[Congressional Record (Bound Edition), Volume 147 (2001), Part 10]
[Extensions of Remarks]
[Pages 14069-14070]
[From the U.S. Government Publishing Office, www.gpo.gov]



             GAMBLING ATM AND CREDIT/DEBIT CARD REFORM ACT

                                 ______
                                 

                          HON. JOHN J. LaFALCE

                              of new york

                    in the house of representatives

                        Thursday, July 19, 2001

  Mr. LaFALCE. Mr. Speaker, two years ago the National Gambling Impact 
Study Commission released the final report from its three-year study of 
gambling in the United States. The Commission took on one of the most 
difficult and divisive issues in America today and produced an 
extremely thoughtful report with more than 70 recommendations for 
changes in gambling policy. Unfortunately, none of the Commission's 
recommendations requiring federal legislation have yet been enacted by 
Congress.
  I am today reintroducing legislation to implement one of the more 
important recommendations of the National Gambling Impact Study 
Commission to help lessen the potential financial losses of compulsive 
gambling for individuals and families. My legislation, the ``Gambling 
ATM and Credit/Debit Card Reform Act'', amends federal law to reduce 
the ready availability of cash and credit for gambling by removing 
credit card terminals, debit card point-of-sale machines, automated 
transfer machines (ATMS) and other electronic cash dispensing devices 
from the immediate area of gambling activities.
  A major finding of the Commission is that America has been 
transformed during the past 20 years from a nation in which legalized 
gambling was localized and limited to one in which it is almost 
omnipresent and a major economic and entertainment activity. Some form 
of legalized gambling is now permitted in 47 states and the District of 
Columbia. Thirty-seven states officially sponsor gambling through state 
lotteries. Americans now spend an estimated $650 billion a year on 
legalized gambling--more than they spend on movies, records, theme 
parks, professional sports and all other forms of entertainment 
combined.
  The Commission also found that while legalized gambling can produce 
positive economic benefits for the communities in which it is 
introduced, it also produces significant negative consequences for 
millions of individuals and families--consequences such as bankruptcy, 
crime, divorce, abuse and even suicide. A specific concern of the 
Commission has been the dramatic increase in problem and pathological 
gambling. Studies suggest that more than 5 million Americans are 
pathological or problem gamblers, and that another 15 million have been 
identified as ``at-risk'' or compulsive gamblers. The rapid growth of 
compulsive gambling has been particularly noticeable among women and 
includes growing numbers of teenagers.
  The Commission identified the ready availability of cash and credit 
in and around gambling establishments as a major factor contributing to 
irresponsible gambling and to problem and pathological gambling 
behavior. Between forty and sixty percent of all money wagered by 
individuals in casinos, for example, is not physically brought into 
gambling facilities but is obtained by gamblers after their arrival. 
Much of this money derives from credit markers extended by casinos, but 
a sizable and growing portion involves cash derived from ATM and debit 
cards and cash advances on credit cards.
  Credit cards, debit cards and ATMs have long been used within 
gambling resort hotels and near other gambling facilities. But their 
availability and use on gambling floors for purposes of making bets or 
purchasing playing chips was generally prohibited. This changed in 1996 
when the New Jersey Casino Control Commission approved the use of 
credit card point-of-sale machines at gambling tables for direct 
purchases of playing chips and slot tokens. The action was immediately 
recognized by gambling experts as one of the ``most potentially 
dramatic changes'' in gambling in decades that would result in more 
impulse gambling by consumers and higher revenues for casinos. Since 
then, ATM machines have been moved from outside casinos and other 
gambling establishments to locations near

[[Page 14070]]

gambling floors. Credit and debit card point-of-sale terminals have 
been installed directly at gambling tables.
  Allowing gamblers to use credit or debit/ATM cards directly for 
gambling removes one of the last remaining checks on compulsive or 
problem gambling--the need to walk away to find more cash to gamble. 
This separation helps break the excitement of the moment and permits 
many gamblers to walk away. Providing immediate electronic cash 
transfers not only feeds compulsive behavior, but makes it easier for 
problem gamblers to bet all their available cash, draw down their bank 
accounts, and then tap into the available credit lines of their credit 
cards as well. Financial institutions become unwitting accomplices in 
encouraging gamblers to bet more money than they intended and more than 
most can afford.
  My legislation addresses this problem in a number of ways. It amends 
the Truth in Lending Act (TILA) to prohibit gambling establishments 
from placing credit card terminals, or accepting credit cards for 
payment or cash advances, in the immediate area where any form of 
gambling is conducted. It also amends the Electronic Funds Transfer Act 
(EFTA) to impose a similar prohibition on the placing of any automated 
teller machine, point-of-sale terminal or other electronic cash 
dispensing device in the immediate area where gambling occurs. Contrary 
to statements by the gambling industry, this will not deny people use 
of the credit, debit and ATM cards, only move access terminals for 
these cards a short distance away from gaming tables or machines.
  The bill directs the Federal Reserve Board to publish and enforce 
rules for assuring that all electronic transfers of cash and credit are 
physically segregated to the extent possible from all gambling areas. 
And it provides for comparable civil liability as provided elsewhere in 
TILA and EFTA to permit individuals to file private actions against 
gambling establishments that violate these restrictions.
  Mr. Speaker, the National Commission study confirmed that legalized 
gambling has become a national phenomenon. While it is unreasonable to 
think we can put the gambling genie back in the bottle, we can take 
reasonable measures to help minimize the potential financial strain and 
anguish for American families. My legislation does not prohibit 
casinos, racetracks and other gambling facilities from providing or 
using credit card, ATM and debit card devices. It merely requires that 
these devices be used for the purposes they were intended and not to 
encourage irresponsible or problem gambling.
  I believe this is reasonable and worthwhile legislation. I urge its 
adoption by the Congress.

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