Federal Internet Law & Policy
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Gambling, pt 2 Dont be a FOOL; The Law is Not DIY
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Another limitation of the Wire Act is that it targets gambling businesses, not the gamblers. Well, if the gambling business is in the Cayman Islands along with the gambling money, the only thing within the jurisdiction of US law might be the gambler.

Finally, the Wire Act deals with sports gambling. [Mastercard] [Final Report] So if Joe Swindler is hosting a 3 Card Monty game, the Wire Act may not touch him.

There is another angle to this. The feds normally operate at the level of the big and the bad. They go after the mob. They go after drug king pins. They go after terrorists. They do not tend to go after common every day criminals. They tried that gig during prohibition. [Sinclair] They weren't too fond of it. And since that time the feds have been reluctant to become the prosecutors of common crimes. [Gregory 1998] Expending federal resources to nail the $5 bettor is not their idea of a good time. [Rose] Then Attorney General Robert F. Kennedy referred to attempts to prosecute individual gamblers as "an impossible task." [Gregory 1998] In an environment of thousands of websites and billions of dollars in Internet gambling, there have been only a handful of federal enforcement actions against online gamblers. [Rose]

The fact that there is a degree of ambiguity or limitation to the Wire Act has led Congress to attempt to pass Internet gambling legislation in every Congressional session since 1995. The Department of Justice has repeatedly advised Congress that current anti-gambling law is sufficient though perhaps antiquated. The solution is amending current law to clarify application in all instances, and broaden application beyond mere sports gambling. DOJ opposed the creation of new separate legislation that specifically targeted Internet gambling as failing to be technologically neutral. [Leahy] Instead of creating a patchwork of laws that have different impact in different mediums - whether the gambling is done in person, over the phone, through the mail, or over the Internet, with inconsistent penalties based on the chance of which medium is chosen - DOJ recommended a unified approach with sufficient authority to cover the areas of concern. [Gregory 1998]

104th Congress

  • HR 1495 Crime Prevention Act of 1995 (Sec. 1501 – Sen Kyl)
  • H.R.3526: Computer Gambling Prevention Act of 1996 (Rep. Johnson, T.).
  • H.R. 497 / S 704 National Gambling Impact Study Commission Act Passed

105th Congress

  • HR 4427 Internet Gambling Prohibition Act of 1998 (Rep McCollum) (passed by the Senate).
  • HR 2380, S. 474 Internet Gambling Prohibition Act of 1997 (Rep. Goodlatte, Sen. Kyl) (passed by the Senate 90-10, but was not voted on in the House).

106th Congress

  • HR 3125 The Internet Gambling Prohibition Act of 1999 (Rep. Goodlatte).
  • S.692 Internet Gambling Prohibition Act of 1999 (Sen Kyl, Jon).
  • HR 4419 Internet Gambling Funding Prohibition Act (Rep Leach, James A.)
  • HR 5020 Comprehensive Internet Gambling Prohibition Act of 2000 (Rep. Conyers, John)

107th Congress

  • H.R. 3215, the "Combating Illegal Gambling Reform and Modernization Act
  • H.R.2579: Internet Gambling Payments Prohibition Act (Rep LaFalce, John J.)
  • H.R.556: Unlawful Internet Gambling Funding Prohibition Act (Rep Leach, James A.)
  • H.R.641 : National Collegiate and Amateur Athletic Protection Act of 2001 (Rep Gibbons, Jim)
  • S.718 Amateur Sports Integrity Act (Sen McCain, John)
  • There are pinch points that can be attacked. Congress can make Internet gambling debt uncollectable. It can require ISPs to take down access to known gambling sites. It can impose requirements on those credit cards that are necessary for online gambling. Congress can even make gambling laws enforceable against the individual gamblers.

    Processing Online Gambling Charges: While Congress has perhaps had difficulty responding to Internet gambling, financial institutions have taken action. As with many legal issues, there are pinch points that can be addressed in order to resolve policy concerns. In the past, to shut down an illegal gambling institution, the feds merely needed to show up with a court order and perhaps an ax. In the cyberage, the pinch point is the money. The gambling institution may be far beyond the reach of US jurisdictions, but if US gamblers' debts will not be honored, well, there is not much interest in serving them, is there!?! Many credit card companies have elected not to honor the use of their services for online gambling. Where there ain't no money, there ain't likely to be much gambling.

    Of course, where financial institutions might be inclined to process online gambling payments, the feds have reminded them that the Patriot Act makes it illegal to transmit funds derived from a criminal offense. [PayPal]

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