[Congressional Record Volume 152, Number 90 (Wednesday, July 12, 2006)]
[Extensions of Remarks]
[Page E1380]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


           INTERNET GAMBLING PROHIBITION AND ENFORCEMENT ACT

                                 ______
                                 

                               speech of

                        HON. SHEILA JACKSON-LEE

                                of texas

                    in the house of representatives

                         Tuesday, July 11, 2006

  Ms. JACKSON-LEE of Texas. Mr. Speaker, I thank the gentleman for 
yielding.
  I rise in opposition to H.R. 4411. Clearly, gambling on the internet 
has become an increasingly popular activity and lucrative business. It 
is estimated that the internet gambling market now exceeds $12 billion, 
and about $6 billion comes from U.S. bettors. It is estimated that 
there are now over 2,000 gambling websites. But is internet gambling a 
net plus or minus for society? That is the question that I hoped the 
hearings held by the Judiciary Committee on this legislation would 
answer. Regrettably, my questions have not been answered 
satisfactorily. Therefore, I cannot support the bill.
  My concerns are four-fold.
  First, this legislation attempts to clarify the Wire Act to prohibit 
not only sports betting, but traditional gambling such as online poker. 
The bill also attempts to updates the Wire Act to cover more Internet 
technologies, such as wireless infrastructures that increasingly make 
up the Internet. My concerns here Mr. Speaker is that factual record 
regarding the need for amending the Wire Act has not been demonstrated 
and, more important, we did not have the benefit of the views of senior 
prosecutors and Justice Department officials on the necessity of 
amending the Wire Act. I note that the DOJ representative who appeared 
before the subcommittee, Mr. Bruce Orr, is not a presidential 
appointee, was not authorized to speak for the Administration, and did 
not seem deeply immersed in the provisions of the bill. This lack of 
solid legislative-executive dialectic is sufficient in itself to hold 
the bill in subcommittee until a more reliable factual record is 
developed.
  Second, I am also concerned that the carve-out for internet gambling 
on horseracing will place the United States at risk of being found in 
violation of trade laws by the World Trade Organization. The bill, as 
written, can be arguably characterized as disadvantaging European and 
Australian based internet gaming companies who would be excluded from 
the American market, while their American counterparts would not be 
excluded. Should the United States be found to have committed a trade 
violation, I am concerned that Europe and Australia will retaliate 
against American goods and services.
  Third, Mr. Speaker I was very impressed with the testimony of Mr. Sam 
Vallandingham, Vice President, First State Bank, who testified on 
behalf of small independent community banks. Mr. Vallandingham 
testified before the Judiciary Committee, and I daresay with great 
knowledge and conviction, that financial institutions, especially 
relatively small ones like the ones he represents, to identify, 
monitor, and track internet gambling transactions of its account 
holders. Mr. Vallandingham informed the subcommittee that financial 
institutions simply did not possess the sophisticated detection 
technology that could make it conceivable to identify problematic 
accounts. Since the risk of violation of this bill is great (violation 
carries penal sanctions), it does not appear wise or prudent to impose 
this burden on small financial institutions.
  Finally, Mr. Speaker, I would be remiss if I did not point an irony. 
Instead of providing minors with greater protections, this legislation 
threatens to make it much easier for minors to utilize the services of 
online gambling companies that operate across State lines. In addition, 
the legislation has the potential to generate a substantial increase in 
acts of money laundering and undoubtedly will expose various banks and 
Internet service providers to excessive liability and burdensome 
regulations.
  According to the bill's lead sponsor, the gentleman from Virginia, 
one of the primary purposes behind the introduction of the bill was to 
stop online gambling from occurring. However, in its current form, the 
legislation only prohibits certain forms of online gambling while 
expressly permitting several other forms to proceed unfettered. 
Interestingly enough, these ``special interest carve-outs'' were the 
main focal point of a recent article in The Hill newspaper.
  In that article, the key provisions in this bill were compared to a 
similar Internet gambling bill that had been introduced by the 
gentleman from Virginia and defeated in a previous Congress. The 
article determined that:

     . . . The same Internet gambling legislation Abramoff fought 
     so hard to defeat on behalf of a client that helped states 
     conduct lotteries over the Internet now includes an exemption 
     to protect those lotteries.

  The article went on to point out that in addition to the exemption 
for lotteries, the bill also included language to protect wagering on 
interstate pari-mutuel betting on horse races from the scope of the 
bill's ban.
  These blanketed exemptions are obviously the byproduct of powerful 
gambling interests and can be directly traced back to three particular 
provisions of the bill--sections 3, 5, and 6. Section 3, for example, 
includes language which expressly exempts gambling on intrastate 
sanctioned activities, such as lotteries.
  All in all, Mr. Speaker, we can do better than what is reflected in 
this legislation. A bad bill is worse than no bill at all. We should 
retain the bill and continue working to improve it, if we can.

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