[Congressional Record Volume 145, Number 114 (Thursday, August 5, 1999)]
[Extensions of Remarks]
[Pages E1795-E1796]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


             GAMBLING ATM, AND CREDIT/DEBIT CARD REFORM ACT

                                 ______
                                 

                          HON. JOHN J. LaFALCE

                              of new york

                    in the house of representatives

                        Thursday, August 5, 1999

  Mr. LaFALCE. Mr. Speaker, I am today introducing legislation to 
implement one of the more important recommendations of the National 
Gambling Impact Study Commission to help lessen the potential financial 
losses of compulsive gambling for individuals and families. My 
legislation, the ``Gambling ATM and Credit/Debit Card Reform Act'', 
amends federal law to reduce the ready availability of cash and credit 
for gambling by removing automated transfer machines (ATMs), credit 
card terminals, debit card point-of-sale machines and other electronic 
cash dispensing devices from the immediate area of gambling activities.
  The National Gambling Impact Study Commission recently completed the 
nation's first comprehensive analysis of legalized gambling in more 
than twenty years. The Commission took on one of the most difficult and 
divisive issues in America today and produced an extremely thoughtful 
report with more than 70 recommendations for changes in gambling 
policy. The thoroughness of the Commission's effort, despite 
significant divisions and difficulties, is commendable and clearly 
justifies the efforts of those of us who sponsored legislation to 
create the Commission three years ago.
  A major finding of the Commission is that America has been 
transformed during the past 20 years from a nation in which legalized 
gambling was localized and limited to one in which it is almost 
omnipresent and a major economic and entertainment activity. Some form 
of legalized gambling is now permitted in 47 states and the District of 
Columbia. Thirty-seven states officially sponsor gambling through state 
lotteries. Americans now spend an estimated $650 billion a year on 
legalized gambling--more than they spend on movies, records, theme 
parks, professional sports and all other forms of entertainment 
combined.
  The Commission also found that while legalized gambling can produce 
positive economic benefits for the communities in which it is 
introduced, it also produces significant negative consequences for 
millions of individuals and families--consequences such as bankruptcy, 
crime, divorce, abuse and even suicide. A specific concern of the 
Commission has been the dramatic increase in problem and pathological 
gambling. Studies suggest that more than 5 million Americans are 
pathological or problem gamblers, and that another 15 million have been 
identified as ``at-risk'' or compulsive gamblers. Growth in problem and 
compulsive gambling has been particularly noticeable among women and 
includes growing numbers of teenagers.
  The Commission identified the ready availability of cash and credit 
in and around gambling establishments as a major factor contributing to 
irresponsible gambling and to problem and pathological gambling 
behavior. Between forty and sixty percent of all money wagered by 
individuals in casinos, for example, is not physically brought onto the 
premises but is obtained by gamblers after their arrival. Much of this 
money derives from credit markers extended by casinos, but a growing 
portion involves cash derived from ATMs and debit cards and cash 
advances on credit cards.
  Credit cards, debit cards and ATMs have long been used within 
gambling resort hotels and near other gambling facilities. But their 
availability and use on gambling floors for purposes of making bets or 
purchasing playing chips was generally prohibited. This changed in 1996 
when the New Jersey Casino Control Commission approved the use of 
credit card point-of-sale machines at gambling tables for direct 
purchases of playing chips and slot tokens. The action was immediately 
recognized by gambling experts as one of the ``most potentially 
dramatic changes'' in gambling in decades that would result in more 
impulse gambling by consumers and higher revenues for casinos. Since 
then, ATM machines have been moved from outside casinos and other 
gambling establishments to locations near gambling floors and debit 
card machines have also been installed directly at gaming tables.
  Allowing gamblers to use ATMs, credit and debit cards directly for 
gambling removes one of the last remaining checks on compulsive or 
problem gambling--the need to walk away to find more cash to gamble. 
This separation helps break the excitement of the moment and permits 
many gamblers to walk away. Providing electronic transfers of 
additional cash not only feeds compulsive behavior, but makes it easier 
for problem gamblers to bet all their available cash, draw down their 
bank accounts, and then tap into the available credit lines of their 
credit cards as well. Financial institutions become unwitting 
accomplices in encouraging gamblers to bet more money than they 
intended and more than most can afford.
  My legislation addresses this problem in a number of ways. First, it 
amends the Truth in Lending Act (TILA) to prohibit gambling 
establishments from placing credit card terminals, or accepting credit 
cards for payment or cash advances, in the immediate area where any 
form of gambling is conducted. It also amends the Electronic Funds 
Transfer Act (EFTA) to impose a similar prohibition on the placing of 
any automated teller machine, point-of-sale terminal or other 
electronic cash dispensing device in the immediate area where gambling 
occurs. The bill directs the Federal Reserve Board to publish and 
enforcement rules for assuring that all electronic transfers of cash 
and credit are physically segregated to the extent possible from all 
gambling areas. And it provides for comparable civil liability as 
provided

[[Page E1796]]

elsewhere in TILA and EFTA to permit individuals to file private 
actions against gambling establishments that violate these 
restrictions.

  Mr. Speaker, the National Commission's report confirms that legalized 
gambling has become a national phenomenon. While it is unreasonable to 
think we can stop its growth, we can take reasonable measures to help 
minimize the potential financial strain and anguish for American 
families. My legislation does not prohibit casinos, racetracks and 
other gambling facilities from providing or using credit card, ATM and 
debit card devices. It merely requires that these devices be used for 
the purposes they were intended and not to encourage irresponsible or 
problem gambling.
  I believe this is reasonable and worthwhile legislation. I urge its 
adoption by the Congress.

                                H.R. --

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Gambling ATM and Credit/
     Debit Card Reform Act.''

     SEC. 2. IMPLEMENTATION OF THE NATIONAL GAMBLING COMMISSION'S 
                   RECOMMENDATIONS RELATING TO BANKING AND CREDIT.

       (a) Initiation of Electronic Fund Transfers in Gambling 
     Establishments.--The Electronic Fund Transfer Act (15 U.S.C. 
     1693 et seq.) is amended--
       (1) by redesignating sections 918, 919, 920, and 921 as 
     sections 919, 920, 921, and 922, respectively; and
       (2) by inserting after section 917 the following new 
     section:

     ``SEC. 918. PLACEMENT OF ELECTRONIC TERMINALS IN GAMBLING 
                   ESTABLISHMENTS.

       ``(a) In General.--No person may place, or cause to be 
     placed, an electronic terminal in the immediate area of a 
     gambling establishment where any form of wager or bet is made 
     or accepted, any game of chance is played, any gambling 
     device is used, or any other form of gambling is carried on.
       ``(b) Regulations.--
       ``(1) In general.--The Board will prescribe such 
     regulations as the Board may consider to be appropriate to 
     ensure that the initiation of electronic fund transfers by 
     consumers is kept, to the extent practicable, physically 
     segregated from any activity described in subsection (a).
       ``(2) Separate setting.--Such regulations shall include a 
     clear delineation of the setting in which, and the 
     circumstances under which, electronic fund transfers should 
     be conducted in a location physically segregated from an area 
     where any activity described in subsection (a) is routinely 
     carried on.
       ``(c) Liability.--For purposes of section 915, a failure to 
     comply with the requirements of subsection (a) with regard to 
     any electronic terminal shall be considered a failure to 
     comply with a provision of this title with respect to any 
     consumer who initiates an electronic fund transfer at such 
     terminal while such violation continues.
       ``(d) Definitions.--For purposes of this section, the 
     following definitions shall apply:
       ``(1) Gambling device.--The term `gambling device' has the 
     meaning given to such term in section 41311(b) of title 49, 
     United States Code.
       ``(2) Gambling establishment.--The term `gambling 
     establishment' has the meaning given to such term in section 
     1081 of title 18, United States Code.''.
       (b) Use of Credit Cards to Initiate Extensions of Credit in 
     Gambling Establishments.--
       (1) In general.--Chapter 2 of the Truth in Lending Act (15 
     U.S.C. 1631 et seq.) is amended by adding at the end the 
     following new section:

     ``SEC. 140 PROHIBITION ON INITIATION OF EXTENSIONS OF CREDIT 
                   IN CERTAIN GAMBLING AREAS WITHIN GAMBLING 
                   ESTABLISHMENTS.

       ``(a) In General.--No person may--
       ``(1) place, or cause to be placed, an electronic terminal; 
     or
       ``(2) otherwise accept the use of a credit card by a 
     consumer to initiate a consumer credit transaction to pay for 
     money, property, or services obtained by the consumer,

     in the immediate area of a gambling establishment where any 
     form of wager or bet is made or accepted, any game of chance 
     is played, any gambling device is used, or any other form of 
     gambling is carried on.
       ``(b) Regulations.--
       ``(1) In general.--The Board shall prescribe such 
     regulations as the Board may consider to be appropriate to 
     ensure that the use of an electronic terminal or the use of a 
     credit card to initiate a consumer credit transaction to pay 
     for money, property, or services obtained by a consumer is 
     kept, to the extent practicable, physically segregated from 
     any activity described in subsection (a).
       ``(2) Separate setting.--Such regulations shall include a 
     clear delineation of the setting in which, and the 
     circumstances under which, any use of an electronic terminal 
     or credit card referred to in paragraph (1) should be 
     conducted in a location physically segregated from an area 
     where any activity described in subsection (a) is routinely 
     carried on.
       ``(c) Civil Liability.--
       ``(1) In general.--Any person who fails to comply with any 
     provision of this title with respect to any electronic 
     terminal or the acceptance of a credit card to initiate a 
     consumer credit transaction at a place in a gambling 
     establishment that constitutes a violation shall be liable to 
     any consumer who uses the electronic terminal or provides a 
     credit card at such place in an amount equal to the sum of 
     the amounts determined under each of the following 
     subparagraphs:
       ``(A) Actual damages.--The greater of--
       ``(i) the amount of any actual damage sustained by the 
     consumer as a result of such failure; or
       ``(ii) any amount paid, directly or with the proceeds of 
     the credit transaction, by the consumer to such person.
       ``(B) Punitive damages.--
       ``(i) Individual actions.--In the case of any action by an 
     individual, such additional amount as the court may allow.
       ``(ii) Class actions.--In the case of a class action, the 
     sum of--
       ``(I) the aggregate of the amount which the court may allow 
     for each named plaintiff; and
       ``(II) the aggregate of the amount which the court may 
     allow for each other class member, without regard to any 
     minimum individual recovery.
       ``(C) Attorneys' fees.--In the case of any successful 
     action to enforce any liability under subparagraph (A) or 
     (B), the costs of the action, together with reasonable 
     attorneys' fees.
       ``(2) Factors to be considered in awarding punitive 
     damages.--In determining the amount of any liability of any 
     person under paragraph (1)(B), the court shall consider, 
     among other relevant factors--
       ``(A) the frequency and persistence of noncompliance by 
     such person;
       ``(B) the nature of the noncompliance;
       ``(C) the extent to which such noncompliance was 
     intentional; and
       ``(D) in the case of any class action, the number of 
     consumers adversely affected.
       ``(d) Definitions.--For purposes of this section, the 
     following definitions shall apply:
       ``(1) Electronic terminal.--The term `electronic 
     terminal'--
       ``(A) means an electronic device, other than a telephone 
     operated by a consumer, through which a consumer may initiate 
     a consumer credit transaction in payment for any money, 
     property, or services obtained by the consumer; and
       ``(B) includes point-of-sale terminals, automated teller 
     machines, and cash dispensing machines.
       ``(2) Gambling device.--The term `gambling device' has the 
     meaning given to such term in section 41311(b) of title 49, 
     United States Code.
       ``(3) Gambling establishment.--The term `gambling 
     establishment' has the meaning given to such term in section 
     1081 of title 18, United States Code.''.
       (2) Clerical amendment.--The table of sections for chapter 
     2 of the Truth in Lending Act is amended by inserting after 
     the item relating to section 139 the following new item:


``140. Prohibition on initiation of extensions of credit in certain 
              gambling areas within gambling establishments.''.

              

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