, 
but--21 now. I think it's important that we start this 
important hearing and I appreciate all of your presence and 
understanding here.
    For more than 50 years we had in place what was called the 
Wire Act. The Wire Act had a prohibition on gambling. It's why 
you couldn't go down to your local bookie or go down to Western 
Union and start wiring money and betting on who knows what.
    That was in place until Christmas Eve, the day before 
Christmas Eve in 2011. With no input from the public or notice 
to Congress, a single unelected lawyer in the Office of Legal 
Counsel of the Department of Justice released a 13-page memo 
reversing 50 years of Department of Justice precedent and an 
understanding that Congress had that the Wire Act was in place 
to prohibit the use of wires to engage in gambling.
    The memo that was introduced declared that the Federal Wire 
Act applied only to sports betting and not to all forms of 
betting. This reverses what the Clinton administration, the 
Bush administration, the Carter administration, and others had 
interpreted.
    Now, certainly with the growth and the expansion and 
difference of the Internet is making on all of our lives, there 
was this interpretation that didn't come through Congress. It 
didn't get the proper vetting. There was not the recourse.
    The point that I've made in sponsoring a piece of 
legislation that would take us back to restoring America's Wire 
Act is that if you want to see a change, if you like a 
different public policy, if you want to see things done 
differently, our Framers have put forward a process, and that 
is you introduce a bill, you fight for it, and you try to get 
it passed into law, passed through the House, passed through 
the Senate, and signed by the President of the United States. 
We don't simply make up laws by one attorney at the Department 
of Justice down in the bowels there at the Department of 
Justice. We don't erase laws. We shouldn't be creating laws. 
That's the whole point of this piece of legislation that I 
have.
    Nevertheless, with this OLC opinion in place, it has 
created quite a stir, a lot of confusion, and, potentially, an 
awful lot of problems. The reversal that the OLC put forward 
was contrary to a plain reading of the statute, the intent of 
Congress in passing the law, and the longstanding position of 
the Criminal Division at the Justice Department. And the result 
is now anything connected to the Internet--desktops, laptops, 
tablets, smartphones--no matter your age, potentially becoming 
a casino. I got a problem with that. I think the country has a 
problem with that. And it certainly needs vetting and 
discussion.
    And, again, you want to make a change? Come to Congress, 
introduce a bill, and make a change. But don't just change the 
law based on an OLC opinion. In fact, I would argue that the 
law actually has--this confusion by this OLC memo is causing a 
lot of problems.
    I don't believe that the memo has the force of law, but 
there are some that are basing their--placing their bets based 
on this interpretation. To those individuals, those 
corporations, you're creating an awful lot of liability for 
yourself and potential prosecution.
    The other challenge that we face is that the Internet 
doesn't have neat walls around it. It's not like a physical 
facility that we can say: All right, it works just right here. 
For anybody to argue that the Internet can be walled off and 
used in just these certain boundaries, it's a joke. Come on. 
Nobody with a straight face is going to come before the 
American people and say: Well, the Internet, it's just for the 
people of Nevada; or it's just for the people of Rhode Island. 
You kidding me? You give me a good 18-year-old and about 36 
hours and you can hack through just about anything.
    So let's not pretend that the Internet is special for just 
certain people. It's one of the big moral challenges that we 
have, but it's also one of the challenges that we have to do in 
making good public policy.
    I believe the piece of legislation that I introduced, 
Restoring America's Wire Act, is a states' right bill. There 
are States, Utah and Hawaii in particular, that have no gaming. 
Right or wrong, whether you like it or not, the history of the 
State of Utah, the history of Hawaii is such that we have 
elected to have no gaming. We don't have a lottery. We have no 
Indian gaming. We don't have any gaming of any sort. I believe 
that's the purview of the individual State. If Nevada wants to 
have it, they made that choice. There are a lot of Utahans that 
will travel to Las Vegas or to Wendover, for instance, and go 
gambling. That's their choice.
    But what I don't want is to have gaming coming to Provo, 
Utah, and Salt Lake City. That's our choice. That our State's 
right, to say: No, you're not going to be gaming in the State 
of Utah. That's our decision. And that is the states' right 
that by pushing gaming online we're having to deal with.
    There is a concern that the OLC memo threatens the right of 
people in certain States to decide not to have gambling within 
their borders. And it's not just an issue for Utah and Hawaii. 
It is for other States as well. A bipartisan group of 16 State 
attorneys general wrote a letter to the leaders of the House 
and Senate Judiciary Committees in 2014 urging Congress to 
restore the decades-long interpretation of the Wire Act. They 
wrote, in part, quote: ``The impact of the opinion which, in 
effect, opens the door to the spread of Internet gaming will 
have a potential significant impact on State and local law 
enforcement,'' end quote. They went on later to say, quote: 
``Given the inherently interstate nature of Internet gambling 
transactions, we anticipate that it will become increasingly 
difficult to effectively regulate such conduct as additional 
jurisdictions consider legalizing Internet gambling,'' end 
quote.
    Federal law enforcement officials have also expressed 
concerns of online gaming. For example, in 2013 the FBI stated, 
quote: ``Online casinos are vulnerable to a wide array of 
criminal schemes.'' They went on to say: ``And many provide 
more opportunities for criminals to launder illicit proceeds 
with increased anonymity,'' end quote.
    I would note a Newsweek article that came out: ``Department 
of Justice settlements regarding online poker are second only 
to financial institutions.'' Fines and settlements in excess 
of--I believe the specific number cited in Newsweek was 1 
billion, 27 million, 511--I'm getting the number wrong, but 
it's over a billion dollars, it's got a lot of digits to it--it 
shows what a significant problem the Department of Justice is 
currently having with it.
    Given the increased access and reliance on technology, 
Congress must do its job and understand the implications of 
this OLC opinion.
    Let's also understand that you're not going to be able to 
distinguish if it's a 7-year-old kid or somebody who's of legal 
age. The Internet that is used is not going to be able to 
distinguish the age of that person. When you go to a physical 
facility, you can pretty much get a guess and some people are 
carded and checked for their age.
    We are raising a generation of children who are extremely 
comfortable with technology. They think nothing of picking up a 
smartphone or tablet and entering the information about their 
life into it. They grow up in a generation where these games, 
they think they're great, they're fun, where they're playing 
for coins, and they're spending a lot of money on Candy Crush 
and others, they don't necessarily know the difference between 
real dollars and fake dollars, real coins and fake coins.
    The speed at which online casinos operate, coupled with 
their accessibility, availability, and anonymity make it clear 
we need to understand more about this problem. The Congress 
must ensure the law is clear and that some unnamed bureaucrat 
down in the bowels of the Department of Justice isn't making 
these important decisions. This is one person's opinion, but 
you can tell by the wide attendance at this hearing today it is 
affecting a lot of people.
    There was no consultation with Federal law enforcement 
officials or with State or local law enforcement officials 
charged with enforcing the vast majority of the criminal laws, 
no opportunity for public comment, Congress was not made aware 
of what the Department of Justice was doing. The OLC basically 
just decided, based on the placement, literally, of a single 
comma--a single comma--that the law didn't mean what everybody 
thought it meant for more than 50 years. The consequences were 
not considered.
    Our goal at this hearing is to discuss what the Department 
of Justice Office of Legal Counsel failed to do. We'll hear 
from Federal, State, and local law enforcement officials who 
have expressed concerns with online gaming, including its 
potential to be used for money laundering, terrorist financing, 
fraud, and other criminal activity. In doing so, we'll respect 
the 10th Amendment and examine how the borderless nature of the 
Internet makes it difficult, if not impossible for States to 
effectively regulate online gaming, protect their States and 
their citizens within their borders.
    I have taken an excessive amount of time. I appreciate the 
indulgence. I will now recognize the ranking member, Mr. 
Cummings, for his statement.
    Mr. Cummings. Thank you very much, Mr. Chairman. I'm going 
to yield to Mrs. Coleman in a second. But I want our witnesses 
to understand that much of this is new to the Congress, and we 
want a full understanding of what is going on here. We're 
hearing from both sides, and they're coming at us with 
everything they've got. And what we seek is fairness.
    We also seek information with regard to those States that 
are already doing it. I am not of a belief that--I don't have 
an attitude of cannot do. I say we can do if we have the will. 
The question is, is how does that play out?
    And, you know, let's not kid ourselves. This is about 
money. Come on now. In some kind of way we've got to make sure 
that whatever we do is fair, is just. But, again, we want to 
hear both sides. As a lawyer for many, many years, I know that 
there's always another side. So, come on, let's take a look at 
both sides of this issue.
    And so it gives me great pleasure, Mr. Chairman, to yield 
to my colleague, Bonnie Coleman, who hails from New Jersey. 
They have online gambling, and she voted for it, and she's been 
someone who has been extremely active and interested in this 
issue. And so I will yield the rest of my time to her, and 
keeping in mind, Mr. Chairman, that I hope that you will give 
her the same latitude that you would give me in that you used 
10 minutes. I'm sure she has 8 more minutes--7 more minutes 
left. Thank you.
    Mrs. Watson Coleman. Thank you to the ranking member, and 
thank you to the chairman. I do speak to you from a position of 
a little bit more knowledge and experience in this issue coming 
from the State of New Jersey.
    The law enforcement implications of online gambling are an 
important policy consideration. However, the evidence clearly 
demonstrates that with proper regulation, instate online 
gambling poses no more challenges to law enforcement or risk to 
consumers than brick-and-mortar casinos. According to the 
Department of Justice, instate online nonsports gambling is not 
prohibited by the Wire Act or other Federal gambling laws, so 
States may regulate online gambling within their own borders.
    Currently, the three States, New Jersey, Nevada, and 
Delaware, have asserted their right to allow regulated online 
gambling within their borders and have created strong 
regulatory structures to provide oversight and enforcement of 
their state regulations. As a member of the New Jersey State 
Legislature, as the ranking member mentioned, I had the 
opportunity to vote for my State's legislation that allowed 
regulated online gambling. I did so because I believed that 
that legislation offered the best opportunity to mitigate the 
risk associated with online gambling.
    Since then, I've been pleased to see that our experience in 
New Jersey has proven that assessment to be correct. These 
three States have not seen an increase in law enforcement 
challenges or consumer risk related to regulated online 
gambling in their State. New Jersey's director of gaming 
enforcement reported earlier this year, and I quote: ``From a 
regulatory standpoint, our system is working. There have been 
no major infractions or meltdowns or any systematic regulatory 
failures that would make any doubt the integrity of operations. 
The issues that have arisen have been dealt with appropriately, 
just like in brick-and-mortar casinos.''
    The Division of Gaming Enforcement also established a 
comprehensive, multifactor geolocation standard that cross 
references multiple location data sources and has the 
capability to determine if software is being used to hide a 
device's location.
    Please take a look at the video screen.
    [Slide.]
    Mrs. Watson Coleman. This is a slide from the company that 
is used in New Jersey to enforce the instate online gambling 
requirement that play on licensed sites only occurs within the 
State of New Jersey.
    Federal law enforcement entities have also not provided 
evidence of challenges related to regulated online gambling 
activities in those three States. This is contrasted with the 
significant challenges associated with unregulated offshore 
online gambling such as limitations on monitoring transactions 
and activity on offshore servers and low levels of 
international cooperation. The unregulated offshore gambling 
sites are not required to verify a player's age, identity, or 
location, and do not provide the significant evidence trail 
that regulated online gambling operations provide.
    The National Fraternal Order of Police wrote in opposition 
to a ban of online gambling, describing the threats that exist 
in the unregulated online gambling arena. Not only does the 
black market for Internet gaming include no consumer 
protections, it also operates entirely offshore with unlicensed 
operators, drastically increasing the threat of identity theft, 
fraud, or other criminal acts. There is also evidence that 
these gaming sites launder money for organized crime and help 
to finance terrorist networks, and I agree.
    Any legislative attempts to ban online gambling will drive 
U.S. patrons to access the unregulated offshore gambling sites 
that pose greater risk to consumers. A Federal ban also 
interferes with a State's right to decide what gambling is 
permissible in its borders and the right to create a regulatory 
framework that protects its citizens.
    The best way to protect our citizens and support law 
enforcement is to allow States to establish a regulated system 
of oversight and enforcement for online gambling that will help 
drive illegal operators out of the marketplace. And if they are 
looking to do so, if the State's looking to do so, New Jersey 
has set a model for regulation that protects its citizens. 
Other States that choose to allow online gambling can learn 
from that approach.
    Thank you, Mr. Chairman.
    Chairman Chaffetz. Thank you.
    I'll hold the record open for 5 legislative days for any 
members who would like to submit a written statement.
    Chairman Chaffetz. We'll now recognize our witnesses. We're 
pleased to welcome Joseph S. Campbell, assistant director, 
Criminal Investigative Division at the Federal Bureau of 
Investigation. Mr. Campbell began his career as an FBI special 
agent in August of 1990 and reported to the Chicago field 
office, where he investigated white collar crime, public 
corruption, organized crime, and various drug matters. He also 
had a distinguished career since then, having served in 
numerous important positions, including as supervisory special 
agent in the Counterterrorism Division, Weapons of Mass 
Destruction Operations Unit at the FBI headquarters, and head 
of the Joint Terrorism Task Force for the Denver field office.
    We appreciate you being here because in September of 2012, 
Mr. Campbell was promoted to deputy assistant director of the 
Criminal Investigative Division. And I think you provide a 
valuable insight.
    We welcome the Honorable Alan Wilson, the attorney general 
of the State of South Carolina. Mr. Wilson was elected South 
Carolina's 51st attorney general on November 2 in 2010 and 
reelected again in 2014. As South Carolina's attorney general, 
Mr. Wilson is the State's chief prosecutor, chief securities 
officer, and the State's chief legal counsel. Mr. Wilson joined 
the National Guard immediately after joining college. He was 
called to serve in Iraq where he led troops through Army fire 
and earned a combat action badge.
    We thank you, sir, for your service to our country.
    Today he continues his military service by providing legal 
support for soldiers and assisting the prosecution of military 
crimes as a lieutenant colonel in the Judge Advocate General 
Corps.
    We thank you again for your service.
    We're also pleased to have the Honorable Donald Kleine, 
Douglas County attorney in Douglas County, Nebraska. Mr. Kleine 
was elected Douglas County attorney in November of 2006. He was 
reelected again in 2010, and again in 2014. In his years as a 
prosecutor, Mr. Kleine has tried numerous high-profile criminal 
cases. He is on the faculty at Creighton University School of 
Law teaching the trial practice and criminal prosecution. He is 
a past president of the Nebraska County Attorneys Association 
and a member of the board of directors in the National District 
Attorneys Association.
    We also are pleased to have the Honorable Mark Lipparelli, 
member of the Nevada State Senate. He has an extensive private 
sector background, having worked for some organizations, 
including Bally Technologies, Shuffle Master, Casino Data 
Systems, and in 2013 Mr. Lipparelli completed a 4-year term on 
the Nevada State Gaming Control Board, including his final 2 
years as the chairman of that board.
    We have a good panel. We look forward to a robust 
discussion. We thank you all for being here. But pursuant to 
committee rules, all witnesses are to be sworn before they 
testify. So if you will please rise and raise your right hands.
    Thank you.
    Do you solemnly swear or affirm that the testimony you are 
about to give will be the truth, the whole truth, and nothing 
but the truth?
    Thank you. If you'd please be seated.
    And let the record reflect that the witnesses all answered 
in the affirmative.
    In order to allow time for members to ask questions, we 
would appreciate it if you would limit your oral presentation 
to no more than 5 minutes, despite the example--well, I set. 
But be assured that your entire written record will be made 
part of the record.
    Mr. Campbell, we'll start with you. You're now recognized 
for 5 minutes.

                       WITNESS STATEMENTS

                STATEMENT OF JOSEPH S. CAMPBELL

    Mr. Campbell. Good afternoon, Chairman Chaffetz, Ranking 
Member Cummings, and members of the committee. Thank you for 
the invitation to appear before you today to discuss online 
gambling and the potential criminal activity that could arise 
within it.
    As assistant director of the FBI's Criminal Investigative 
Division, the responsibility to manage, coordinate, and direct 
investigative programs focused on financial crime, 
transnational organized crime, civil rights violations, public 
corruption, crimes against children, and drug-related and 
violent crime, fall to the hard-working special agents and 
professional staff working with me. Together, we remain 
committed to the goals and vision set forth by FBI Director 
James Comey to uphold the Constitution and protect the American 
public from criminal wrongdoing.
    We appreciate the committee's interest in the threat posed 
by online gambling, which can have connections to many other 
forms of criminal activity. Illegal gambling businesses, 
specifically Internet sports books, have become increasingly 
popular in the United States, as well as abroad. The existence 
of these Web sites has grown exponentially over the past few 
years. The National Gambling Impact Study Commission reported 
illegal betting on sporting events in the United States is 
estimated to range between $80 billion to $380 billion 
annually.
    The Federal Bureau of Investigation works hard to establish 
and maintain strong partnerships with both public and private 
entities in order to combat illegal gambling. One of our 
priorities has been to work with private sector partners like 
the American Gaming Association to publicize our Internet Crime 
Complaint Center, IC3. The IC3 is an online tool which allows 
the public to report tips about suspected online criminal 
activity, including illegal gambling.
    Any discussion of issues concerning online gambling should 
include the potential for money laundering. Money laundering is 
rightly defined as any transaction that seeks to conceal or 
disguise proceeds from illegal activities. Thus, it is any act 
that converts proceeds gained from illegal activity into assets 
that appear legitimate. Money laundering can undermine the 
integrity and stability of financial institutions and systems, 
discourage foreign investment, and distort international 
capital flows.
    We suspect online casinos are potentially susceptible to 
criminal and money laundering schemes. Online gambling could 
provide criminal actors with the potential to be anonymous. The 
use of the TOR network, proxy servers, and encryption through 
virtual private networks could potentially conceal a player's 
identity, location, and true gambling activity.
    Criminal actors could fraudulently manipulate games and 
conspire with other to use their online gambling accounts to 
transfer criminally derived funds to each other. A private 
tournament or game could create a platform allowing one person 
to transfer funds to another person. Once the private 
tournament is created, the criminal actor could raise their bet 
to the maximum permitted bet and then fold or intentionally 
lose.
    The movement of funds which appears as gambling winnings to 
one and gambling losses to the other is simply a transfer of 
criminally derived funds. One of the goals of criminals who 
generate revenue from criminal activity is to launder their 
proceeds through our financial systems to make the funds appear 
legitimate. Criminal actors use numerous methods to launder 
their proceeds. One of those methods is through the use of 
casinos.
    Internet-based casinos, like physical casinos, can be used 
to launder criminal proceeds. A person's online gambling 
account can be funded through various methods. Some of these 
methods include prepared cards, debit cards, credit cards, 
previous gambling winnings, or in-person presence at a physical 
casino. An individual wishing to launder criminal proceeds by 
funding their online gambling account at the casino could 
structure their transactions in efforts to evade regulatory 
reporting.
    Bank Secrecy Act regulations applicable to physical casinos 
also apply to legal online casinos. These Bank Secrecy Act 
regulations are designed to detect money laundering activity. 
Bank Secrecy Act regulations also require casinos to file BSA 
reports when the casino detects suspicious funding or gaming 
activity. The FBI reviews these reports regularly.
    I thank you all again for inviting me to participate in 
this hearing today, and I look forward to taking your 
questions. Thank you.
    [Prepared statement of Mr. Campbell follows:]
    
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    Chairman Chaffetz. Thank you.
    Attorney General Wilson, you're now recognized for 5 
minutes.

                  STATEMENT OF ALAN M. WILSON

    Mr. Wilson. Thank you. Good afternoon, Chairman Chaffetz, 
Ranking Member Cummings, members of the committee. I appreciate 
the opportunity to be heard here today.
    I'd like to preface my testimony with the reality that the 
2011 Wire Act revision is one that should have been debated 
legislatively, not decided administratively by a DOJ opinion. 
Members of this committee already recognize that under our 
Constitution, particularly the 10th Amendment, the States have 
virtually exclusive authority over gambling. As the fourth 
circuit has held, ``Gambling regulation is an area where States 
have much expertise and competence, and it lies at the core of 
a State's police power,'' end quote. Each State is entitled to 
decide for itself how or whether to regulate gambling or to ban 
it altogether.
    This is the way our Founding Fathers intended the 
Constitution to work. The Federal Government should respect the 
rights of States, not destroy those rights. They should not 
legalize gambling activities the States make illegal. But the 
DOJ opinion strikes at the very heart of State powers. DOJ 
lawyers cannot rewrite what Senators and Congressmen have 
enacted. The executive branch cannot supersede the legislative. 
The original Wire Act, with its respect for State sovereignty 
and prerogatives, should thus be restored so that casino 
gambling does not operate over the Internet in the States which 
have outlawed it in their communities.
    In South Carolina, gambling is largely prohibited and has 
been throughout the history of our State. Our courts recognize 
that the public policy of the State is to prohibit gambling. In 
recent years my office, our State Law Enforcement Division, or 
SLED, and various local law enforcement agencies have had to 
combat short-term proliferation of Internet sweepstakes cafes 
which displayed Internet-based casino-like games on computer 
terminals in strip mall outlets, some of which even lured 
patrons with promises of free cell phones provided by the 
Federal Government.
    Furthermore, South Carolina's experience with video poker 
was traumatic. Video poker became a $2 billion industry in the 
State and carried with it such an addiction problem that there 
are stories where mothers have left children to die in cars 
while they played video poker. As a result of video poker, 
families were destroyed and gambling addictions proliferated 
exponentially. Robert Stewart, our then chief of SLED, even 
warned that video poker was bringing organized crime to South 
Carolina.
    Despite South Carolina's continued best efforts over the 
decades to protect our citizens from the threats posed by 
gambling, DOJ's revised interpretation of the Wire Act has 
opened the door to Internet gambling, potentially turning any 
mobile device in our State into a virtual casino. What South 
Carolina's legislature has specifically shut down DOJ has 
reopened in another form with a single stroke of a pen.
    As demonstrated in letters from governors and attorneys 
general to Congress on this matter, States are befuddled that a 
180-degree turn in Federal policy on such an important issue 
was able to occur without public comment or input. Decisions 
with such broad national policy implications as the 2011 DOJ 
opinion, which abandoned 50 years of DOJ policy, should be 
debated by Congress, not left to a lawyer at the Justice 
Department operating within a vacuum.
    This unilateral opinion has opened a Pandora's box of 
enforcement issues for States like South Carolina. Overnight, a 
DOJ attorney transformed casino gambling from a tightly 
controlled activity requiring interstate or international 
travel for South Carolinians to an app on a smartphone 
available 24/7 with the tap of a finger.
    While it is reasonable to assume that one day in the future 
technology will be in place in virtual casinos to prevent these 
sites from being accessed in another geographic area, the 
reality is offices like mine charged with the responsibilities 
of enforcing our own gambling laws and protecting the public 
cannot be expected to rely on the good faith of massive 
foreign-owned gambling companies licensed by other States.
    Our system of government reserves intrastate matters, 
including the regulation of gambling at brick-and-mortar 
facilities and intrastate lotteries, to the States. But the 
Internet, as the Justice Department has successfully argued in 
the courts, is inherently interstate, and so are any gambling 
casinos offered online. States are ill equipped to enforce 
gambling laws against interstate and international companies, 
particularly given the technological vulnerabilities of the 
Internet and age and location verification mechanisms that are 
subject to compromise.
    The 2011 DOJ opinion endangers citizens of States like 
South Carolina, especially our children. As a result of this 
opinion, States with strict laws prohibiting online gambling 
are forced to rely on the promises of foreign gaming 
corporations and the regulatory agencies of other States which 
have legalized online gambling, despite their best intentions.
    If we have trouble protecting our children from 
cyberbullying and other Internet crimes-against-children cases, 
then how can we expect a State to protect our youth from the 
potential harm of putting an online casino in their pocket. 
This is why I appreciate this committee's thoughtful efforts to 
address this serious threat to the citizens of my State and of 
our country and support legislation to restore the traditional 
interpretation of the Wire Act. Thank you.
    [Prepared statement of Mr. Wilson follows:]
    
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    Chairman Chaffetz. Thank you.
    Mr. Kleine, you're now recognized for 5 minutes.

                 STATEMENT OF DONALD W. KLEINE

    Mr. Kleine. Thank you, Chairman.
    Chairman Chaffetz, Ranking Member Cummings, and 
distinguished members of the committee, thank you for giving me 
the opportunity to speak today about the challenges of local 
law enforcement and protecting our most vulnerable citizens 
from the dangers that lurk in the realm of online gambling.
    I am the county attorney for Douglas County, Nebraska. 
Myself and other colleagues around the country, the local DAs, 
prosecute over 95 percent of the crime that occurs in America. 
Douglas County encompasses Omaha and much of its metro area and 
is home to over one-fourth of Nebraska's residents.
    As this committee is well aware, prior to 2011 the 
Department of Justice interpreted the Wire Act to prohibit 
wagering of any kind over interstate telecommunications, 
including the Internet. The Wire Act essentially serves as a 
Federal prohibition to online gambling.
    In 2011, DOJ revised its longstanding interpretation of the 
Wire Act to only apply to wagers placed on sporting event s, 
opening the door to online gambling in States without any input 
at all from law enforcement. The FBI has warned Congress that 
online gambling is uniquely vulnerable to criminal activity, 
but DOJ's dismantling of the Wire Act eliminated the risk of 
Federal prosecution for online gambling. This left policing of 
online gambling to State and local officials with limited 
resources.
    For example, the Douglas County Attorney's Office, my 
office, has an annual budget of approximately $8 million. We 
have 56 attorneys dedicated to prosecuting approximately 3,500 
felonies that occur within Douglas County. Our office is 
largely focused on violent crimes rather than online gambling. 
Moreover, while some violations of Nebraska's antigambling laws 
are felonies, many are misdemeanors, making it even more 
difficult to devote precious resources to enforcement.
    In addition to the limited resources available for 
enforcing the law, prosecution of gambling laws is especially 
difficult given that online gambling is inherently interstate 
and often has international implications. It has been my 
experience the law enforcement issues concerning in-person 
casino gambling are for the most part contained within the 
general vicinity of the gaming establishment itself. But online 
gambling easily crosses domestic and international borders and 
can often be accessed by anyone with Internet access.
    Several countries have legalized online gambling, and 
companies house servers that are accessible to people outside 
the host country. The primary companies operating these online 
gaming sites are massive foreign companies against whom it 
would be nearly impossible for my office, a local law 
enforcement DA, to bring charges. These companies recognize 
that criminal prosecution by local officials would be very 
difficult, which creates even more opportunities for these 
companies to defraud players, launder money for much more 
dangerous operations.
    Even more troubling are the risks beyond illegal gambling 
associated with many online gambling sites. Credit card fraud, 
identify theft, and other financial crimes can occur when 
players disclose information that should be kept secure. Unlike 
other licensed and regulated activities, Internet gamblers 
often do not know who is operating the gambling site, if the 
games are honest, if the winnings will be paid, or if the money 
wager will be used for criminal purposes. Once an individual 
chooses to engage in online gambling activities, there are few 
remedies should they fall victim to a dishonest site.
    The anonymous virtual nature of online gambling also 
increases opportunity to gamble more frequently. As I left my 
office yesterday, we had two new felony cases come in just from 
people who had gambling issues, and they obviously committed 
other crimes because of their gambling problems. As a county 
attorney, I have prosecuted numerous crimes stemming from 
gambling issues, including white collar crimes involving 
significant sums of money, to neglect cases from parents not 
caring for their children due to gambling issues.
    Easy access to gambling is particularly dangerous to young 
people, who are two to three times more likely to develop a 
gambling problem. The Mayo Clinic compares the physiological 
impact of gambling to the impact drugs have on a brain's reward 
system. From the mental and emotional perspective, pathological 
gamblers are at an increased risk to develop stress-related 
conditions, major depressive episodes, anxiety disorders, or 
substance abuse issues. Impulsive gambling can also lead to 
financial loss, increased crime, lost time at work, 
bankruptcies, strained relationships with family members, and 
even homelessness.
    Finally, online gambling activities are extremely difficult 
to monitor because users can remain largely anonymous. Law 
enforcement often has limited tools to identify who is gambling 
illegal and from where they are engaging in the unlawful 
activity. Any smartphone, tablet, or laptop can be a vehicle 
for online gambling, and it is virtually impossible to pinpoint 
players who sign on from isolated networks.
    Members of the committee, thank you for the opportunity to 
share my concerns with you today regarding the dangerous 
consequences of online gambling and the resources required to 
support a state-by-state regulating scheme. Law enforcement is 
charged with protection of our most vulnerable citizens, but we 
cannot be expected to accomplish this monumental task alone. We 
need the important resources and expertise of the FBI and 
Federal law enforcement to ensure those online gambling 
companies preying on our citizens are brought to justice. Thank 
you.
    [Prepared statement of Mr. Kleine follows:]
    
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    Chairman Chaffetz. Mr. Kleine, thank you.
    Mr. Lipparelli, you are now recognized for 5 minutes.

                  STATEMENT OF MARK LIPPARELLI

    Mr. Lipparelli. Thank you Mr. Chairman and members of the 
committee, for the invitation to speak today. I am Mark 
Lipparelli, and I was asked to present the result of the 
emphasis of my work for the past 7 years and my over 22 years 
of experience in the gaming technology field.
    In January of 2009, I was appointed by the Governor of my 
State to the Nevada Gaming Control Board, and in January of 
2011, I was elevated to the position of chairman. I also served 
on our State's Gaming Policy Committee that adopted support of 
regulated interactive gaming in our State. This is relevant 
because during my tenure on the Board, our State embarked on 
creating the first set of gaming regulations governing legal 
interactive gaming in the United States.
    I concluded my tenure on the Gaming Control Board in 
October of 2012, and since that time have provided advisory 
work to a number of entities engaged in the gaming, technology, 
sports, and investment sectors. I'm also the cofounder of the 
International Center for Gaming Regulation at the University of 
Nevada, Las Vegas, and currently serve as a Nevada state 
senator. I would add that prior to serving on the Board, I 
spent 15 years in senior management positions with some of the 
industry's leading gaming technology providers. The comments I 
make today are my own.
    As you continue to review igaming and the related role of 
law enforcement, I can tell you confidently your committee is 
now in a position to benefit from a significant amount of 
deliberation and contribution from many well-informed and 
experienced operators, regulators, technologists, and industry 
experts. Unlike 2009, we are no longer in greenfield.
    We have learned a great deal in the past 6 years. The 
creation of enabling law and regulation in three States and a 
large number of informed studies and debates, as well as, 
perhaps most importantly, the creation, testing, and deployment 
of many igaming systems throughout the world has created 
concrete knowledge that does now and should replace 
speculation. The healthy portion of the knowledge gained also 
comes from international markets that by our U.S. standards are 
not highly regulated.
    From a regulatory and law enforcement perspective, Nevada, 
New Jersey, and Delaware have been successful. Where there were 
concerns over licensing, protecting children and the 
vulnerable, player protection, tax collection, money 
laundering, and geolocation, these States have had good 
success. I have provided further discussion of these items in 
my full remarks.
    We know there have been many attempts to compromise these 
systems, but those issues are being revealed, thwarted, 
evaluated, and, where warranted, new standards are implemented. 
This is a hallmark of gaming regulation of the traditional 
casino business.
    I would provide praise to my former colleagues in Nevada 
for beginning this effort, and particular praise of the efforts 
of Dave Rebuck and the New Jersey Division of Gaming 
Enforcement. Unlike Nevada, where regulations currently 
authorize only online poker, New Jersey chose to implement all 
forms of gaming. This no doubt expanded the scope of the effort 
and the energy to get it right.
    Like any innovation, ongoing diligence and continued 
product improvements will be necessary to meet the constant 
work of those who seek to compromise laws and regulations. The 
three existing U.S. markets and several regulated markets in 
Canada have now applied their knowledge to actual operations, 
and historical speculation has given way to their success and 
foundation knowledge.
    Future regulatory agencies that consider igaming 
legislation will be subject to inquiry from those seeking 
clarity on the subject of licensing, product submissions, site 
approvals, employee registrations. These questions have been 
widely debated, tested, and largely addressed. To the degree 
possible, I have advised governments, law enforcement, and 
regulatory policy advisers to provide for a broad statutory 
framework but leave the specific requirements to the 
regulations. This approach gives regulators, the experts in the 
field, more opportunity to adjust to changing technology and 
provide flexibility where appropriate.
    Depending on the underlying products that may be introduced 
in the future, it is important that law enforcement and 
regulators strike an appropriate balance of clarity and 
regulatory policy. Where the intent is to allow full 
commercial-style casino games, a more robust form of oversight 
is likely warranted. Where there are other forms of online 
gaming entertainment that fall short of these definitions, 
lighter forms of regulation may suffice.
    I have a couple concluding remarks. One, I would not leave 
this subject without specific reference to what I consider to 
be the much bigger policy challenge. In my opinion, illegal 
gaming operators need to be put in the spotlight. These 
operators continue to exist in the shadows and enjoy untaxed 
and unregulated operations.
    This is an area where States that have authorized gaming 
and those that have not need to work together with Federal law 
enforcement to continue to reveal these rogue operators. It is 
a continual effort, but cooperation between all levels of 
government, financial institutions, and licensed operators is 
critical. If illegal nontaxing operators are allowed to freely 
compete untested with unregulated products, the playing field 
will remain unlevel and consumers will be unprotected.
    Nevada, New Jersey and Delaware, as well as many test labs, 
have begun to reverse this trend. In the short and the long 
term, the lasting impacts on licensed operators will be 
significant. This knowledge must be shared with other States 
and the Federal Government as policies are shaped.
    Number two, the pace of U.S. legalization has to date been 
modest. This has largely abated concerns 5 years ago that 
igaming would spread too quickly without proper oversight and 
without actual knowledge that it could be effectively 
regulated. Even with our law in Nevada in place for over 15 
years, we remain only a poker jurisdiction, and several States, 
after study, elected not to proceed with igaming legislation.
    Three, there's a host of attendant businesses that desire 
further clarity around igaming policy. These include financial 
institutions, handset providers, network providers, credit card 
issuers, and many others. In nearly every case, they too seek 
the advantage of legal markets and seek to avoid those who are 
not providing such clarity.
    Four, technology innovation is taking place at a higher and 
higher speed and consumers are adopting mobile preferences. 
Newer technology to protect State choices on allowing or 
prohibiting igaming is getting stronger and more diverse. For 
example, the proximity of New Jersey to New York and 
Pennsylvania highlights these protections in operation.
    Five, consistency in igaming regulation is very important. 
The security of any system is made more difficult if we end up 
with an application code that varies widely from market to 
market. If policy changes are considered, this should be kept 
firmly in mind.
    And lastly, you have no doubt heard and will continue to 
hear from those who suggest that the risks are simply too great 
or that you cannot be given complete assurance that legal 
igaming can be properly governed. As chairman, these concerns 
were very real for me. No other State had taken up the 
regulation of igaming, and we had a 75-year history to protect. 
My Governor, himself a former Gaming Commission chair, attorney 
general, and Federal judge, made it clear to me that outside 
risk was not in his or our State's interest.
    However, after spending 6 years with experts in the field, 
developers of products, independent test labs, and regulators, 
from Alderney, the United Kingdom, Gibraltar, France, Italy, 
Malta, and the Isle of Man, Singapore, and many others, I can 
give you confidence that the regulated market model does work.
    That said, you must be willing to accept that this market, 
like any market, is not entirely bulletproof prove. As markets 
grow, there will no doubt be challenges. I expect we will 
uncover new risks that we did not anticipate despite our 
exhaustive efforts. State regulators and independent test labs 
have and will continue to act to address those challenges.
    Thank you very much for your attention. I am happy to 
answer any questions you may have.
    [Prepared statement of Mr. Lipparelli follows:]
    
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    Chairman Chaffetz. Thank you.
    Before I get to our questioning, I have two UC requests. 
First, the chair notes the presence of our colleague, 
Congresswoman Dina Titus from Nevada. While she's not a member 
of the Oversight Committee, we thank her for the interest in 
the hearing topic, and I'd ask unanimous consent that Ms. Titus 
be allowed to fully participate in today's hearing.
    Without objection, so ordered.
    I also have a series of letters that I would ask unanimous 
consent to enter into the record. (1) A letter from eight State 
attorneys general urging Congress to restore the longstanding 
interpretation of the Wire Act. (2) A letter from the Nevada 
attorney general, Adam Laxalt, expressing the need for 
congressional review of the Wire Act and the 2011 OLC memo. (3) 
A letter from 16 State attorneys general urging Congress to 
restore the longstanding interpretation of the Wire Act. (4) A 
letter from Congressman Bill Young that was dated September 20, 
2013, stating online casinos are vulnerable to a wide array of 
criminal schemes. (5) A letter from the FBI to Congressman 
Spencer Bachus dated November 13, 2009, expressing concerns 
with online gaming, including its potential use for money 
laundering.
    Individual letters from various governors across the 
country, all expressing concerns with online gaming and the 
need to address the Wire Act: (6) Arkansas Governor Asa 
Hutchinson from Arkansas, (7) Utah Governor Gary Herbert, (8) 
Florida Governor Rick Scott--again, these are all individual 
letters--Florida Governor Rick Scott, (9) South Carolina 
Governor Nikki Haley, (10) Texas Governor Rick Perry, (11) 
Indiana Governor Mike Pence.
    (12)A letter from Congressman George Holding expressing 
concerns with online gaming. (13) A letter from the Family 
Research Council expressing support to restoring the Wire Act. 
(14) As well as a Newsweek cover story on the issue.
    Without objection, I would like to enter these into the 
record. Without objection, so ordered.
    Chairman Chaffetz. Now we'll get to the questioning. I 
would like to recognize the gentleman from Kentucky, Mr. 
Massie, for 5 minutes.
    Mr. Massie. Thank you, Mr. Chairman. And thank you for 
holding this hearing.
    Mr. Campbell, my first question is for you. Approximately 
how much of the FBI's budget is dedicated to regulating and 
enforcing laws on Internet gambling? What percentage, if you 
would, not asking for an exact number.
    Mr. Campbell. I don't have with me the exact percentage 
related to the budget that we dedicate it to. However, I can 
tell you that----
    Chairman Chaffetz. If you can move--all of you, if you can 
that microphone up close and snug and turn it right--there you 
go. Thank you.
    Mr. Campbell. Okay. However, in regard to our 
investigations regarding this violation, it could cross a 
number of areas that of course are funded, such as 
transnational organized crime, potential terrorism financing, 
other criminal enterprises involved in it.
    Mr. Massie. Speaking of that, have you prosecuted anybody 
for terrorism financing using Internet gambling as a nexus?
    Mr. Campbell. We do have one investigation that we did 
conduct where the individual used, among other things----
    Mr. Massie. Was there a prosecution?
    Mr. Campbell. --gambling for money laundering purposes and 
so forth.
    Mr. Massie. Was it one of these Internet gambling sites in 
one of these three States that allow it?
    Mr. Campbell. I don't have that information. I can provide 
you with more particulars on that.
    Mr. Massie. How big of a priority is this and how prevalent 
of a problem is it compared to, say, terrorism--for the FBI--
compared to terrorism, insider trading, counterfeiting, 
political corruption? Is it more important than any of those?
    Mr. Campbell. Well, it fits into the priority in the sense 
that as we go after critical organizations that can hurt 
America--and, again, whether those are transnational organized 
crime groups, other criminal enterprise groups, terrorism, 
etcetera--we look for any and all violations that those 
individuals are involved in. And certainly if it involves 
online gaming, we're going to pursue that threat and fully 
investigate that aspect.
    In addition, as information comes to us whereby online 
gaming may be occurring in an illegal manner or promoting those 
types of threats, we're going to drive most definitely as a 
priority.
    Mr. Massie. But your testimony is that today, so far, you 
are not aware of any terrorism that's been financed using 
Internet gambling in any of the three States.
    Mr. Campbell. As I said, I can take that back, and we can 
do some further analysis to determine----
    Mr. Massie. But right now you're not aware of it.
    Mr. Campbell. But as I sit here, I do not have that answer.
    Mr. Massie. Mr. Campbell, following up, can't States just 
pass laws to prevent their own citizens from gambling on the 
Internet?
    Mr. Campbell. Well, certainly it's up to the States to 
determine how they might want to police online gaming. From our 
perspective, we use a number of statutes, the illegal gambling 
business statue, Unlawful Internet Gaming Act, as well. The 
Travel Act, the money laundering statutes, bank fraud, wire 
fraud, mail fraud, etcetera. And we partner with States in 
investigations and prosecutions.
    Mr. Massie. Attorney General Wilson, same question for you. 
Can't your State just pass laws regulating this in your State?
    Mr. Wilson. It's my opinion that it would not be practical 
for States on a state-by-state and a quilt-like matter to pass 
laws on something that the Federal law has passed unanimously 
across all 50 States.
    Mr. Massie. Is that because of enforcement?
    Mr. Wilson. Well, it is very difficult from an enforcement 
purpose. I mean, it is extremely difficult to enforce.
    Mr. Massie. Well, here's my concern. And my next question 
is for Mr. Lipparelli. I want to know if you have the same 
concern that I do that if we pass a national online gambling 
prohibition, under the presumption that it's necessary for 
Federal legislation to overturn--essentially overturn State 
laws, to deal with a State problem on it, you know, because 
they don't want to do it on a state-by-state basis, couldn't 
that logic be used in the same way with gun control, for 
instance? Because if a State's allowed to sell guns in one 
State, that makes enforcement of gun control laws in another 
State difficult. Isn't there sort of the same logic at play 
there? Or do you share that concern?
    Mr. Lipparelli. I wasn't prepared to discuss gun control in 
today's hearing. But what I would say to that question is----
    Mr. Massie. Well, let's just back it up to the 10th 
Amendment, then.
    Mr. Lipparelli. Right. What I would say to that question 
are two things. State laws that exist today that either 
authorize or make illegal gaming operations apply every bit as 
much to something that is exposed on the Internet as it would 
be in a brick-and-mortar facility. For example, in the State of 
Nevada, you no more have a right to expose a gambling game on 
the Internet as you do going down the street and opening up a 
building without a gaming license. So those State laws apply 
regardless. And so that would be my response, is State law 
already prevails regardless of whether it's Internet or not.
    Mr. Massie. So just in closing, I would say that I do have 
that concern, that if we use this logic at the Federal level 
that it's hard to enforce, for instance, gun control laws in 
one State so we have to have a universal ban, that seems like 
the same logic that we're using here by prohibiting Internet 
gaming. That is just my concern, Mr. Chairman. And thank you. I 
yield back.
    Chairman Chaffetz. No, listen, I appreciate your thought on 
this. I know you care about this issue.
    I would just add to my colleague that the Department of 
Justice, second only to the financial sector, more than a 
billion dollars in fines--a billion. So they are pouring an 
awful lot of resources into this, and there have been quite a 
few incursions in this category.
    We now recognize Mrs. Watson Coleman for 5 minutes.
    Mrs. Watson Coleman. Thank you, Mr. Chairman.
    You know, the three States that have created a regulatory 
framework to allow licensed online gambling operators have 
already greatly reduced the risk of collusion of money 
laundering due to regulated sites.
    So, Mr. Campbell, I need to ask you, has the FBI had any 
successful convictions of a regulated gambling operator, or 
have you seen an increase in criminal activity through the 
regulated gambling sites?
    Mr. Campbell. So for the FBI, we're more concerned with 
those businesses that are operating illegally outright. 
However, we do look at information that we receive that could 
demonstrate that a regulated gambling business might be acting 
illegally. I think an important point to make is that 
individual subjects, criminals, could still be utilizing any 
legal gambling business for illegal activity, such as money 
laundering, and then to support other illicit criminal 
activity.
    Mrs. Watson Coleman. Possibly. However, has the FBI any 
record of these instances that I've asked about?
    Mr. Campbell. I don't have the specific details regarding 
that. I can take that back and see whether that does in fact 
exist.
    Mrs. Watson Coleman. And whether or not you've seen an 
increase in criminal activity on those sites.
    The other thing, Mr. Campbell, I wanted to ask you, what 
are some of the challenges that the FBI faces in going after 
illegal online gambling schemes that are unregulated and 
offshore? And are there measures to counteract those challenges 
on the regulated sites?
    Mr. Campbell. Well, certainly, as with any investigation, 
whether it's nationally or globally based, we're going to 
utilize all investigative techniques in order to gather 
information about what criminal activity may be occurring, 
which includes working with our State, local, Federal, and 
private sector partners, and even foreign government partners 
related to that particular threat. So regardless of the 
circumstance, we're going to apply the same techniques and 
utilize every capability to obtain evidence for a prosecution.
    Mrs. Watson Coleman. I can appreciate that. So I just kind 
of want to, for the record, in that that might be the case, you 
have not come here today with any particular knowledge about 
problems of this nature in the three States that have the 
regulated online gambling and you would have to find out if 
there's such a record and let us know. Is that right?
    Mr. Campbell. That is correct.
    Mrs. Watson Coleman. Thank you, Mr. Campbell.
    Mr. Campbell. I would have to provide you some other 
information on that. That's correct, yes.
    Mrs. Watson Coleman. With the little bit of time that I 
have left, I'd like to contrast the kind of challenges that 
have been discussed here by the panel with what happens when 
States do regulate online operations.
    And so, Mr. Lipparelli, I'd like to know from you, from 
your experience, what controls are in place on regulated online 
gambling sites that make it easier to catch attempts at 
criminal activity like money laundering or collusion?
    Mr. Lipparelli. It's a very fair question. One thing that 
is probably misrepresented too many times in the public is the 
U.S. regulated industry of igaming dramatically differs from 
our counterparts in most foreign jurisdictions. We set in place 
what many people in foreign jurisdictions criticize us as a 
very tight system.
    So everything from player registration all the way down to 
player transactions is completely transparent to the regulator. 
So there is a relational database that identifies issues 
associated with potential fraud, collusion, player 
manipulation, credit issuance, the laundering of money.
    It would be my considered opinion that if you were going to 
try to launder money, a legal regulated site would probably be 
the last place that you'd want to try to do that. From a law 
enforcement perspective, the tools we put in place are quite 
robust and would lead right to the doorstep of those that were 
using illegal site for those kinds of purposes.
    Mrs. Watson Coleman. I know that no system can be perfect 
and no enforcement effort is actually perfect. But to your 
knowledge, are there sufficient layers of identification 
requirements that would ensure that an individual is playing 
from a legalized State in a State that has regulated gambling, 
a geolocation issue?
    Mr. Lipparelli. There are, to answer your question directly 
and separately. Beyond that, it's not just simply identifying 
the IP address. The standards that I think were referenced by 
one of the witnesses here relate to very specific knowledge of 
the location of the transaction. It also incorporates tools 
that require users to disable certain functions on their 
computer so as to prevent people from disguising their 
location. If those applications are actually operating while 
the site is accessed, the site will deny access.
    Mrs. Watson Coleman. Thank you.
    Mr. Lipparelli. So there are number of technical standards 
that have been put in place and tested to prevent that from 
happening.
    Mrs. Watson Coleman. Thank you, Mr. Lipparelli.
    My time is up. Thank you, Mr. Chairman.
    Chairman Chaffetz. Thank you.
    I now recognize the gentleman from South Carolina, Mr. 
Mulvaney.
    Mr. Mulvaney. I thank the chairman.
    Thank you, gentlemen, for participating.
    Alan, thanks especially for coming up. It's always good to 
have folks from back home contribute to this process. And thank 
you for your service to our State.
    Help me, because when I heard you were coming up I was 
excited, but I didn't expect you to be on this side of this 
issue. You've taken some positions that I support in other 
areas, from health care, to gay marriage, to EPA regulation. 
You've been taking the position against Federal control, which 
I wholeheartedly support.
    And I read your testimony today, not the stuff that you 
were able to get to when you opened, but your testimony has got 
some really good lines in it. ``The members of this committee 
should recognize that under our Constitution, particularly the 
10th Amendment, the States have virtually exclusive authority 
over gambling.'' ``Each State is entitled to decide for itself 
how or whether to regulate gambling or ban it all together. 
Congress has always recognized the preeminent State interest in 
gambling regulation.'' I could go on. And then to have you come 
up and take a position here that sounds like you're for Federal 
control, I can't square those two things.
    I've got this last quote, which says that, ``The DOJ 
opinion strikes at the very heart of...It should not legalize 
gambling activities the States make illegal.'' I get that and I 
agree with that, the Federal Government should not legalize 
stuff that the States have made illegal.
    But I'm waiting for the other half of that statement, Mr. 
Chairman, which is, should the Federal Government also make 
illegal that which other States have made legal? And there are 
three States who have done this.
    So help me square these two things.
    Mr. Wilson. First off, let me say this. I'm not up here--
I'm not going to speak for anyone else today--I'm not up here 
to say that gambling should be made illegal. I think if New 
Jersey--my wife is from New Jersey, I love your State--New 
Jersey or other States want to have a robust gambling industry, 
they should be free to pursue that. The members in this room 
who want that should be allowed to have it.
    Mr. Mulvaney. But if the bill passes, that's why she's 
here, she's afraid if the bill passes she loses the right to do 
that.
    Mr. Wilson. What we are talking about is interstate 
commerce, which Congress has the authority to regulate under 
Article I, Section 8. There is no dispute up here that Congress 
can write the Wire Act, that Congress can regulate online 
gambling because it is interstate in nature. That is not the 
dispute. If----
    Mr. Mulvaney. Alan, let me stop you there, because I think 
that's right, and I'm hopefully moving to an area we can agree 
on, because I am wondering if there is not a better way do what 
we want to do in South Carolina, where it's not legal, but 
still allow New Jersey and Nevada to do what they want to do, 
which is to use technology instead of regulation. If we can 
figure out a way to make sure that only New Jersey residents 
gamble online, in licensed New Jersey enterprises, using 
technology, isn't that another way to accomplish what you want 
to accomplish?
    Mr. Wilson. I believe that if online gambling, if it is 
allowed by the Federal Government, you're basically putting a 
virtually floating casino over every State or in every pocket 
of every teenager or young person who wants to be able to 
access it.
    Mr. Mulvaney. I get that, but in your testimony what you 
say is that the reinterpretation essentially allows States to 
operate online casinos in States like Nevada, Delaware, New 
Jersey without any assurance that these online casinos are not 
being accessed in States like South Carolina. You also say that 
the original Wire Act, with respect to states' rights and 
prerogatives, should thus be restored so that casino gambling 
does not operate over the Internet in the States which have 
outlawed it in their communities.
    And what I am asking you is, isn't there perhaps another 
way to prevent kids in South Carolina from accessing gambling 
sites, legal gambling sites in New Jersey, Nevada or Delaware, 
other than Federal regulation?
    Mr. Wilson. And I don't know that that way exists. I heard 
Ms. Coleman eloquently say that she believes as a matter of 
policy that verification can be enforced. I saw the little 
points up there on the map. I don't know if those were 18-year-
olds or people crossed the river to gamble. The point is, is 
that if you make online gambling legal at the Federal level, 
then you have basically legalized it in States where they don't 
want gambling at all.
    Mr. Mulvaney. Your objection to this is not that the 
information might happen to cross state lines in the process of 
going over the Internet. That's not the issue here, right? It's 
the process of having a person in South Carolina access 
something in Nevada, that's the interstate nexus for you here, 
correct?
    Mr. Wilson. Correct.
    Mr. Mulvaney. So if we could figure out a way to fix that, 
I would simply suggest if there's a way to fix it through 
technology that Mr. Lipparelli has mentioned, maybe that is an 
alternative and less intrusive way to deal with the issue.
    And here is why I care. And I have all the respect for my 
colleague from New Jersey. But unbeknownst to you and maybe the 
other folks on the committee, in fact maybe folks on the 
committee here, she's introduced a bill that has a lot of 
similarities to what Mr. Massie mentioned earlier, which is to 
ban Internet ammunition and gun sales through a similar 
requirement to what you've just been talking about here, by 
making people actually show up in person to show their ID. I 
can't remember the name of the bill--the Stop Online Ammunition 
Sales Act of 2015. And that's one of my fears here, is that 
they are asking you to instead of being consistent in the state 
rights position, they come out and say, well, here is a place 
where we really do need Federal intervention so that people in 
South Carolina can't access legal Internet gambling in Nevada, 
and then use it to say, oh, by the way, it really is hard for 
New Jersey to enforce our State laws on gun control because you 
can just go online and buy one in South Carolina. And that's 
what I'm worried about, is that we're going to go through 
regulation and expand the role of the Federal Government as 
opposed to limit it.
    So, anyway, with that, I yield back the balance of my time.
    Sorry. Go ahead.
    Mr. Wilson. May I respond real quick? And, Representative 
Mulvaney, I agree with you on many of your points. I would just 
add that one of the points regarding--what was the last comment 
you made? It was----
    Mr. Mulvaney. Gun control.
    Mr. Wilson. The gun control. I absolutely would be against 
that. I just believe at the end of the day that online gambling 
is a very unique industry and that when you make online 
gambling proliferate across the country, it is very difficult 
for States like South Carolina to enforce its gambling laws. I 
believe under the 10th Amendment States should be able to 
outlaw Internet gambling, but those States that want gambling 
in there can certainly pass those laws that allow it to occur.
    Mr. Mulvaney. Last question, Mr. Chairman, I promise.
    Chairman Chaffetz. I need to go to--no, I need to go to----
    Mr. Mulvaney. Oh, come on, you took, like, 10 minutes.
    Chairman Chaffetz. I know. I didn't ask any questions.
    So we're going to go to Mr. Cummings from Maryland.
    Mr. Cummings. Thank you very much, Mr. Chairman.
    I'm listening to all this, and if I were a judge listening 
to this, the first question I would want to get to is the 
bottom line. And what I said in my opening statement, it's 
about money. Would you agree that if we were to outlaw online 
gambling, that the bricks-and-mortar people would make more 
money? Anybody disagree? I don't see any disagreement down 
there.
    And I guess the reason why I'm getting to go that is 
because, I mean, you know, we in the Congress, we are--most of 
us--well, some of us, but I don't--have the kind of money that 
the big players are playing with. And we have to try to 
figure--we're trying to figure out how to deal with this 
dispute. But there are some things that are coming through from 
what you're saying that I think we can kind of get down to the 
bottom line of this.
    It sounds like the issue of illegal gambling, which I don't 
think--I think all of us want to get rid of illegal gambling--
it's one thing, Mr. Campbell. And my question is, so you don't 
feel that you have the tools to deal with illegal gambling? 
Hold that for a second, hold that.
    And then I want to come to you, Mr. Lipparelli. Let me ask, 
with you it sounds like what you're saying, if we can steer 
more gamblers, in other words, if we're going to--if we can--if 
the States can do the regulating, then a lot of the problems 
that Mr. Campbell talks about should be resolved because you 
used the term relational database.
    What he's talking about is information, and you're saying 
we're getting the information that would actually allow him to 
do a more effective job. Am I missing something? Because this 
is what seems like out of everything that you all have said, to 
me, this whole thing boils down to what I just said. Help me.
    Mr. Lipparelli. Mr. Cummings, the requirements that we put 
in place were exactly that. If we're going to allow online 
gaming, there will be player registrations, there will be 
complete tracking of activity, so that to the extent these 
sites were ever to be used or attempted to be compromised, the 
audit trail or the transparency trail is there for the 
regulators.
    So the quick answer to your question is, yes, we want 
players to move to and off of illegal gaming sites. That's 
often missed in this discussion, is these illegal sites are 
readily available to all the U.S. public. They were available 
prior to 2011 letter or the opinion that was authored. They 
were available.
    And by the way, the reference of the chairman with respect 
to the substantial fines that were paid were paid by people who 
broke the law who were illegal. Those weren't legal regulated 
sites that paid those fines, those were people that were 
trafficking in our country, in our States, who ran to the steps 
of the Justice Department and said, ``We want to get right and 
we're willing to pay to do that.''
    Mr. Cummings. So now, Mr. Campbell, can you answer my 
question? I gave you some time to think about it.
    Mr. Campbell. Certainly, sir. As I mentioned earlier, we 
use a variety of statutes to go after individuals and 
organizations that are involved in illegal online gambling. And 
then of course we use statutes, such as those and others, then 
to target those criminal organizations that are using online 
gaming to support other types of more serious and nefarious 
criminal activity, like human trafficking, like narcotics 
trafficking, corruption, that type of thing. So we use a 
variety of tools in order to target that particular threat.
    Mr. Cummings. Now, going back, in 2011, going back to a 
point you made, Mr. Lipparelli, the Department of Justice 
Office of Legal Counsel interpreted the Wire Act to prohibit 
only sports betting, based on the text of the statute and the 
relevant legislative history and other materials.
    After that opinion was issued, some States legalized 
Internet gambling within their borders and regulated it. Some 
have questioned that legal opinion.
    Now, Mr. Wilson, DOJ cited two conflicting court decisions. 
One was the Federal Circuit Court of Appeals case known as in 
re: MasterCard, I know you're familiar, which held that, and I 
quote, ``A plain reading of the statutory language clearly 
requires that the object of the gambling be a sporting event or 
a contest,'' end of quote. The contrary position was taken by a 
lower Federal court in U.S. v. Lombardo. Is that right? Is that 
correct?
    Mr. Wilson. I haven't read that case.
    Mr. Cummings. Okay, no problem. DOJ took the position of 
the higher court citing the legislative history and a natural 
reading of the statute.
    Mr. Campbell, some of today's testimony has criticized the 
DOJ opinion for opening the door for Internet gambling in the 
States, but illegal unregulated Internet gambling existed in 
the States well before the 2011 opinion and continues to pose a 
risk of harm to citizens. Is that correct? Is that correct, Mr. 
Campbell?
    Mr. Campbell. Well, I can't speak to exactly the 
circumstances before 2011, but, again, we use a variety of 
tools to target that threat as it exists and as we receive that 
information.
    Mr. Cummings. But, Mr. Lipparelli, can you answer that by 
prior to 2011?
    Mr. Lipparelli. Mr. Cummings, I would answer that by saying 
the opinions that people form about the 2011 letter, I think it 
mischaracterized in such a way that before 2011 there was a 
Criminal Division letter in the form of a 1-page letter sent to 
two different States that drew a different conclusion. The 2011 
analysis by the OLC was a, I think, 16-page, fairly substantial 
opinion that interpreted the Wire Act. The decision of the 
Justice Department prior to that came in the form of criminal 
justice interpretations that came in the form of a 1-page 
letter.
    In our State, even though we had that opinion as a criminal 
interpretation by Mr. Chertoff at the time, we no more had a 
sense of whether that was the only potential interpretation of 
the Wire Act and whether that would prevent us as a State from 
doing what we thought could be done legally. And you see the 
impact of that. In 2011, that opinion changed.
    So I would say that there was a 1-page letter that 
interpreted the Wire Act one way and now a 16-page opinion that 
interpreted it a different way. Both of those were 
interpretations of an underlying law that a lot of people 
struggle with.
    Mr. Cummings. Thank you very much, Mr. Chairman. Thank you.
    Chairman Chaffetz. Thank you.
    Members are advised that we have a vote on the floor. There 
are 11 minutes left. It's the intention of the chair to 
recognize Mr. Hice of Georgia for 5 minutes and then go into 
recess. We'll resume with the Democrats going first after the 
two-vote series.
    So, Mr. Hice, you're now recognized for 5 minutes.
    Mr. Hice. Thank you, Mr. Chairman. And I want to thank you 
for holding this hearing today and for each of those who are 
joining us on the panel.
    Before I begin my questions, I've got to make it perfectly 
clear that personally I am opposed to all gambling in every 
shape, form, or fashion, be it in person or online or whatever 
it may be. Having been a pastor for over 25 years, I've 
personally seen the destruction of various addictions, and 
gambling being among them.
    So this type of hearing puts me somewhat in a quandary to 
begin with because I am opposed to gambling all together. And I 
fully agree with Georgia's Governor, Nathan Deal, who has 
publicly opposed the construction of a casino in metro Atlanta, 
and who I also know for a fact opposes any lottery offerings 
that resemble casino games.
    So I'm opposed to gambling. With that being said, I'm also 
a supporter of the 10th Amendment and our Constitution and the 
right of States. The fact is the people of Georgia voted to 
have a lottery, and there's no question that the Georgia 
Lottery has contributed over a billion dollars to the HOPE 
Scholarship and pre-K education since its inception in 1994. No 
one can deny the contribution to those programs.
    And I also know that the Georgia Lottery has been in recent 
years exploring online sales and, in fact, they have 
contributed and invested a considerable amount of money to 
ensure that those sales that customers make are in accordance 
with both State and Federal law.
    So all that being said, my first question is really to each 
of you and a brief answer. But if the technology exists to 
ensure that online sales are kept away from minors and kept 
within the State of Georgia alone, why does the Federal 
Government have a role to play? Or does it?
    I'll just start, Mr. Campbell, with you.
    Mr. Campbell. Right. So I'm not here to take a particular 
position in regard to all the aspects of your question, but 
just, again, to reiterate that the FBI enforces the laws as 
they exist and as we receive information about criminal 
activity. That's really our role.
    Mr. Hice. Mr. Wilson.
    Mr. Wilson. The Wire Act was originally ushered in through 
the Kennedy administration when then U.S. Attorney General 
Robert F. Kennedy was the Attorney General of the United States 
in an effort to help States.
    There is no violation of State sovereignty or 10th 
Amendment because Congress has the authority under Article I, 
Section 8 to regulate interstate commerce. A brick-and-mortar 
building----
    Mr. Hice. I'm talking about in the State of Georgia, not 
interstate. If the technology is there to stay within the 
State, what role does the Federal Government have? That's my 
question. And please be quick, I've got just a couple minutes 
left.
    Mr. Wilson. If it crosses State lines, an Internet 
transaction, you have a role in that regard.
    Mr. Hice. That is not my question.
    Mr. Kleine.
    Mr. Kleine. Well, the very essence of what we are talking 
about here is the Internet has such interstate complications. 
As a local prosecutor, that's what we're looking for, is help 
from the Federal Government, to say, ``Hey, we can't handle 
this.'' And I'm not aware of any way, if I said--if Nebraska 
said, ``We want to ban the Internet,'' there's no way it's 
going to happen, people are going to have access to the 
Internet. So we're looking for help here.
    Mr. Hice. Mr. Lipparelli, what would you say?
    Mr. Lipparelli. The technology exists to keep it within the 
State border. So in your direct question, surely is that there 
wouldn't be a role in that sense. There may be business ideas 
down the line that may incorporate multistate activities, but 
the quick answer to your question is they wouldn't have a role.
    Mr. Hice. Okay. Mr. Campbell, are you aware of any 
circumstances where the Georgia Lottery has failed to complete 
with State or Federal law?
    Mr. Campbell. As I sit here, I really do not have any 
information about the Georgia Lottery in general, sir.
    Mr. Hice. Okay. Well, my time a wrapping up. But it just 
seems to me that the Federal Government should not be dictating 
to the States how they operate their State lotteries or 
casinos, State-sanctioned casinos, if those States have chosen 
to go that route. And, I mean, we have got to protect the 10th 
Amendment whether or not we like the gambling issue as a whole. 
And, frankly, if there is any legislation that infringes upon 
states' rights in that regard, I believe it flies right in the 
face of our Constitutions and the limited powers that the 
Constitution provides.
    So with that, Mr. Chairman, I thank you, and I yield back.
    Chairman Chaffetz. Impressive timing.
    The committee is with 5 minutes, 30 seconds left of the 
vote, the committee will stand in recess. We will return no 
sooner than 3:10, but be flexible as regards to--be a little 
flexible in terms of when the vote series is concluded. We'll 
stand in recess and we'll be back and continue from there.
    [recess.][3:15 p.m.]
    Mr. Palmer. [Presiding.] The chair recognizes Mr. Lynch for 
5 minutes.
    Mr. Lynch. Thank you very much, Mr. Chairman.
    I have enormous respect for the chairman and the sponsor of 
this measure. I think, however, that we have different 
expectations of the result of what would happen if this bill 
were to go forward.
    In Massachusetts, I use our own example, we have an 
excellent, a smart, hard-working attorney general who handles 
this matter for us, along with our secretary of state. And, 
unfortunately, I think if the measure went forward as written, 
it would take our attorney general and the other 49 attorney 
generals off the field basically, off the battlefield, and they 
would no longer be helping in this effort, as well as the 
secretaries of state that carry responsibility in some States 
and our gambling commissions.
    So by preemption it would take that whole State framework 
off the field. And to be honest with you, I would rather see a 
situation where we had cooperation between the FBI and our 
State gambling commissions, our attorneys general, and to use 
the combined resources of those offices to get at this problem.
    I think the end result of this legislation would basically 
be to push the gambling offshore. And that's what we have right 
now and we can't reach it. And so I think it creates a more 
difficult problem. Again, I would rather see the FBI's office 
working together with our State officials, State attorneys 
general to get at this problem, and I think that would bring a 
better result.
    Also, I know that some States are working very hard on 
this. I know that my colleague Ms. Titus from Nevada has put a 
lot of work on this, she has got some good experience on it. 
And I would say within this committee, within the Congress 
she's probably an expert on this. So I think a good use of my 
time would be to yield what time I have remaining, at least 
these 3 minutes, to Ms. Titus of Nevada.
    Ms. Titus. Well, thank you very much, Mr. Lynch. Thank you 
for those compliments and for yielding. And I thank the 
chairman for allowing me to sit in on this committee.
    As I've heard the testimony I have been pretty astounded 
that Mr. Campbell could come representing the FBI to talk about 
the problems of regulated Internet gaming and not be able to 
cite a single case in which has been the problem or give us any 
statistics that indicate it is a problem.
    And, Attorney General, how you can use the 10th Amendment 
argument to say that Federal regulation gives you more states' 
rights is kind of jabberwocky to me. And also I wonder, if 
you're so concerned about somebody in Nevada--I mean, in South 
Carolina--gambling on a site that's located in, regulated by, 
and limited to Nevada, what you're doing to protect those 
teenagers with a cell phone in South Carolina from gambling 
illegally and overseas.
    But I'd really like to have my time spent by Mr. Lipparelli 
sharing with us how our extensive background in regulation of 
gaming in bricks and mortar has helped us to develop regulation 
for online gaming and to answer some of the questions where 
people say, well, if you're in South Carolina you can gamble on 
a site that is located in Nevada, how when you cross the line 
to California those sites turn off, how we can regulate those 
sorts of things. Would you lay some of that out for the 
committee?
    And I would be glad to welcome any members of the committee 
to come to Nevada for a tour and a visit and see how this 
really does work. 
    Mr. Lipparelli. Thank you, Ms. Titus, for the question.
    All of the gaming regulation that has been passed 
throughout the United States essentially have four tiers. I 
think it is important to highlight those. It is the statutory 
framework, the regulatory framework, and most people understand 
those two tiers pretty well. What many people don't realize, 
that below those tiers are a series of technical standards. And 
then beyond the technical standards are the interpretations of 
those technical standards by staff.
    So to represent that someone can anonymously play on a 
regulated Internet site is completely inaccurate. You have 
full-blown registration requirements that mandate people turn 
over Social Security numbers, personal identification. And by 
the way, all of their activity, all of their wagers, all of 
their deposits, all of their withdrawals, all of their head-to-
head matches are all recorded within the system. So to suggest 
that regulated sites can operate in anonymity or without 
transparency I believe is completely inaccurate.
    So in the case of illegal operators, that's very possible, 
and that's been part of my testimony, is you have this 
dichotomy of the illegal people that probably are exploiting 
customers in South Carolina and I'm confident that they are 
exploiting customers in every State in the country.
    In the case of Nevada and New Jersey, and New Jersey's 
probably a better example because they've adopted all forms of 
gaming, those same stringent technical standards and rules 
interpretations apply. So the technical people that are 
assigned to approve these systems, this is a privileged 
industry and you don't just get your product approved because 
you submit it. The burden is always on the applicant to prove 
that their system meets the technical standards. So there is no 
free pass when it comes to deploying these systems.
    Ms. Titus. Thank you.
    Thank you, Mr. Chairman.
    Mr. Palmer. The chair recognizes the gentleman from North 
Carolina, Mr. Walker.
    Mr. Walker. Thank you, Mr. Chairman.
    I am conflicted to some sorts as far as gathering all the 
information today, being a big believer in the 10th Amendment 
and making sure that we continue to operate with the individual 
liberty that the States so guide us to do so, or the Founding 
Fathers guide us to do so.
    I am concerned about some statistics that I'm running 
across. In the past in doing some work, maybe some of our 
poorer communities, if you will, even some of the minority 
communities, I was alarmed to find out that nearly 40 percent 
of all online gamblers make less than $50,000. In fact, 14 
percent makes less than $25,000. Are you aware of those 
statistics, any of you gentleman, have you done--or you're just 
now hearing it? Okay.
    Fifty-four percent of all online gamblers are minorities, 
which obviously this should cause us some concern because many 
of these wonderful people live in some of these poorer 
communities.
    So I struggle with this, and I've got a couple questions I 
want to get to, but I do want to lay something out in my time 
that's allotted to Mr. Lipparelli. Several news sources have 
noted Senator Harry Reid's attempt to place a provision in the 
omnibus in the spending bill that would bail Caesars casino out 
of bankruptcy. Others have also reported on Caesars' need for 
more States to authorize Internet gambling so that Caesars can 
get more players on its New Jersey site.
    So my questions, so with the modified interpretation of the 
Wire Act, is this what we're talking about? I guess the bottom 
line question is, are we talking about helping bail out an 
unprofitable casino?
    Mr. Lipparelli. Thank you for the question, Mr. Walker.
    The interpretation of the Wire Act has been a question 
before 2011 and it remains a question now. That is one of the 
areas in all forms of gaming development where that question 
constantly is brought to the table. You have a situation now 
where you have old law that hasn't kept up with innovation. So 
the question of that I think is irrelevant to anything relating 
to any one company's ambitions, that that interpretation of the 
Wire Act is the same interpretation today as it was yesterday, 
as it was in 2009, as it was in 2001 when we passed our law.
    Mr. Walker. You may be correct. Time will tell. I can't 
imagine that Senator Reid would try to do that into the 
omnibus, but we'll see how that works out.
    Mr. Campbell, is there a Federal agency that has the 
resources and personnel necessary to place a patchwork of State 
Internet gambling regulatory regimes, protect States that do 
not do not permit Internet gambling, and permit the use of 
Internet casinos and lotteries for moneys that are laundered or 
other criminal activities? Any information that you could speak 
to that?
    Mr. Campbell. Well, again, I think it would harken back to 
statements earlier about the importance of the Federal 
agencies, including the FBI, working with State and local 
agencies to identify where this illegal activity is occurring 
and combining resources to do so. I think a couple of cases 
that demonstrate effectiveness in that area, the Legendz Sports 
case out of Oklahoma, which was a 10-year illegal gambling 
activity, over $1 billion, victimizing Americans involved in 
sports betting. And then also the Full Tilt Poker Sports case 
as well, where there was a seizure of over $500 million related 
to that as well. And of course there were international ties to 
those cases.
    So I think it's important that regardless of the landscape, 
where the threat occurs, and where illegal activity is 
occurring, by whatever individuals or organizations, it needs 
to be a combined effort by many agencies to target that threat.
    Mr. Walker. Okay. Let me follow up. In your earlier 
testimony, I believe you mentioned something about the FBI may 
have an investigation involving online gambling and terrorism. 
It piqued my interest. Would you mind unpacking a little bit 
more about that case to the committee, whatever you can share, 
and why the FBI may be looking into such matters?
    Mr. Campbell. Right. And we can provide you some more 
specifics on that in future.
    Mr. Campbell. But that was an investigation involving an 
individual that was providing monetary support, and one of the 
methods for that was money laundering through online gambling. 
And so in regard to that particular threat, as the FBI pursues 
investigations and we're targeting our top threats, which could 
be within terrorism or transnational organized crime, we look 
for whatever tools those bad guys essentially are utilizing 
that can help promote their criminal activity to hurt 
Americans. So it certainly is a priority for us.
    Mr. Walker. I'd like to have more time, but my time has 
expired. Thank you, Mr. Chairman, I yield back.
    Mr. Palmer. Thank you, Mr. Walker.
    The chair now recognizes Mr. Lieu from California for 5 
minutes.
    Mr. Lieu. Thank you, Mr. Chairman.
    Thank you, Mr. Wilson, Mr. Kleine, for your public service. 
Thank you for your testimony today. And I have no doubt you 
believe in your testimony, but I do need to point out that 
parts of your testimony were simply wrong when it comes to 
technology.
    Mr. Kleine, you had testified essentially that any 
smartphone can be used for online gambling. That's virtually 
impossible to pinpoint location.
    And, Mr. Wilson, you said essentially that any smartphone 
can you used as a virtual casino.
    The notion that you can't pinpoint location is simply 
incorrect. Just look at GPS next time on your smartphone, it 
will tell you where you are relatively accurately. And if you 
have lots of folks who are using these devices, they are going 
to be able to do it within their own State, but not outside the 
State in terms of online gambling.
    When you look at the programs that these States have put 
in, they are relatively effective. So we have a video that 
we're going to show from one such geolocation company, it is 
called GeoComply. We're going to show it. It's about a minute 
and a half.
    And as it's cuing up, I do want to know, the notion that 
you have ordinary South Carolina citizens who are somehow 
playing a Las Vegas online casino has no basis in reality or 
fact, and that's because they can't access that. Las Vegas and 
Nevada will block these things. So will New Jersey.
    So we're going to show this one for GeoComply, which New 
Jersey uses. And if we want to run the video, that would be 
great.
    [Video shown.]
    Mr. Lieu. Thank you.
    My colleague Mr. Mulvaney earlier today asked is there a 
less intrusive way to solve this problem. We just showed it to 
you. And there are ways to make sure that folks are not playing 
illegally.
    Now, is it possible that a very smart hacker could spend 
countless hours trying to hack into one of these systems? Sure, 
anything is possible. But then we have got much more to be 
worried about, about that hacker than if that person from South 
Carolina wants to play, for example, the Illinois State Lottery 
online.
    And then let me ask some questions for Mr. Lipparelli. In 
Nevada, for someone to actually play online, they've got to 
give their name, their address, their driver's license, their 
bank account, and a whole host of our information, correct?
    Mr. Lipparelli. That is correct, sir.
    Mr. Lieu. But if they walk in a brick-and-mortar casino 
they can walk in, put $5,000 on black on the roulette wheel, 
win, and then walk out without giving their name or address or 
driver's license, correct?
    Mr. Lipparelli. They can do that, but the marketing 
department at the casino would more likely track them down and 
try to get that information from them.
    Mr. Lieu. Right. So let's say they win a thousand. Now, 
based on what you said earlier, it seems like with online 
regulated gambling you have far more information on who it is, 
what their bank account is. So they, in fact, were not 
anonymous. In the same way we don't say online banking is 
anonymous, we don't say online stock trading is anonymous.
    This is not anonymous, this is almost the exact opposite. 
You have so much information about these people who are online 
gambling that this is exactly what law enforcement wants. And I 
do want to suggest that what some of the witnesses are arguing 
today are essentially that South Carolina should decide what 
the over 49 States should do, that is wrong, that violates the 
10th Amendment.
    And with that, I yield back.
    Mr. Palmer. The chair now recognizes the gentleman from 
Wisconsin, Mr. Grothman.
    Mr. Grothman. Sure. First for Mr. Campbell, just 
hypothetically. Do you think States should have the right to 
set the gambling policy within their own borders?
    Mr. Campbell. I really can't speak to that. Again, we 
simply pursue our investigations based on existing Federal 
statutes. I would defer to our partners from the States in 
regard to that answer.
    Mr. Grothman. Okay. Well, I'll ask you all. This is for any 
one of the four of you to step forward.
    I think the problem we address is a lot of States want to 
limit gaming, and they want to limit gaming kind of for the 
reasons that Congressman Walker said. They feel that it's 
something that takes advantage of the poor, people who for 
whatever reason have a weakness, and results in messing up 
their lives financially.
    Now, the last question pointed out there's all sorts of 
information being gathered. Do any of you have anything that 
you would like to add to my last comment? I mean, in your 
positions do you see people mucking up their lives because of 
Internet gaming? Do you have any anecdotal evidence or real 
evidence you can tell me about? Any one of you four. Who is 
ever the most aggressive can go first.
    Mr. Wilson. I don't know if I'm the most aggressive, but we 
have seen anecdotal evidence in South Carolina through a lot of 
the sweepstakes situations we've had. We obviously had video 
poker back in the '90s. Anecdotal evidence, children were left 
in cars who died because the mother was in there gambling for 
hours at a time.
    I would like, if I may real quick, and I respect Mr. Lieu 
who give his little video presentation, I'm not here today and 
I confess I'm not prepared to litigate or debate whether or not 
what he put in that video is provable and defensible. But what 
I can say is, is that it is not a violation of the 10th 
Amendment when Congress has the authority to regulate online 
gambling under the Commerce Clause.
    For 50 years the Wire Act, Wire Act enforcement and 
precedent has kept gambling out of the air and on the ground 
where States could better regulate it, whether they prohibit it 
or regulate it or support it. When the prohibition was removed 
unilateral by a lawyer at the Justice Department they put it up 
in the air as well on the ground where States can't regulate it 
as easily.
    Removal of the online gambling provision of the Wire Act 
has eroded the States' ability to prohibit or regulate however 
they want the gambling in their States. And so my comment to 
that is, if we don't past RAWA and no one here codifies what 
was in that legal memorandum, then that legal memo amended 
Federal law, they legislated from the Justice Department, and 
that is only something that this Congress can do.
    Mr. Grothman. As a practical matter--well, first of all, do 
any other folks have anything to say on my question? No, okay.
    So I'll give you this question. As a practical matter, as 
this is left hanging out there, do you believe this is 
resulting in a significant increase in gaming in States whose 
public policy is probably to discourage that gaming?
    Mr. Lipparelli. Well, sir, I can take a stab at that. The 
legalization of online gaming in Delaware, Nevada, and New 
Jersey, there's lots of debate about whether those are 
overlapping players or not. I would tell you that the growth in 
online gaming on illegal sites occurred without respect to any 
policy position taken by any government official. It grew out 
of just the natural evolution of technology being exposed to 
patrons.
    So do I believe more people moved to mobile forms of 
gambling that were made available by illegal operators? I 
absolutely believe they did. That's why in our State and many 
of the people in our industry want to see that become what we 
traditionally support, which is forms of regulated industry 
that are subject to fair forms of taxation and oversight.
    Mr. Grothman. Okay. I'll ask Mr. Kleine one final question.
    You're here today, and I assume you're here today because 
you have an interest in this topic. Anecdotally, in your State, 
has this loophole or new rule or whatever you want to call it, 
do you believe it has resulted in more gaming in Nebraska that 
wouldn't have happened otherwise?
    Mr. Kleine. Yes. Anecdotally, I will say that certainly we 
have seen people who have problems with gambling generally, to 
your question earlier. But is there a greater propensity if 
people have access? Sure there is.
    And to your point, to the Congressman's point about 
geolocation, that's with regard to regulated areas. We're still 
not talking about the illegal gambling sites that may be in 
another country or whatever that people have Internet access to 
it. And my understanding is this would give the FBI or the 
Justice Department the ability to go after those folks. We're 
still talking about the enforcement perspective about people 
who are doing illegal operations, and that's what we're looking 
to, is how do we enforce the law. And we need a law to be there 
to be able to be enforced. Do you see what I'm saying?
    Mr. Grothman. Right. And apparently Nevada has the opinion 
that, you know, the more the better, as long as it's regulated. 
But in Nebraska, you as a State, you gambling is something that 
takes advantage of people's weaknesses, and you are familiar 
with examples of people's lives who have been----
    Mr. Kleine. Sure. We don't have casino gambling in 
Nebraska. There is casino gambling in Iowa, which is right 
across the Missouri River from Omaha. We have a multitude of 
cases, criminal cases that come out because of the issues that 
are caused when people go over and blow all their money in the 
casinos in Iowa.
    Mr. Grothman. It is Iowa, what can you expect?
    Mr. Kleine. Right.
    Mr. Grothman. Okay, thanks.
    Mr. Kleine. Sure.
    Mr. Palmer. The gentleman's time has expired.
    The chair now recognizes the gentlelady from the Virgin 
Islands, Ms. Plaskett.
    Ms. Plaskett. Thank you, Mr. Chairman.
    Thank you, Ranking Member.
    And thank you gentlemen for testifying on this very 
important issue and attempting to give us some insight and 
clarification as to your interpretation of the import of online 
gambling and where in fact the line is clearly drawn.
    So I have an interest in this because in 2001 the United 
States Virgin Islands passed the Internet Gaming and Internet 
Gambling Act, and over the past decade the Government of the 
Virgin Islands has really been handcuffed by incorrect 
interpretations, they believe, of the Wire Act. And I believe 
that if the act was allowed to be implemented and regulated 
properly, much needed revenue might be brought to many 
different States that have this law in its place.
    So I was really interested in a much more historical look 
back on how this came about. I've worked at the Department of 
Justice, worked in the Deputy Attorney General's Office, and 
understand how long it takes for an opinion to come out of 
Legal Counsel, the department of Legal Counsel. So the idea 
that that was drafted and written and signed in middle of the 
night to me is somewhat a difficult stretch of my imagination 
knowing the inner workings of the Justice Department and how 
long it takes for an opinion to come out.
    So I wanted to look at the interaction between the Justice 
Department and Congress over the many years in which before 
that opinion was drafted.
    So, Mr. Kleine, I understand that in 2002 there was a case 
called in re: MasterCard in which the fifth circuit appellate 
court ruled that the Wire Act applied only to online sporting 
betting. Is that correct?
    Mr. Kleine. That's my understanding.
    Ms. Plaskett. Okay, that's your understanding. And that the 
fifth court made that decision, that would have been 9 years 
before the Department of Justice's legal opinion, correct?
    Mr. Kleine. That's also my----
    Ms. Plaskett. Okay. And since then, during that time, 2009, 
even before that Congress has weighed in pretty consistently on 
this issue, up until now, that there seems to be some question 
about it.
    So, Mr. Wilson, were you aware that between 1996 and 2006 
Congress passed a series of bills to update the Wire Act and 
made it clear that the act should not apply to online casino 
operators duly licensed by a State to offer casino games to 
people located in those States?
    Mr. Wilson. Into which, I'm sorry, which States?
    Ms. Plaskett. To any State. This was an act passed by 
Congress.
    Mr. Wilson. No, I'm not.
    Ms. Plaskett. Okay. Are you aware that Representative 
Goodlatte in the 106th, 107th, 108th, 109th Congress offered 
legislation on this matter, Senator Jon Kyl, Representative 
Leach as well?
    Mr. Wilson. No.
    Ms. Plaskett. Okay. And that even though none of these laws 
was enacted, the passage of those bills in both congressional 
houses gave clear evidence, I would think, that there is 
congressional intent on this matter.
    So in 2006 Congress enacted the only law that deals 
directly with Internet gaming. Are all of the witnesses, are 
you familiar with the Unlawful Internet Gambling Enforcement 
Act, otherwise known as UIGEA? Are you all aware of that? I 
take that as a yes?
    Mr. Wilson. Yes.
    Ms. Plaskett. Okay. I don't want to go into lawyer mode. 
Okay. Thank you. So I'd ask that the record reflect that all of 
the witness said that they're aware of that.
    And I have a slide that I'd like to show.
    [Slide.]
    Ms. Plaskett. Here is what UIGEA said, that the term 
unlawful Internet gambling does not include placing, receiving, 
or otherwise transmitting a bet or wager where a bet or wager 
is initiated or received or otherwise made exclusively within a 
single State.
    And then it goes on to say the bet or wager and the method 
by which the bet or wager is initiated and received or 
otherwise made is expressly authorized by and placed in 
accordance with the laws of such State.
    And finally, and the law--State law or regulations include 
age and location verification requirements reasonably designed 
to block access to minors and persons located out of such 
State, and appropriate data security standards to prevent 
unauthorized access by any person whose age and current 
location has not been verified in accordance with such State 
laws or regulations.
    Mr. Lipparelli, is that the correct pronunciation of your 
name, sir?
    Mr. Lipparelli. Yes, it is.
    Ms. Plaskett. Okay. I'm pretty sensitive to that myself. Is 
it clear to you from the reading of this law that Congress 
never intended to ban States from authorizing and regulating 
online gambling within their own borders?
    Mr. Lipparelli. The language debated in and around UIGEA 
was intense, and I believe you're correct that that was the 
intent.
    Ms. Plaskett. The final intent and what the language of the 
law itself says.
    Mr. Lipparelli. Yes.
    Ms. Plaskett. And so, Mr. Lipparelli, did the State of 
Nevada consider this language in drafting its regulations?
    Mr. Lipparelli. It did. And I would remind the committee 
that we actually passed our State law back in 2001, so the 
adoption of UIGEA actually was part of what informed our 
regulatory structure. The regulations are controlled by our 
Nevada Gaming Commission. So clearly they, at the advice of our 
attorney general, considered the elements within UIGEA when we 
adopted our regulations.
    Ms. Plaskett. So this legislation, which was passed, 
incidentally, in a Republican-controlled Congress and signed 
into law by President Bush, that the Department--it was--were 
you aware this was--this precise language of UIGEA is what the 
Department of Justice Office of Legal Counsel utilized in 
determining that it was needed to update DOJ's position to 
conform with Congress and with the courts?
    Mr. Lipparelli. I believe that's correct.
    Ms. Plaskett. Okay. I think that I have in fact run out of 
time, but I will ask that the record remain open that I could 
put the rest of my testimony into the record.
    Mr. Palmer. Without objection.
    Ms. Plaskett. Thank you.
    Mr. Palmer. The chair recognizes the gentleman from 
Colorado, Mr. Buck.
    Mr. Buck. Thank you, Mr. Chairman.
    Mr. Campbell, are there other statutes that the Federal 
Government could use to prosecute the unregulated illegal 
online gambling?
    Mr. Campbell. Yes, that is correct. We use the Illegal 
Gambling Business Act, the Travel Act, various money laundering 
statutes, bank fraud, mail fraud, wire fraud, among others, in 
order to target that type of threat, and of course 
organizations and individuals involved in that activity.
    Mr. Buck. And what's the purpose of the Wire Act being used 
in this way then?
    Mr. Campbell. I can only refer to the opinion itself and 
the Department's interpretation of the statute.
    Mr. Buck. Is there evidence of any regulated entities using 
the gambling opportunities for money laundering?
    Mr. Campbell. I'm sorry, the regulated----
    Mr. Buck. The online gambling.
    Mr. Campbell. Well, there is evidence of criminals 
utilizing those forums potentially for money laundering 
activity.
    Mr. Buck. Have you prosecuted any cases? Has the Department 
of Justice brought any cases based on that theory?
    Mr. Campbell. I would have to refer to them and maybe 
provide some other information related to that.
    Mr. Campbell. I'm not--as I sit here, I can't define 
specific cases involving the money laundering aspect.
    Mr. Buck. And are there cases that criminals have used 
brick-and-mortar casinos to launder money?
    Mr. Campbell. Again, I'd have to refer back to provide you 
some information regarding that.
    Mr. Buck. Well, I can answer that one for you. I prosecuted 
some of those. So it has happened at brick-and-mortar casinos. 
Why would you need this statute then? Why couldn't you use 
other statutes to prosecute these cases if you can in other--in 
the brick-and-mortar situation?
    Mr. Campbell. Well, certainly we are utilizing these 
various statutes, that's correct, in regard to any criminal 
activity, illegal activity relating to gaming. That is correct.
    Mr. Buck. Mr. Wilson, do you worry that if the Federal 
Government goes down this path that the Federal Government 
could also go down the path of legalizing gambling in all 
States?
    Mr. Wilson. I mean, I suppose I haven't put much thought 
into them legalizing gambling. That's always been the policy of 
them, to leave that solely within the purview of the States. 
That's always been the policy of the Congress, is give great 
deference to the States in how to regulate gambling. I don't 
see that changing, but----
    Mr. Buck. Well, you're seeing it change now. I mean, we're 
having a hearing based on----
    Mr. Wilson. I'm seeing an erosion, yes, sir.
    Mr. Buck. Okay. I yield back my time, Mr. Chairman.
    Chairman Chaffetz. Will the gentleman yield?
    Mr. Buck. Yes.
    Chairman Chaffetz. Just to answer the question, I would 
like to ask unanimous consent to enter into the record a 
Washington Post article. It is a little bit older, but it says: 
``Three worked the Web to help terrorists.'' One line from the 
sentence: ``Authorities also say the men laundered money from 
stolen credit card accounts through more than a dozen online 
gaming sites.''
    I ask unanimous consent to enter that into the record.
    Mr. Palmer. So ordered.
    Mr. Palmer. The chair now recognizes the gentlelady from 
New York, Mrs. Maloney.
    Mrs. Maloney. I thank the chair for calling the committee 
and for all of the panelists on this important issue for being 
here today and testifying.
    I would really like to focus on the law enforcement aspect 
of this. And the National Fraternal Order of Police submitted a 
letter to the committee expressing their law enforcement 
perspective on regulating online gambling. And I would like 
unanimous consent to place their letter in the record.
    Mrs. Maloney. And I'd like to quote from the letter. It 
says, quote: ``It is imperative that States be able to reserve 
the right to create a strong regulatory framework to allow law 
enforcement to successfully protect consumers and to drive 
illegal operators out of the marketplace.''
    So, Mr. Lipparelli, as you have experience in this area, 
would you agree that a strong regulatory framework for online 
gambling would support law enforcement efforts, consumer 
protections, and drive illegal operators out of the business 
and the marketplace?
    Mr. Lipparelli. Clearly, I believe that should be the 
priority of both State and Federal law enforcement. This was an 
issue prior to our State's legalization and regulation of 
online gaming, and it only became more apparent once there were 
economic interests quote/unquote, in the game, where they, 
themselves, were able to analyze the impact of those operating 
illegally without paying taxes and registering customers 
without any form of serious confirmation. So, clearly, the 
answer to that is yes.
    Mrs. Maloney. Okay. Mr. Campbell, I'm guessing or assuming 
that a strong regulatory framework aids the FBI's efforts if 
investigating a player or transaction related to a regulated 
online gambling operation or platform.
    Mr. Campbell. Well, certainly both statutory law and 
regulation can have an effect in regard to ensuring operators 
continue their operations within the law. That is true.
    Mrs. Maloney. And, Mr. Lipparelli, some States have 
concerns about the difficulty and cost of regulating online 
gambling within their State borders. Can you please share some 
insight from your experience in Nevada drafting the State 
regulations for oversight?
    Mr. Lipparelli. I can certainly speak to our experience in 
Nevada. I was chairman at the time we adopted these 
regulations. And at that moment in time we added no new 
resources in terms of human capital to our agency. We did it 
within the confines of our existing staffing levels.
    It's an important question. There was, I believe, some 
cyber resources added in our just-passed legislative session. I 
think the better question with regard to that relates to 
empowering law enforcement potentially in other ways to 
potentially go after the illegal operators. There are State 
laws on the books today that clearly delineate those as illegal 
activities, so there are tools in place already. But if there 
is a desire to enhance that capability, you won't get any 
disagreement from me.
    Mrs. Maloney. Okay. And how were you able to design a 
regulatory structure that was easy to implement the various 
oversight and enforcement aspects and manage the costs?
    Mr. Lipparelli. I don't want to represent in any way that 
it was easy. I would concur. I woud also suggest that my 
colleagues in New Jersey at the time would probably also not 
call it easy. Any regulation of any new technology presents 
questions, concerns by the incumbent players. But this has been 
the hallmark of gaming regulation since the late '70s. In the 
1950s that foundation was laid. But beginning in the 1970s and 
after, when technology really started to affect our business, 
each and every time we've taken evolutionary steps--for 
example, slot machines used to be mechanical devices, then they 
became proprietary software written only by the people who 
supplied that. Today most of it is PC technology. That's an 
example of the evolution of the technology.
    Each one of those presents risks and uncertainties. But in 
each case I think the gaming regulators rose to the occasion, 
created the right technical standards. And often we overcorrect 
and then back off.
    So I wouldn't characterize any of the work that my 
colleagues have done over the years as easy, but they have 
great experience in doing it.
    Mrs. Maloney. Well, do you think that Nevada's experience 
and Nevada's regulatory standards could be used as an example 
for other States?
    Mr. Lipparelli. Well, clearly, I made those comments in my 
prepared remarks. If compliance is the goal--and if you talk to 
any regulator, that's always their desire, right, we want our 
regulated people to comply with the rules and the regulations--
any time you diverge, having wildly different standards from 
State to State, that creates potential conflicts and issues.
    So to the degree that regulators cooperate, which they 
often do, the industry, the players, the State, everyone 
benefits from that. Wildly different standards can create 
issues. But generally speaking, many States, Nevada, New 
Jersey, Pennsylvania, Mississippi, have all been very 
cooperative, and the independent test labs also contribute to 
that base of knowledge that says, what's the most efficient way 
to regulate, what can create the outcome?
    And we're constantly at that effort. It never goes away. 
Every time a new piece of technology comes along, it presents 
new challenges. And I think the industry, to its credit, 
deserves praise for the fact that you don't see widespread 
scandal in our industry. I think that's something to be proud 
of.
    Mrs. Maloney. I would agree with you.
    My time has expired. Thank you very much.
    Mr. Palmer. I now recognize myself for 5 minutes.
    One of my concerns is the harm that Internet gambling will 
cause, particularly for adolescents. There's numerous studies 
that indicate there's much higher rates of harm for 
adolescents. There's a much higher prevalence of disorders 
among adolescents as a result of gambling. Adolescent gambling 
is linked to deviant behavior. A few years ago, the National 
Academy of Pediatrics published a research paper and said that 
there's a pandemic of gambling addiction, not an epidemic, but 
a pandemic of gambling addiction among adolescents. And you 
talk about being able to control access across State lines.
    One of the things that I would like to explore here is what 
is the legal liability that parents might have for their 
children if they've gotten addicted to gambling or if they've 
spent enormous amounts of money gambling?
    Mr. Wilson.
    Mr. Wilson. I would argue that would be fact specific. I 
mean, we have laws in South Carolina, contributing to the 
delinquency of a minor, and obviously that would be fact 
specific as to what the parent was doing in relation to the 
child and were they putting them in that position, were they 
encouraging it. It's very fact specific. But, yes, it could 
actually exist in South Carolina where there could be some 
criminal liability on part of the parent.
    Mr. Palmer. How about civil liability?
    Mr. Wilson. I would argue--I'm not a civil attorney, but, 
yes, I think you could have civil liability.
    Mr. Palmer. And there's examples of this already. The FTC 
won a $325 million settlement from Apple because the company 
billed consumers for millions of dollars in charges incurred by 
their children who were using mobile apps without their 
parents' consent. And one of my concerns is there's nothing to 
prevent a nonparent, even a nonfamily member, to give a minor 
access, you know, log on to an Internet casino on the phone, 
give them the phone, or for them to get access to an adult's 
logon information.
    And, you know, when you're talking about South Carolina 
didn't want it in South Carolina but North Carolina did, is it 
the State's responsibility, North Carolina, to control that? 
Again, is that going to be something that just has to be 
litigated in civil cases or is there a criminal issue here?
    Mr. Wilson.
    Mr. Wilson. I'm trying to understand the question, Mr. 
Chairman.
    Mr. Palmer. What are the limits? You know, how does one 
State protect itself from another State that has introduced 
something that is clearly hazardous to people?
    Mr. Wilson. It is very difficult, and it is undefinable. I 
don't think, if I had the balance of your time, I would eat 
that up and a lot more. I don't know how I could define that. 
But it would be extremely difficult to guard against that 
between interstate laws and policies.
    Mr. Palmer. Let me ask you this, then, General Campbell. 
Should online gambling proliferate in the U.S., as it is 
expected to as a result of the OLC opinion, do you believe the 
burden of enforcing the newly established laws--and this is Mr. 
Campbell, I'm sorry--and regulations in multiple States will be 
a drain on your current resources?
    Mr. Campbell. We're still targeting the most significant 
threats. So, regardless, we're going to commit the resources 
that we have available against those top threats and where 
appropriate, partner with our--with other State authorities.
    Mr. Palmer. Do you--or you, General Wilson--believe that 
the Department of Justice took into consideration the right of 
American families to keep online casinos out of their homes and 
off their children's cell phones and tablets and laptops?
    Mr. Wilson. I do not believe they did. No, sir.
    Mr. Palmer. Would you like to comment on that, Mr. 
Campbell?
    Mr. Campbell. Again, I would simply refer to the opinion 
itself and what's available there as far as the processes that 
went into the development of the opinion.
    Mr. Palmer. Should the government be in the business of 
facilitating such an activity?
    I have been involved in this from a think tank perspective 
for years and studying this and looking at what happened in 
South Carolina when you had the proliferation of electronic 
gambling, video gambling. There were more places to gamble in 
South Carolina than there were in Nevada. It got to the point 
that the manufacturing association, the South Carolina Chamber 
of Commerce joined with religious groups to get it out of their 
State. It got to the point that it was hurting economic 
development because companies didn't want to come in.
    And that's one of my concerns about this, is proliferation 
of this and how it's going to impact not only families, but the 
ability to do business, the workplace environment. Those are 
some serious concerns that I think need to be taken into 
consideration as we go forward here.
    My time has expired. Would you like to respond, General 
Wilson?
    Mr. Wilson. Mr. Chairman, I didn't have the opportunity 
earlier. Representative Plaskett was mentioning UIGEA, and I 
did not want--she ran out of time and another Member started 
talking, and I was respectful of the balance of their time.
    I want to just put on the record that she was mentioning 
UIGEA may conflict with the Wire Act in allowing interstate 
gambling. I wanted to just go ahead and put on the record that 
the provision that she was referring to in UIGEA is intrastate. 
It's a technical amendment put in UIGEA that would allow retail 
lottery terminals or gambling terminals to communicate with a 
processing center somewhere within the same State. It wasn't an 
interstate gambling provision, it was intrastate. So it doesn't 
conflict with the Wire Act. That was all.
    Mr. Palmer. Thank you, General Wilson.
    The chair now recognizes the gentleman from Missouri, Mr. 
Clay.
    Mr. Clay. Thank you, Mr. Chair. And, Mr. Chair, I'd like to 
ask unanimous consent to enter 31 letters for the record 
supporting States' rights to regulate online gambling.
    Chairman Chaffetz. [presiding.] Without objection, so 
ordered.
    Mr. Clay. Thank you, Mr. Chair.
    Mr. Chair, along the same lines of questioning as Mr. 
Palmer, and this is a panel-wide question, starting with Mr. 
Campbell, is there a foolproof method developed by the States 
or anyone else to prevent minors from online gambling? Is there 
an app? Is there a method that has been proven by a State or 
the Federal Government that can detect the age of the 
participant at the online gambling site?
    And I'll start with you, Mr. Campbell.
    Mr. Campbell. At this time, I'm not aware of any particular 
technology that can specifically do that.
    Mr. Clay. Okay.
    Mr. Wilson.
    Mr. Wilson. No, sir, I'm unaware of any technology. And I 
could probably bring an expert in here to contradict others.
    Mr. Clay. Sure.
    Mr. Kleine, are you aware of anything?
    Mr. Kleine. I'm not aware of any.
    Mr. Clay. Mr. Lipparelli.
    Mr. Lipparelli. I have an affliction, having been in the 
industry for 20 years. The goal of gaming regulation is always 
to set the bar appropriately high. I don't think there's--I 
haven't met that coder yet that can write perfect software. I 
wish I could. It would have solved a lot of headaches for me in 
the past.
    But generally speaking, operators with respect to regulated 
online space have set the bar unusually high. If the ambition 
of a gambler is to access a site and they're going to go 
through the panoply of requirements of a legal regulated site, 
they'll probably get to the second or third entry point in the 
site and move on back to their illegal site.
    So the quick answer to your question is there are outlets 
for those kinds of people to play today. Those are the illegal 
operators. The legal operators put in a panoply of 
requirements, and there's no guarantee that a minor could ever 
access a site, but generally speaking, the standards are quite 
high.
    Mr. Clay. Now, you and I have heard the horror story of a 
minor getting ahold to maybe a parent's credit card and running 
up thousands of dollars' worth of debt on these sites. And it's 
too late by the time the parent finds out about it. So, I mean, 
that happens, that actually happens. And it gives me pause and 
makes me wonder, do the States have a handle on the regulation 
of this type of online gaming?
    Mr. Lipparelli. Well, this is where I go into my--usually 
my commentary about that risk exists in all consumer businesses 
to the extent you're transacting, and gaming is really no 
different. The only argument I would make is that in the case 
of gaming, typically the standards that we require are 
significantly greater than what you would see in any consumer 
transaction out there. You can buy all kinds of things online 
and it doesn't require any of the kinds of protections that our 
industry have put in place.
    Mr. Clay. Sure. But it's easy for you to detect a person's 
age in a brick-and-mortar facility, which is how gambling 
originally got started in this country.
    Mr. Lipparelli. And there are prosecutions each and every 
year in the various States that allow brick and mortar for 
minors violating that law.
    Mr. Clay. For sure. But I'd just be curious as to how many 
prosecutions occur in the online aspect of gambling.
    Mr. Lipparelli. I know that the colleagues that I have 
talked to have told me that, and it was my concern when we 
adopted our regulations, in the conversations I've had with 
them as recently within the last 30 days, they do not cite that 
as an issue that's causing them distress. They have not been 
warned. They have not been told of horror stories of that kind 
of thing happening. So I can only go by what their personal 
experiences are that they relayed to me.
    Mr. Clay. Okay. Any other panelists have any anecdotal 
evidence of----
    Mr. Wilson. This is very anecdotal, Representative. My 7-
year-old is fond of hacking my iTunes account and downloading 
video games. I don't know what would stop him if he had a 
penchant for gambling on my iPhone if I had an app on there. So 
that's more anecdotal than anything.
    Mr. Clay. And probably with these new fantasy football 
leagues and all of that, I'm sure that young people getting 
excited about participating in that forum too.
    Let me--yeah. Yeah. I'll yield back, Mr. Chairman.
    Chairman Chaffetz. I thank the gentleman.
    It is the intention of the chair to recognize Mr. Carter 
and then represent myself and then we'll adjourn. Members are 
advised that there is less than 13 minutes in an extensively 
long vote series. And we'll go that direction.
    Mr. Carter, you're now recognized for 5 minutes.
    Mr. Carter. Thank you, Mr. Chairman.
    And thank you for being here. This a great panel. Certainly 
an important subject. Certainly all of us are interested in it.
    Mr. Campbell, let me start with you. Can you just briefly 
describe a casino-grade geolocation system to me?
    Mr. Campbell. No, I do not have information about that. I 
cannot provide information on that.
    Mr. Carter. On the casino-grade geolocation system?
    Mr. Campbell. No, I am not familiar with that system.
    Mr. Carter. Okay. Okay. Well, let me ask you, are you aware 
that the Georgia Lottery Corporation conducts third-party 
penetration testing of their geolocation and age-verification 
solutions? And this is very important to me. I know it's 
somewhat specific to my State, but the Georgia Lottery has been 
very successful, and by statute all of those proceeds from that 
go to education. So we're looking at potentially losing $10 
million in revenue directly to education. So that's why it's of 
concern to me.
    Mr. Campbell. Certainly. No, I am not familiar with the 
Georgia Lottery or its processes.
    Mr. Carter. Okay.
    Senator, let me ask you. If we were able to control--if we 
were able to control where online lottery sales can be done and 
the age of the person who purchases those tickets online, if 
we're able to control that, then how is it the Federal 
Government's problem? Why should the Federal Government be 
getting involved in it?
    Mr. Lipparelli. I'm not sure I'm totally tracking the 
question. But the States that establish their statutes, 
regulations, and technical standards, I have found over 20 
years of experience, those local requirements, those local 
technical standards usually address the resident issues that 
crop up with those regulatory agencies. So in the case of an 
online lottery business, there will be particular requirements 
that may not be what you see in a traditional casino 
environment. So if there are specific elements related to 
lottery, I'm sure the lottery players in that game will 
contribute to very detailed debates on what should and 
shouldn't be included.
    In the case of lotteries specifically, it's no different 
than what we saw with our online accounts. The one difference 
that they may decide to adopt is some of the registration 
requirements that we required in our State. That may not be the 
case, but that is one example that could bring greater 
transparency. But those tools are available, and they're get 
better and better each day.
    Mr. Carter. So the tools to be able to identify where the 
ticket is bought, where it's originating from, and the age, the 
verification of the age of the person who's purchasing it?
    Mr. Lipparelli. I don't see the difference between any 
purchase transaction and any gaming transaction. It all comes 
in the form of complete tracking. So that I think those are 
very similar.
    As it relates to age verification, those will be continued 
challenges. There's more and more technology coming onboard. 
But you probably shouldn't be able to register in the first 
place for an online transaction unless you've provided your 
identifiers, your personal account information, your access to 
whatever card you're using to transact.
    Again, building that wall as high as you can so that to the 
extent that a parent is going to then turn over that account 
information is no different than a parent being irresponsible 
in any other consumer transaction.
    Mr. Carter. Okay. Well, gentlemen, my concern is this, 
okay? I don't want to lose $10 million in revenue to education. 
I mean, it's very, very important to us in the State of 
Georgia. It's worked well. And we feel like we're able to 
control where that ticket originates from, where that purchase 
originates from. We feel like we're able to control--to verify 
the age of the purchaser.
    So why come to Washington, D.C. and for me to say, ``No, 
I'm not going to allow you to do it,'' if we're able to control 
that?
    Mr. Kleine.
    Mr. Kleine. What you're talking about is intrastate, I 
think. And what we're talking, I think, for the most part is 
interstate issues with regard to gambling.
    Mr. Carter. Well, let me get clarification then. Do you 
have any problem with intrastate?
    Mr. Kleine. I don't have a problem if Georgia has a lottery 
and they run it intrastate and they regulate it intrastate. 
Nebraska has a lottery also that we have intrastate and we get 
the money and it goes to education. But I don't think--that's 
not what I guess I'm talking about here.
    Mr. Carter. Okay. Okay. I just want to make.
    Mr. Wilson.
    Mr. Wilson. We have a lottery too, Representative, and I 
absolutely have no problem with that. This is absolutely within 
the borders of each individual State. We're talking about cross 
State borders online gambling.
    Mr. Carter. Fair enough. I just want to make sure because, 
quite honestly, I have concerns about that as well. But, again, 
for the third time, I just don't want to interrupt something 
that is working so well in our State and that we feel like we 
have under control. So I just want to get clarification on 
that, okay?
    Mr. Chairman, that's all I had, and I'll yield back. Thank 
you.
    Chairman Chaffetz. Well, I thank the gentleman, and now 
recognize myself for 5 minutes.
    And the reason we're here is because the Office of Legal 
Counsel issued an opinion reinterpreting what had been in the 
books for more than 50 years. That's one of the issues that 
we're here for.
    There are some that believe--and the other point I'd make 
is there are an untold number of gambling sites offshore. If 
you really want to gamble right now you can go online and do 
it. It's against the law. But what the administration is 
talking about, what's showing up in this OLC opinion, which is 
one person's opinion, gives some to think that they have legal 
rights and reasons to bypass the States at the Federal level 
and be able to offer their gambling sites in States across the 
country.
    Now, that poses a problem for a lot of States, States that 
have legalized gambling, States like myself who have no gaming 
and don't want to have any gaming. And I think it's naive at 
best to think that you can put a wall on the Internet and just 
say: Hey, this is just--you know, we're not going to be able to 
penetrate this. You can't.
    With gaming there are lots of issues other than just 
location. Location is a big one. It's a core part of it. But it 
also has to do with your age. It has to do with your 
intoxication. It has to do with a whole host of things that can 
be addressed with somebody in person at a physical facility.
    And if an individual wants to--if an individual State wants 
to move this direction, then look at the Federal law. But I 
think we would both agree, certainly with the gentleman from 
Georgia, that you don't just unilaterally change the law with 
one OLC opinion. And the concern that's being expressed here 
from a variety of different States is that this is a problem.
    There's a reason why the second highest, as best I can 
tell, revenue to the Department of Treasury through the 
Department of Justice on fees and fines is because of gaming 
issues. Now, a lot of that has to come with PokerStars and some 
of those settlements that skewed the numbers exceptionally 
high. But it is a problem. And we've had numerous attorneys 
general, numerous governors saying: You can't do that to our 
State.
    If somebody wants to come in and pass a piece of 
legislation and change the way we're going to do this, than 
introduce a bill and pass it. But what we're seeing now is the 
proliferation that is going to cause untold problems.
    Mr. Lipparelli, I want to make sure that I'm just crystal 
clear. You're very nice, very competent. You represent your own 
personal views. You're not here representing the Nevada Senate, 
correct?
    Mr. Lipparelli. That is correct. That's why I made that 
statement----
    Chairman Chaffetz. You're not here----
    Mr. Lipparelli. --at the beginning of my testimony.
    Chairman Chaffetz. You're not here representing the gaming 
board in Nevada?
    Mr. Lipparelli. That is correct.
    Chairman Chaffetz. And it's very interesting to me, at 
least with the piece of legislation that I sponsored, the wide 
array of support on both sides of the aisle. On the one hand, 
in the Senate you've had support from Dianne Feinstein and Mike 
Lee, from Senator Graham to Kelly Ayotte to--I mean, you've got 
a whole host of people. Myself and Tulsi Gabbard in the House. 
You've got people from really the full political spectrum here 
that are saying: This is a problem, we do need a bit of a 
timeout.
    But, Mr. Lipparelli, let me go back to your--I'm not sure 
I'm following your logic here. You are arguing, you have said, 
quote ``We can all agree that a world with 50 State-specific 
standards would be a nightmare,'' correct?
    Mr. Lipparelli. I made that reference with respect to the 
technical standards.
    Chairman Chaffetz. So do you want a national gaming board? 
Is that what you're asking for?
    Mr. Lipparelli. No. It comes down to the possible versus 
the desired state. The desired state----
    Chairman Chaffetz. So are you advocating that you should be 
able to do gaming--that the residents of Nevada should be able 
to gamble on the Georgia State Lottery?
    Mr. Lipparelli. No, I'm not at all.
    Chairman Chaffetz. Why not?
    Mr. Lipparelli. That's controlled by Georgia law and Nevada 
law.
    Chairman Chaffetz. But why wouldn't the resident of Las 
Vegas be able to gamble on the Georgia Lottery site? Why 
wouldn't you advocate for that?
    Mr. Lipparelli. Well, the State law applies if--to your--I 
would agree with you. If there is a national acceptance or if 
thereis a willingness. And we've actually been in these 
chambers before looking at the prospect of interstate online 
gaming. There were a lot of potential arguments for why that 
didn't pass and, you know, what were some of the impediments 
that got that going.
    But today in Nevada they define their gaming law, Georgia 
would define whatever forms of entertainment or gaming they 
want to define, and it doesn't necessarily hold that as a 
result of that we should just have a national policy that says 
everybody can gamble on each other's various State law's back.
    Chairman Chaffetz. So you're okay with online gaming as 
long as it's on an online gaming site within your State under 
your regulations?
    Mr. Lipparelli. Right. Or if there's a willingness among 
various States to cooperate and enter into common contests. I 
wouldn't object to that if those States desired to do so.
    Chairman Chaffetz. So if you teamed up, you know, because 
the majority, right, 47 of the States they don't have this, 
they're not participating in it, you're okay with compacts that 
would then regulate this.
    Mr. Lipparelli. I am.
    Chairman Chaffetz. And then you could essentially create 
national gambling. You think that that's an avenue to go. And 
who would regulate that?
    Mr. Lipparelli. The question about compacts has been 
addressed, at least in its first iteration, with the 
connections between New Jersey, Delaware, and Nevada. I was a 
part of that process before I left the Gaming Control Board, 
and the prospect that States could come together similar like 
they come together in the form of lottery, set common standards 
that seem to be addressing the common issues between those 
States.
    Chairman Chaffetz. And, Mr. Campbell, how are you going to 
enforce an expansion of gaming online? How many resources--he 
was asked earlier how many resources you can allocate to this. 
But if somebody in Nevada has a problem with the State in 
Delaware, who's going to enforce that?
    Mr. Campbell. Well, again, as we go about our intelligence 
and information gathering, we assess for the most serious 
threats that we would target that could be related to online 
gaming from support to terrorism or transnational organized 
crime and so forth. And then, again, as we do always, that's 
how we would dedicate our resources and potentially incorporate 
the State and local authorities in that effort as well.
    Chairman Chaffetz. Mr. Lipparelli, you have been quoted as 
saying that New Jersey should not be permitting PokerStars to 
return to the U.S. market. Why did you take that position?
    Mr. Lipparelli. I don't think I ever took that specific 
position. The position that I took vis--vis PokerStars and 
other companies like them who had entered the U.S. marketplace 
in violation of State laws, including my own in Nevada, was 
they should stand for suitability just like every other 
applicant. If they can survive that scrutiny and they can have 
an appropriate answer, it's for each one of these regulatory 
boards to decide whether that's a suitable method of operation, 
that if they were here before and settled their differences 
with the Justice Department to the tune of hundreds of millions 
of dollars, I think every gaming commission chairman or every 
board member that authorizes licenses should take that into 
consideration.
    Chairman Chaffetz. You said, quote, ``Essentially 
trading''--you said--your quote regarding PokerStars, your 
quote: ``Essentially trading their credibility away. You might 
as well not have a licensing process,'' end quote. So you've 
changed your position since then?
    Mr. Lipparelli. I take exception to the term 
``PokerStars.'' What I made in that comment was if the bar 
would be set so low by licensing boards to ignore the kinds of 
activities that PokerStars was engaged in, then, yes, I think 
there is a real question as to the validity of licensing if 
that kind of activity is allowed.
    Chairman Chaffetz. Fair enough. Okay.
    I have gone past my time. We have zero time on the clock 
with 300 people who have not yet voted on the Cole amendment on 
the floor.
    I want to thank you all for being here. You offer an 
interesting perspective, the local region, the State 
perspective, the Federal law enforcement issues. I do 
appreciate all of you being here.
    This is an important topic. It's something that is 
permeating the United States. It's on a lot of people's minds. 
There are various pieces of legislation in both directions out 
there. And I do appreciate your participation. It was a good 
hearing today.
    At this point, the committee stands adjourned.
    [Whereupon, at 4:20 p.m., the committee was adjourned.]


                                APPENDIX

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