[Congressional Record Volume 143, Number 36 (Wednesday, March 19, 1997)]
[Senate]
[Pages S2560-S2561]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. KYL (for himself, Mrs. Feinstein, Mr. Graham, Mr. 
        Hutchinson, Mr. Grassley, and Mr. Johnson):
  S. 474. A bill to amend sections 1081 and 1084 of title 18, United 
States Code; to the Committee on the Judiciary.


             THE INTERNET GAMBLING PROHIBITION ACT OF 1997

  Mr. KYL. Mr. President, I rise to introduce the Internet Gambling 
Prohibition Act of 1997. It will outlaw gambling on the Internet. I 
believe it will protect children from logging on to the Internet and 
being exposed to activities that are normally prohibited to them. And 
for those people with a gambling problem, my bill will make it harder 
to gamble away the family paycheck.
  Gambling erodes values of hard work, sacrifice, and personal 
responsibility. Although the social costs of gambling are difficult to 
quantify, research indicates they are potentially staggering. Gambling 
is a growing industry in the United States, with revenues approaching 
$550 billion last year--three times the revenues of General Motors 
Corp. In 1993, more Americans visited casinos than attended a major 
league baseball game.
  The problem can only grow worse with online casinos. Now it is no 
longer necessary to go to a casino or store where lottery tickets are 
sold. Anyone with a computer and a modem will have access to a casino: 
Internet users can access hundreds of sites for blackjack, craps, 
roulette, and sports betting. Gambling addiction is already on the 
rise. Online gambling will only increase the problem.
  Why is this bill necessary? It dispels any ambiguity by making clear 
that all betting, including sports betting, is illegal. Currently, 
nonsports betting is interpreted as legal. The bill also clarifies the 
definition of bets and wagers. This ensures that those who are gambling 
cannot circumvent the law. For example, virtual gaming businesses have 
been known to offer prizes instead of money, in an attempt to evade the 
law.
  Additionally, my bill clarifies that Internet access providers are 
covered by the law. As the National Association of Attorneys General 
[NAAG] task force on Internet Gambling reported, ``this is currently 
the most important section to State and local law enforcement agencies, 
because it provides a civil enforcement mechanism.'' FCC-regulated 
carriers notified by any State or local law enforcement agency of the 
illegal nature of a site are required to discontinue services to the 
malfeasor. NAAG believes that this can be a very effective deterrent. 
The bill includes interactive computer-service providers among those 
entities required to discontinue such service upon notice. Federal, 
State, and local law enforcement entities are explicitly authorized to 
seek prospective injunctive relief against continued use of a 
communications facility for purposes of gambling.
  The Internet Gambling Prohibition Act makes explicit the intent of 
Congress to create extraterritorial jurisdiction regarding Internet 
gambling activities. Too often, illicit operators of virtual casinos 
set up shop in friendly jurisdictions beyond the direct application of 
U.S. law. It will also require the DOJ to report on the difficulties 
associated with enforcing the statute. Finally, it places some burden 
on the bettor.
  The Internet has great potential to promote both educational 
opportunities and business expansion in this country. At the same time, 
the Internet is fast becoming a place where inappropriate activities 
such as gambling, pornography, and consumer fraud thrive. Recently, 
many businesses have welcomed law enforcement's involvement in cracking 
down on consumer fraud. We must find a constitutional way to deal with 
the other problems raised by this revolution in communications. I 
believe that it is possible to impose some conditions, as we have in 
other areas, without violating free speech rights.
  There is growing support for changes to current law. As I mentioned, 
the NAAG has a task force on Internet gambling, and the report of the 
task

[[Page S2561]]

force--authored by Attorneys General Dan Lungren and Hubert Humphrey--
called for a legislative remedy to stem the tide of gambling 
electronically. NAAG has endorsed my bill.
  Mr. President, the Internet Gambling Prohibition Act of 1997 ensures 
that the law will keep pace with technology and keep gambling off the 
Internet. I urge my colleagues to pass the bill.
 Mr. GRAHAM. Mr. President, I join my friend and colleague from 
Arizona, Senator Kyl, in cosponsoring the Internet Gambling Prohibition 
Act introduced today, which is intended to address a growing problem in 
the United States as our technology continues to modernize our modes of 
communication.
  This legislation is an attempt to take a step forward in meeting the 
needs of State law enforcement organizations and officials.
  With the development of the Internet World Wide Web, the ability of 
Americans to access information for their personal and professional use 
has taken a quantum leap. It is safe to say that the Internet is one of 
the more important technological advances of the late 20th century with 
respect to the influence that the technology can have on the lives of 
so many Americans.
  The number of American Internet users has grown from 1 million in 
1992 to over 50 million today. This number is expected to grow to 
several hundred million users by the year 2000. As we bring Internet 
technology into our schools, we will see greater use of the Internet 
particularly among our youth, many who are already adept at using their 
home computers and surfing the Internet for educational and 
recreational purposes.
  With this convenience and easy access to a variety of information 
sources, many of which are of great educational, cultural and 
professional value, come certain expected problems. The one that I want 
to speak to briefly is that of the increasing use of the Internet for 
the purposes of gambling.
  The National Association of Attorney Generals has recently studied 
the problem of Internet gambling. In a 1996 report, ``Gambling on the 
Internet,'' the Association cited the following:

       The availability of gambling on the Internet * * * 
     threatens to disrupt each State's careful balancing of its 
     own public welfare and fiscal concerns, by making gambling 
     available across State and national boundaries, with little 
     or no regulatory control.
       There are literally hundreds of gambling-related sites on 
     the Internet. Dozens more are being added monthly.

  Let me make several key distinctions that must be understood with 
respect to this legislation.
  First, it is important to note that the number of actual online 
gambling operations are few at this time due to electronic commerce and 
technical limitations. Advancements in technology, however, make such 
shortcomings temporary. Only 6 months ago, there were only 17 active 
Internet gambling sites on the World Wide Web. Today, there are over 
200. And, today, there are hundreds of advertisements for gambling as 
well as informational how-to sites on the Internet. In short, the 
Internet's ability to serve as an information conduit for the gambling 
industry has been recognized.
  Second, States have historically been the primary regulator of 
gambling activities. However, the widespread use of the Internet and 
its potential to serve as a conduit of gambling activities across 
national and State borders, serves to undermine States' regulatory 
control. Our legislation is not intended to disrupt this prerogative, 
but rather to assist States' ability to enforce its own gambling laws.
  Finally, the legislation would not hold Internet access providers--
such as America Online--liable for gambling activities that occur on 
the Internet. However, the Internet access providers are required, once 
notified by a State or law enforcement agency of the illegal activity, 
to discontinue Internet services to the malfeasor.
  Mr. President, there is growing awareness of the importance of this 
issue in my State of Florida. The attorney general of the State of 
Florida wrote me on February 17, 1997, urging strong support of this 
legislation. I am committed to providing strong support in the Congress 
for Florida law enforcement concerns.
  It is timely and necessary for the Congress to assist States on this 
growing problem which undermines States' jurisdiction and control. We 
should support the efforts of our State and local law enforcement 
officials so that they can prevent the growth of activities which are 
illegal in that State.
  I thank my colleague from Arizona for his work in drafting this 
important legislation. I look forward to working with him this year in 
support of passage of this bill.
  Mr. President, I ask my colleagues in the Senate to join us in 
supporting this measure.
                                 ______