Wednesday, July 12, 2006

House easily approves Internet gambling ban

House easily approves Internet gambling ban
By Peter Kaplan

WASHINGTON (Reuters) - The U.S. House on Tuesday approved a Republican-written bill to crack down on Internet gambling, in what critics said was an election-year appeal to the party's conservative base.

The House voted 317-93 to impose a ban on most forms of Internet gambling by making it illegal for banks and credit card companies to make payments to online gambling sites. Internet gambling generates some $12 billion annually worldwide, half from American gamblers.

The bill exempted horse racing and lotteries from the ban.

"This is a scourge on our society. It causes innumerable problems," Republican Bob Goodlatte of Virginia, one of the bill's sponsors, said on the House floor before the vote.

The House bill, which was also sponsored by Jim Leach of Iowa, is part of the Republican party's emphasis on moral values as congressional elections approach this fall.

It won support from majorities of both Republicans and Democrats.

Supporters cited examples of college students and other young people whose lives were ruined after they became addicted to Internet gambling. In one case, they said, a man robbed a bank to try to recover his losses.

Opponents, meanwhile, criticized the bill as a politically motivated bid to stir up social conservatives and boost Republican prospects in the November elections.

"It's politics, plain and simple," said Michael Bolcerek, president of the 30,000-member Poker Players Alliance, which is willing to support some regulation of online poker games, but opposes an outright ban.

Prospects for similar legislation in the Senate remained unclear with few work days left before the November elections. Arizona Republican Sen. Jon Kyl was said to be seeking a bill to which he could attach anti-gambling language.

Kyl issued a statement after the House vote on Tuesday saying he would "explore all ways to move this much-needed legislation through the Senate this year."


The bill was propelled by broad support among conservative and religious activist groups, which want to keep gambling out of easy reach of minors. To win more backing among lawmakers, the bill specifically exempted horse racing and lotteries and watered down enforcement provisions for banks that fail to block credit card payments, according to congressional aides.

An estimated 2,300 gambling sites exist on the Internet.

Investors in some British-based gaming companies, such as Partygaming Plc and 888 Holdings Plc have closely monitored U.S. legislation. In Tuesday trading on the London Stock Exchange, 888 Holdings was up about 0.6 percent while Partygaming was slightly lower.

The ban would have little effect on companies that offer Internet gambling, said Frank Catania, a consultant who opposed the bill and advises gambling companies on regulatory issues.

"This will not stop Internet gambling at all," he said.

A spokesman for Leach, Greg Wierzynski, denied suggestions the move was politically-motivated. He noted Leach has been pushing Congress to take up the issue for many years.

"It's not an effort to assuage or pander to a specific interest group," Wierzynski said.

Democrat Barney Frank of Massachusetts said he thought the bill was "outrageous."

"If people want to do something, and it doesn't hurt anybody else, we ought to mind our own business," Frank said on Monday. "This is a bill to tell adults not to do something because people in this body disapprove of what they do."