[Congressional Record Volume 148, Number 64 (Friday, May 17, 2002)]
[Extensions of Remarks]
[Pages E842-E843]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




        H.R. 4652, THE CONSUMER PROTECTION FOR ON-LINE GAMES ACT

                                 ______
                                 

                       HON. CAROLYN C. KILPATRICK

                              of michigan

                    in the house of representatives

                         Thursday, May 16, 2002

  Ms. KILPATRICK. Mr. Speaker, on May 2nd, I introduced H.R. 4652, the 
Consumer

[[Page E843]]

Protection for On-line Games Act. I am one who has never been an 
advocate of the gaming industry. The City of Detroit has legalized 
gaming, and now it is a fixture in our economy.
  The gaming industry has broadened its exposure over on-line and 
wireless communications networks. People do not have to go to casinos 
in Las Vegas, Reno, Detroit, Atlantic City or other gaming sites to 
gamble. They can play games of chance over the Internet from the 
privacy of their own homes.
  According to one financial analysis, Internet gambling is a $1 
billion industry and is forecasted to grow to $5 billion by 2005. There 
are nearly 1 million paying users of the largest network games and free 
sweepstakes sites which are among the most popular Internet 
destinations.
  Many of the network gaming sites originate from offshore websites, 
and are beyond the reach of States and local authorities, even those 
authorities that prohibit Internet gaming in their jurisdictions. Local 
and state governments devote few resources to regulate or enforce laws, 
against network gaming. No protections exist to ensure the integrity of 
the game, protection from minors seeking to patronize games, or 
protection from excessive financial loss. Therefore, network gaming 
continues with very little regulation and with very few guarantees that 
the games of chance or sweepstakes one finds on internet sites are 
above board.
  My bill will allow U.S. consumers to know if the games they are 
playing are fraudulent. It will permit U.S. consumers to participate in 
online games with the security of knowing they are playing from a 
straight deck of cards. Specifically, H.R. 4652 proposes the following:
  1. Establishes the Federal Trade Commission as the agency responsible 
for monitoring games of chances offered on the Internet or wireless 
network.
  2. Prohibits network game operators subject to U.S. law from making 
false or misleading claims regarding the fairness of such games.
  3. Requires self-regulatory organizations to comply with specific 
minimum requirements.
  4. Specifies that States must notify the FTC when it brings action 
against a network game provider and allows the FTC to intervene in any 
action brought on by the state and file petitions for appeal.
  I know feelings run strong on both sides of the gaming question. It 
is a policy area with which I have some issues. The fact exists, 
however, that gaming websites are available for everyone's 
entertainment. It is my hope that this legislation will prevent present 
and future abuses and reduce the incidence of fraud. America has a 
chance to become a leader in this emerging global industry, but we 
presently lag behind other countries which are dealing honestly and 
openly with the issue of online gaming.
  This bill is not perfect, but it offers a proposal for a regulatory 
structure that does not impose its will over the States, especially 
those States who want to effectively regulate network gaming operations 
within their borders. I hope that Congress will seriously study this 
proposal and raise the level of debate on this issue. I look forward to 
working with my colleagues to improve this measure as it travels 
through the legislative process.

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