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Internet Gambling Gets Hit by House

As reported yesterday on GOM, the House was going to vote on a bill that would make it illegal for people to use credit cards, wire transfers and all other payment forms to pay for online wagering. And today, with bipartisan support led by Jack Abramoff, a Republican lobbyist who pled guilty in January to felony counts of defrauding American Indian tribes and corruption of public officials, the House approved the bill by a staggering 317 to 93.

It’s not exactly doomsday for online gaming yet. But if it gets the majority vote in the Senate, banks or any financial intermediaries couldn’t process payments to offshore without breaking the law. Strengthening the bill is an update of the Wire Act of 1961, which forbade betting transmissions over telephone lines, to outlaw online gambling via any communication network. Criminal penalties would increase from a maximum of two to five years in jail.

Both sides of the debate cited the $12 billion online wagering business as either a boon or bane. Yet with the combined strength of the Bush administration, major sports leagues, banks, law enforcement, family values advocates and religious groups, the bill skated through. The likelihood of it passing the Senate this year, however, is remote, given a mountainous work schedule and this being an election year.

Opponents were also quick to point out inherent contradictions of the bill, citing its flexibility with lotteries and dog and horse racing. They also criticized the audaciousness to regulate cyberspace, with its blurred state and international lines.

Nevada Democrats Senator Harry Reid, the minority leader and a former Nevada gaming commissioner, and Representative Shelley Berkley voiced their concerns about the ability to regulate internet gambling.

“There is nothing in this bill that will shut down these offshore companies who operate legally in other countries,” Berkley said. “The very nature of a free World Wide Web will continue to make online gambling available.”
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