[Congressional Record Volume 149, Number 2 (Wednesday, January 8, 2003)]
[Extensions of Remarks]
[Pages E31-E32]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




             THE CONSUMER PROTECTION FOR ON-LINE GAMES ACT

                                 ______
                                 

                       HON. CAROLYN C. KILPATRICK

                              of michigan

                    in the house of representatives

                        Tuesday, January 7, 2003

  Ms. KILPATRICK. Mr. Speaker, 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.
  The Consumer Protection for On-line Games Act, which I am introducing 
today, will allow U.S. consumers to know if the games they are playing 
are fraudulent. The bill 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, the bill proposes the following:
  1. Establishes the Federal Trade Commission as the agency responsible 
for monitoring games of chance 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.

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  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 on-line gaming.
  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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