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H.R. 2046 Overrides Broad Range Of Laws

Floor Speech

Location: Washington, DC

H.R. 2046 OVERRIDES BROAD RANGE OF LAWS -- (Extensions of Remarks - August 04, 2007)

* Mr. PITTS. Madam Speaker, I received a letter today from a bipartisan coalition of family and faith-based organizations, who are concerned that powerful international gambling interests will succeed in negating U.S. laws that curb Internet gambling. I ask unanimous consent to place a copy of this letter in the Record.

* Probably the most serious avenue of attack mentioned in this letter is H.R. 2046, which would legalize Internet gambling and provide online casinos with exemptions from federal and state laws.

* Just one year ago, this body voted 317 to 93 in favor of the Unlawful Internet Gambling Enforcement Act of 2006, which went on to be signed into law on October 13, 2006. By enacting UIGEA, we emphatically decided that we would not simply roll over as offshore gambling operators deliberately defied our laws. We would enforce our laws, even when the websites are offshore, by cutting off the flow of money for illegal Internet gambling activities. At the same time, we preserved existing Federal and State gambling laws, including the rights of States to set gambling policy and regulate any gambling operators within their own borders.

* H.R. 2046 does not repeal UIGEA per se, but that would be its practical effect. The license this legislation would grant to Internet gambling operators serves as an affirmative defense to any prosecution or enforcement action under any other Federal or State law. It brushes aside Federal gambling laws such as the Wire Act, State gambling prohibitions, and State gambling regulatory commissions.

* The proponents of H.R. 2046 say there is an opt-out for States, but this opt-out is riddled with problems. First, State laws already on the books don't matter--the governor has to certify exactly what is prohibited in that State, and if he or she fails to make that certification within 90 days, then the State becomes open game for Internet gamblers. Not only is it bad policy to ignore laws on the books, it is probably unconstitutional to give the Governor effective unilateral power to set Internet gambling policy for the State.

* Second, if the State were to allow any form of gambling online, it would be regulated by the Treasury Department, which has no experience in gambling regulation, instead of the highly-experienced State gambling commission.

* Third, the State opt-out would violate current U.S. trade obligations, so the World Trade Organization could tell the U.S. to drop the opt-out or face stiff trade penalties. The U.S. is currently trying to withdraw its ``obligation'' to free trade in gambling--which the U.S. never intended to make--but the process could take months or years. Until then, the offshore gambling industry could attack the State opt-out in H.R. 2046 in the WTO, as one of their attorneys publicly stated at a Cato Institute forum just last week.

* Finally, keep in mind that NO State has yet legalized Internet gambling with foreign companies. If all the States opt out according to the laws they already have on the books, and if the opt-outs are not challenged legally, what will the international gambling interests have gained? If nothing, then why are they spending millions on lobbying efforts to pass H.R. 2046?

* I hope that my colleagues will look past the smokescreen and see that H.R. 2046 could result in the greatest expansion of gambling ever enacted by Congress.

August 1, 2007.

DEAR MEMBER OF CONGRESS: As a bipartisan coalition of family and faith-based organizations representing millions of citizens nationwide, we thank you for your efforts to protect families from the dangers of Internet gambling. Last year, Congress took the very valuable step of enacting the Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA) so that U.S. gambling laws could be better enforced on the Internet. We are concerned, however, about ensuring the integrity of UIGEA in upcoming months. We have three primary concerns:

Congressional support for strong UIGEA regulations from the Treasury Department, add list of illegal Internet gambling to FinCEN and OFAC lists, block transactions, create a system for reporting illegal sites to the DOJ (Internet, phone, mail), enforce prosecution of illegal online gambling operations.

Your support of UIGEA's integrity and your opposition to contrary legislation.

Congressional support for U.S. withdrawal from WTO obligations that jeopardize UIGEA.

Internet gambling represents the most invasive and addictive form of gambling in history. Speed, accessibility, availability and anonymity make Internet gambling the perfect storm for gambling addiction. Internet gambling also creates fertile ground for criminal activity and threatens homeland security by potentially funding terrorist activity.

More than 230 million Americans access the Internet, many of whom are children and adolescents. Internet gambling extends beyond state borders, beyond democratically enacted laws and is piped directly into millions of homes. Before Congress passed UIGEA, nearly 3,000 online casinos could be accessed instantly with the click of a mouse.

Since its passage, UIGEA has severely cut unlawful U.S. profits to foreign gambling interests. Now these Internet casino operations are willing to spend millions of dollars influencing Congress to gain legal access into U.S. homes. In fact, the UC Group (a leading payment-service provider in the U.K.) claims to be "leading the initiative'' behind Rep. Barney Frank's bill, H.R. 2046. The misinformation campaign is in full swing, and Congress is the target. You should be aware of several bills that threaten the integrity of UIGEA:

Rep. Frank's bill H.R. 2046--far-reaching legalization of Internet gambling, providing online casinos with exemptions from federal and state laws.

Rep. Wexler's bill H.R. 2610--exempts poker and "games of skill'' from UIGEA.

Rep. McDermott's bill H.R. 2607--licenses and taxes Internet casinos.

Foreign gambling interests are also pressuring the World Trade Organization (WTO) to force the U.S. to legalize Internet gambling. They claim that the U.S. is obligated to legalize gambling because it committed to free trade in "recreational services,'' and a WTO panel agreed. Now the U.S. is seeking to amend its trade commitments to make clear that Congress never intended to turn over to the WTO its right to set gambling policy. Congress should return the favor to the U.S. Trade Representative by supporting these negotiations.

Again, thank you for your time and service in preserving families. We hope for your ongoing support of the Unlawful Internet Gambling Enforcement Act in the upcoming months.


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