[Congressional Record (Bound Edition), Volume 153 (2007), Part 27]
[Senate]
[Pages 36128-36129]
[From the U.S. Government Publishing Office, www.gpo.gov]




                           INTERNET GAMBLING

  Mr. KYL. Mr. President, I would like my colleagues to be aware of an 
important letter signed by 45 State attorneys general expressing 
``grave concerns'' about Representative Barney Frank's Internet 
Gambling Regulation and Enforcement Act, H.R. 2046.
  The State attorneys general note that the recently enacted Unlawful 
Internet Gambling Enforcement Act of 2006 has ``effectively driven many 
illicit gambling operators from the American marketplace.'' The Frank 
bill ``proposes to do the opposite, by replacing state regulations with 
a federal licensing program that would permit Internet gambling 
companies to do business with U.S. customers.'' The letter continues:

       A federal license would supersede any state enforcement 
     action, because Sec.  5387 in H.R. 2046 would grant an 
     affirmative defense against any prosecution or enforcement 
     action under any Federal or State law to any person who 
     possesses a valid license and complies with the requirements 
     of H.R. 2046. This divestment of state gambling enforcement 
     power is sweeping and unprecedented.

  One final but very important point from the letter is the impact of 
the so-called ``opt-out'' provisions. Specifically, the letter reads:

       [T]he opt-outs may prove illusory. They will likely be 
     challenged before the World Trade Organization. The World 
     Trade Organization has already shown itself to be hostile to 
     U.S. restrictions on Internet gambling. If it strikes down 
     state opt-outs as unduly restrictive of trade, the way will 
     be open to the greatest expansion of legalized gambling in 
     American history and near total preemption of State laws 
     restricting Internet gambling.

  The Frank bill is unacceptable to the State attorneys general and it 
ought to be unacceptable to Members of Congress as well. I urge my 
colleagues to oppose the Frank bill or any similar proposals that would 
create a permissive Federal licensing scheme for Internet gambling.
  I ask unanimous consent to have printed in the Record the letter from 
the National Association of Attorneys General.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                           National Association of


                                            Attorneys General,

                                Washington, DC, November 30, 2007.
     Hon. Nancy Pelosi,
     Speaker,
     House of Representatives.
     Hon. Harry Reid,
     Majority Leader,
     U.S. Senate.
     Hon. John Boehner,
     Minority Leader,
     House of Representatives.
     Hon. Mitch McConnell,
     Minority Leader, U.S. Senate.
       To the Leadership of the U.S. House of Representatives and 
     Senate:
       We, the Attorneys General of our respective States, have 
     grave concerns about H.R. 2046, the ``Internet Gambling 
     Regulation and Enforcement Act of 2007.'' We believe that the 
     bill would undermine States' traditional powers to make and 
     enforce their own gambling laws.
       On March 21, 2006, 49 NAAG members wrote to the leadership 
     of Congress:
       ``We encourage the United States Congress to help combat 
     the skirting of state gambling regulations by enacting 
     legislation which would address Internet gambling, while at 
     the same time ensuring that the authority to set overall 
     gambling regulations and policy remains where it has 
     traditionally been most effective: at the state level.''
       Congress responded by enacting the Unlawful Internet 
     Gambling Enforcement Act of 2006 (UIGEA), which has 
     effectively driven many illicit gambling operators from the 
     American 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 
     companies to do business with U.S. customers. The Department 
     of the Treasury would alone decide who would receive federal

[[Page 36129]]

     licenses and whether the licensees were complying with their 
     terms. This would represent the first time in history that 
     the federal government would be responsible for issuing 
     gambling licenses.
       A federal license would supersede any state enforcement 
     action, because Sec. 5387 in H.R. 2046 would grant an 
     affirmative defense against any prosecution or enforcement 
     action under any Federal or State law to any person who 
     possesses a valid license and complies with the requirements 
     of H.R. 2046. This divestment of state gambling enforcement 
     power is sweeping and unprecedented.
       The bill would legalize Internet gambling in each State, 
     unless the Governor clearly specifies existing state 
     restrictions barring Internet gambling in whole or in part. 
     On that basis, a State may ``opt out'' of legalization for 
     all Internet gambling or certain types of gambling. However, 
     the opt-out for types of gambling does not clearly preserve 
     the right of States to place conditions on legal types of 
     gambling. Thus, for example, if the State permits poker in 
     licensed card rooms, but only between 10 a.m. and midnight, 
     and the amount wagered cannot exceed $100 per day and the 
     participants must be 21 or older, the federal law might 
     nevertheless allow 18-year-olds in that State to wager much 
     larger amounts on poker around the clock.
       Furthermore, the opt-outs may prove illusory. They will 
     likely be challenged before the World Trade Organization. The 
     World Trade Organization has already shown itself to be 
     hostile to U.S. restrictions on Internet gambling. If it 
     strikes down state opt-outs as unduly restrictive of trade, 
     the way will be open to the greatest expansion of legalized 
     gambling in American history and near total preemption of 
     State laws restricting Internet gambling.
       H.R. 2046 effectively nationalizes America's gambling laws 
     on the Internet, ``harmonizing'' the law for the benefit of 
     foreign gambling operations that were defying our laws for 
     years, at least until UIGEA was enacted. We therefore oppose 
     this proposal, and any other proposal that hinders the right 
     of States to prohibit or regulate gambling by their 
     residents.
           Sincerely,
         John Suthers, Attorney General of Colorado; Bill 
           McCollum, Attorney General of Florida; Douglas Gansler, 
           Attorney General of Maryland; Troy King, Attorney 
           General of Alabama; Talis J. Colberg, Attorney General 
           of Alaska; Terry Goddard, Attorney General of Arizona; 
           Dustin McDaniel, Attorney General of Arkansas; Edmund 
           G. Brown, Jr., Attorney General of California; Richard 
           Blumenthal, Attorney General of Connecticut; Joseph R. 
           (Beau) Biden III, Attorney General of Delaware; Linda 
           Singer, Attorney General of District of Columbia; 
           Thurbert E. Baker, Attorney General of Georgia; Alicia 
           G. Limtiaco, Attorney General of Guam; Mark J. Bennett, 
           Attorney General of Hawaii; Lawrence Wasden, Attorney 
           General of Idaho; Lisa Madigan, Attorney General of 
           Illinois; Stephen Carter, Attorney General of Indiana ; 
           Paul Morrison, Attorney General of Kansas; Charles C. 
           Foti, Jr., Attorney General of Louisiana; G. Steven 
           Rowe, Attorney General of Maine; Lori Swanson, Attorney 
           General of Minnesota; Jim Hood, Attorney General of 
           Mississippi; Jeremiah W. (Jay) Nixon, Attorney General 
           of Missouri; Mike McGrath, Attorney General of Montana; 
           Kelly A. Ayotte, Attorney General of New Hampshire; 
           Anne Milgram, Attorney General of New Jersey; Gary 
           King, Attorney General of New Mexico; Roy Cooper, 
           Attorney General of North Carolina; Wayne Stenehjem, 
           Attorney General of North Dakota; Marc Dann, Attorney 
           General of Ohio; W.A. Drew Edmondson, Attorney General 
           of Oklahoma; Hardy Myers, Attorney General of Oregon; 
           Tom Corbett, Attorney General of Pennsylvania; Patrick 
           C. Lynch, Attorney General of Rhode Island; Henry 
           McMaster, Attorney General of South Carolina; Larry 
           Long, Attorney General of South Dakota; Robert E. 
           Cooper, Jr., Attorney General of Tennessee; Greg 
           Abbott, Attorney General of Texas; Mark Shurtleff, 
           Attorney General of Utah; William H. Sorrell, Attorney 
           General of Vermont; Robert McDonnell, Attorney General 
           of Virginia; Rob McKenna, Attorney General of 
           Washington; Darrell V. McGraw, Jr., Attorney General of 
           West Virginia; J.B. Van Hollen, Attorney General of 
           Wisconsin; Bruce A. Salzburg, Attorney General of 
           Wyoming.

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