[Congressional Record Volume 149, Number 40 (Wednesday, March 12, 2003)]
[Extensions of Remarks]
[Page E439]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




 INTRODUCTION OF INTERNET GAMBLING LICENSING AND REGULATION COMMISSION 
                                  ACT

                                 ______
                                 

                         HON. JOHN CONYERS, JR.

                              of michigan

                    in the house of representatives

                       Wednesday, March 12, 2003

  Mr. CONYERS. Mr. Speaker, you might remember a failed experiment the 
U.S. government tried in the 1920s called Prohibition. Back then, the 
government tried to prevent people from drinking alcohol by making it 
illegal. We know what happened--speakeasies flourished, alcohol 
consumption spiraled, and organized crime infiltrated and profited from 
the provision of alcoholic beverages.
  Today, Congress is rushing to pass a similar type of ill-conceived 
prohibition: the prohibition of Internet gambling. Gaming 
prohibitionists believe they can somehow stop the millions of Americans 
who gamble online from visiting Internet gaming sites by passing 
legislation to prevent the use of credit cards and other bank 
instruments to gamble on the Internet. Just as outlawing alcohol did 
not work in the 1920s, the current attempts to prohibit online gaming 
will not work, either.
  Instead of imposing an Internet gambling prohibition that will drive 
gambling underground and into the hands of unscrupulous merchants, 
Congress should examine the feasibility of strictly licensing and 
regulating the online gaming industry. A regulated gambling industry 
will ensure that gaming companies play fair and drive out dishonest 
operators. It also provides a potential tax revenue source for 
financially-strapped States.
  That is why I am introducing legislation to create a national 
Internet Gambling Licensing and Regulation Study Commission to evaluate 
how best to regulate and control online gambling in America to protect 
consumers, to provide badly needed tax revenue, and to prevent criminal 
elements from penetrating this industry. Rather than passing 
ineffective prohibition legislation in the vain hope that the problems 
related to Internet gambling will simply go away, the Commission will 
confront the issues head-on and formulate realistic, workable 
solutions.
  Today in our country, gambling is a highly regulated, $26 billion 
dollar industry that creates substantial tax revenue for the States and 
provides a safe environment for the 52 million people who gamble in 
U.S. facilities. The Commission will explore whether the same 
conditions that afford safety and fair play in land-based casinos can 
and should exist for Internet-based casinos. In addition, the 
Commission will study whether the problems identified by gambling 
prohibitionists--money laundering, underage gambling, and gambling 
addictions--are better addressed by an ineffective ban or by an online 
gaming industry that is tightly regulated by the States.

  First, some claim that Internet gambling sites are being used to 
launder money for terrorists or other criminal organizations. Although 
there is no evidence that Internet gambling is any more susceptible to 
money laundering than other types of e-commerce, it is still a 
significant law enforcement concern. In this regard, it is useful to 
compare a system where Internet gambling is legal and regulated to 
another legislative proposal that would prohibit the use of credit 
cards and other financial instruments for online gambling. What that 
other bill essentially says to gamblers is this: use cash and offshore 
bank accounts if you want to bet online. This is nonsensical on its 
face. If you truly want to prevent money laundering, the last thing you 
would do is eliminate the financial controls and recordkeeping that 
credit cards and U.S. bank accounts provide. To the contrary, a regime 
where there is strict oversight by the States and transparent 
recordkeeping is far more likely to prevent money laundering and give 
law enforcement the tools it needs to effectively prosecute criminals 
and terrorists.
  Second, the problem of underage gambling should not be discounted. 
Children can be kept off of gambling websites, however, by requiring 
the use of a credit card, PIN numbers, and other screening devices. In 
fact, Congress recognized the usefulness of credit cards as a tool to 
protect minors on the Internet when it passed the Children's Online 
Protection Act. Since Internet gambling prohibitions will not eliminate 
online gambling--just drive it underground--children will be better 
protected by a gaming industry that is held accountable to strict 
standards established by the States.
  Finally, we must also consider the needs of problem gamblers and 
gambling addicts. Certainly, online gambling sites present difficulties 
for these individuals, just as land-based casinos do. Although 
unlicensed, unregulated gaming sites may have no incentive to prevent 
problem gambling, it is possible to establish a regulatory framework 
that can set financial limits on an individual's gambling, through the 
use of shared electronic recordkeeping. Technologies can even be 
employed to identify problem gamblers and put them in touch with 
organizations where they can get help. For this reason, the Internet 
affords the potential for greater protection for problem gamblers than 
land-based casinos.

  Until now, Republicans and Democrats have stood together against 
those who wanted to cut off access to the Internet, restrict its 
boundaries, or use it for some special purpose. Except in the narrow 
areas of child pornography and other obvious criminal activities, 
Congress has rejected attempts to make Internet Service Providers, 
credit card companies, and the technology industry policemen for the 
Internet. We should not head down this road now. If we do, we'll be 
joining countries like Iraq, China, and other totalitarian regimes who 
limit their citizens' access to the Internet.
  Attempts to prohibit Internet gambling in the name of fighting crime 
and protecting children and problem gamblers will have the opposite 
effect. Prohibition will simply drive the gaming industry underground, 
thereby attracting the least desirable operators who will be out of the 
reach of law enforcement. A far better approach is to allow the States 
to strictly license and regulate the Internet gambling industry, to 
foster honest merchants who are subject to U.S. consumer protection and 
criminal laws.

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