Internet Gambling Prohibition and Enforcement Act

INTERNET GAMBLING PROHIBITION AND ENFORCEMENT ACT

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Mr. SCOTT of Virginia. Mr. Speaker, I thank the gentleman for yielding.

Mr. Speaker, I oppose the bill because it does not prohibit Internet gambling; it only tries to prohibit running an Internet gambling operation. But because of the nature of the Internet, it is probably unlikely to do that, and that is because even if we are successful in closing down business sites in the United States or in countries we can get to cooperate, it will be ineffective because it will have no effect on those operations run outside of the reach of the Department of Justice.

Furthermore, it does not prohibit illegal gambling, just running the operations so that gamblers will be as free as they are now to gamble over the Internet.

Further, Mr. Speaker, it provides a credit card prohibition. We heard from witnesses during our hearings that this will create an enforcement nightmare for financial institutions because it requires them to stop and look for illegal Internet gambling transactions.

It is hard to identify those transactions, because they are not going to be identified as an illegal Internet transaction. It will just be you may have a company with one code for all payments, even though the company may have many activities, including Internet gambling.

Just as Caesar's Palace has a hotel and a gaming operation, a foreign company may have a hotel and a casino and an Internet gaming operation which is legal in that country, all paid to a single account. What about e-cash or electronic payment systems, or an escrow agent located in another country? All the bank knows is that the payment came from PayPal or went to some escrow agent.

With some Internet gambling operations being legal, how would the final institution distinguish between what is legal and what is illegal? Furthermore, we should not overestimate the cooperation we might get from other countries. The Internet gambling Web sites were virtually unheard of a few years ago and now represent billion-dollar businesses and are growing at phenomenal rates.

Over 85 foreign countries allow some form of gambling online, and that number is likely to grow as well. So what governments are likely to cooperate with us in prosecuting businesses that they authorize to operate?

Even if we are successful in getting cooperation from some countries, it would simply increase the profit opportunities for sites located in uncooperative countries, especially those with whom the United States does not have normal diplomatic relations, and those sites would be unregulated with no consumer protections.

Again, we have heard these stories about the problems of Internet gambling. But this bill does not prohibit Internet gambling. It prohibits running the operation. If we wanted to be effective in prosecuting illegal gambling on the Internet, we would prosecute the individual gamblers. A few sting operations would get the word out that if you gamble on the Internet, you will be caught, because the money trail will lead back to each individual Internet gambler.

So as long as individuals can gamble over the Internet with impunity, the market will be provided for them from some place.

Mr. Speaker, this bill does not prohibit Internet gambling, just tries to prohibit running the operation in a jurisdiction within the reach of the Department of Justice, then it sets up an impossible regulatory scheme, requiring banks to figure out which of billions of transactions might be related to illegal Internet gambling.

If we want to prohibit Internet gambling, let's debate that. Meanwhile, we should defeat this bill.

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