[Congressional Record Volume 153, Number 195 (Wednesday, December 19, 2007)]
[Extensions of Remarks]
[Pages E2633-E2634]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




            A LETTER FROM GOVERNOR MITCH DANIELS OF INDIANA

                                 ______
                                 

                          HON. MARK E. SOUDER

                               of indiana

                    in the house of representatives

                      Wednesday, December 19, 2007

  Mr. SOUDER. Madam Speaker, I wish to submit into the Record a letter 
from Indiana Governor Mitch Daniels expressing his concerns regarding 
H.R. 2046, the Internet Gambling Regulation and Enforcement Act, which 
would legalize Internet gambling and undermine the ability of states to 
make and enforce their own gambling laws. I share Governor Daniel's 
opposition to this bill, and will fight to make sure H.R. 2046 does not 
pass the House.
                                                 State of Indiana,


                                       Office of the Governor,

                          Indianapolis, Indiana, November 9, 2007.
     Re Internet Gambling Regulation and Enforcement Act of 2007 
         (H.R. 2046)

     Hon. Harry Reid,
     Majority Leader, U.S. Senate,
     Washington, DC.
     Hon. Mitch McConnell,
     Minority Leader, U.S. Senate,
     Washington, DC.
     Hon. Nancy Pelosi,
     Speaker, House of Representatives,
     Washington, DC.
     Hon. John Boehner,
     Minority Leader, House of Representatives,
     Washington, DC.
       Dear Senator Reid, Senator McConnell, Speaker Pelosi and 
     Representative Boehner: As Governor of the State of Indiana, 
     I wish to express my concerns about a bill currently in the 
     U.S. Congress known as the Internet Gambling Regulation and 
     Enforcement Act of 2007 (``H.R. 2046''), which would legalize 
     Internet gambling and undermine the ability of states to make 
     and enforce their own gambling laws.
       In contrast with limited, state-regulated forms of gambling 
     such as horse tracks and riverboat casinos, gambling via the 
     Internet is available from virtually any location (e.g., 
     homes, offices, schools) twenty-four hours per day in an 
     anonymous environment. Research and studies have indicated 
     that Internet gambling is more accessible to minors, more 
     attractive to college-age individuals, more susceptible to 
     fraud and other criminal activity, and harder to regulate. 
     These are some of the reasons why Indiana recently updated 
     its gambling laws to specifically prohibit Internet gambling. 
     Using the Internet

[[Page E2634]]

     to engage in gambling in Indiana, or with a person located in 
     Indiana, is a felony under Indiana law.
       Last year, in response to the growth of the Internet 
     gambling problem, Congress passed the Unlawful Internet 
     Gambling Enforcement Act of 2006, UIGEA, which has 
     effectively driven many illicit gambling operators from the 
     U.S. marketplace. But now, less than a year later, H.R. 2046 
     proposes to do the opposite, by replacing state regulations 
     with a federal licensing program that would permit Internet 
     gambling operators to engage in business with U.S. customers. 
     The Department of Treasury would alone decide who would 
     receive federal licenses and whether the holders of those 
     licenses were complying with their terms. This would 
     represent the first time in history that the federal 
     government would be responsible for issuing gambling 
     licenses.
       Furthermore, a federal license under H.R. 2046 would 
     supersede any state enforcement action because, as written, 
     this bill grants a ``safe harbor'' defense against any 
     prosecution or enforcement under any state or federal law to 
     any person who possesses a valid license and complies with 
     the requirements of H.R. 2046. In other words, any 
     gambling operator who obtains a license from the Treasury 
     Department and follows the requirements of H.R. 2046 would 
     be excused from criminal charges.
       Essentially, the bill would legalize Internet gambling in 
     each state, unless the governor of a state clearly specifies 
     the existence of a current state restriction e.g., an 
     existing state law) barring Internet gambling. On that basis, 
     a state may ``opt out'' of the legalization of Internet 
     gambling or certain types of gambling. However, this opt-out 
     provision is problematic because it does not clearly preserve 
     the right of states to place conditions on legal types of 
     gambling. H.R. 2046 also does not grant Indiana any right to 
     challenge a licensing decision by the Treasury Department or 
     bring an enforcement action against a gambling operator who 
     circumvents Indiana's prohibition on Internet gambling.
       In addition, even if Indiana exercises this opt-out and 
     Indiana's ban on Internet gambling remains in effect, the 
     opt-out provision of H.R. 2046 will likely be challenged 
     before the World Trade Organization (``WTO'') as a violation 
     of U.S. trade agreements. In recent years, the WTO has ruled 
     against the U.S. in disputes pertaining to free trade in 
     gambling services. Accordingly, if the WTO strikes down the 
     state opt-out provision as unduly restrictive of trade, then 
     it is likely that we will see a significant expansion of 
     legalized gambling in the U.S. and the preemption of state 
     laws prohibiting or restricting Internet gambling.
       I ask that you reject H.R. 2046 and any other proposals 
     that would undermine Indiana's ban on Internet gambling.
           Sincerely,
                                         Mitchell E. Daniels, Jr.,
     Governor, State of Indiana.

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