Story

House Considers Internet Gambling

Special Report - November 3, 2011
The U.S. House of Representative’s Energy and Commerce Committee recently held a hearing to “examine the status of internet gaming in the United States and to consider how consumers and other stakeholders would be affected if current legal restrictions were eased.” The October 25 hearing, which was entitled "Internet Gaming: Is there a Safe Bet?", included testimony from various groups on both sides of the Internet gambling issue, including The Poker Players Alliance, the National Indian Gaming Association, Fair Play USA, the National Council on Problem Gambling, The Annenburg Public Policy Center, and Chapman University School of Law.

In 2006, Congress passed an outright ban on interstate Internet gambling with the Unlawful Internet Gambling Enforcement Act (UIGEA), which expanded the federal Interstate Wire Act of 1961 to include new gambling technologies through the Internet. The UIGEA prevents Internet gambling companies from accepting many forms of payment, including credit cards, checks, and electronic funds transfers, and also gives law enforcement more authority to enforce the law, extending the maximum prison term for violation of the Act from two to five years. Efforts to repeal UIGEA began shortly after the law was passed in 2007.

“Proponents of repeal argue that the [UIGEA} has not reduced Internet gambling but only driven it underground and offshore, where unscrupulous entities can operate with impunity,” a Committee Memo explains. “Legalizing Internet gambling, they argue, would actually allow the government to provide greater protection for consumers than they have now. Some proponents also argue that if Internet gambling is legalized, the United States would realize significant tax revenues from online play that are currently directed to non-U.S. based gaming companies. The gaming industry estimates that Americans were wagering $16 billion a year on Internet poker sites alone by 2010.”

Keith Whyte, Executive Director of the National Council on Problem Gambling, testified at the hearing that “individuals with problem and pathological gambling, compared with other gamblers and non-gamblers, had higher rates of receipt of past-year unemployment and welfare benefits, bankruptcy, arrest, incarceration, divorce, poor or fair physical health, and mental health treatment.” Mr. Whyte also noted that, “the estimated social cost to families and communities from problem gambling-related bankruptcy, divorce, crime and job loss was almost $7 billion last year.”

“Instead of holding hearings on proposals that will harm families and our nation’s economic well-being, Congress should be looking for real, long-term solutions for our economy.” Bill Brooks, President of the North Carolina Family Policy Council, said in response to the hearing. “Congress should uphold the UIGEA and keep families and consumers protected from the pervasive attempts of the gambling industry to expand their reach into the pockets of our most vulnerable citizens.”

Related resources:
Groups Object to Internet Gambling -July 22, 2010
Congress Bans Internet Gambling -October 2, 2006