House Crime Subcommittee Approves Net Gambling Prohibtion Act

(November 4, 1999) The House Crime Subcommittee approved the Internet Gambling Prohibition Act by a vote of 5 to 3 on November 3. The bill would ban some, but not all, forms of gambling businesses on the Internet, and other networks.

HR 3125 IH, the Internet Gambling Prohibition Act, was introduced by Rep. Bob Goodlatte (R-VA) on October 21. It is based in large part on S 692 RS, a bill sponsored by Sen. Jon Kyl (R-AZ) which was approved by the Senate Judiciary Committee in June.

HR 3125 would prohibit only gambling businesses (not the gamblers), provide many exceptions to coverage (such as state lotteries and fantasy sports leagues), and provide certain immunities to interactive computer services (such as AOL) which act merely as hosts or conduits for gambling activity.

Basically, the bill would permit gambling activity on the Internet if it is currently legal under state law off line. The main impact of the bill would be to ban Internet gambling casinos.

"There are currently over 100 sites on the Internet, offering everything from sports betting to blackjack," said Rep. Bill McCollum (R-FL), the Chairman of the House Crime Subcommittee. "Most of these virtual casinos are organized and operated from tropical off-shore locations, where the operators feel free from both State and federal interference."

Rep. Bob Goodlatte Sponsor of HR 3125

"Anti-gambling activists also fear that cybergambling will create a new generation of gambling addicts - computer savvy youths able to bankrupt themselves and their families from the comfort of their own homes," Rep. McCollum said in his opening statement. "State attorneys general have been frustrated in their attempts to prevent Internet gambling from permeating their borders."

The subcommittee approved the bill, without amendment, on a roll call vote of 5 to 3. Five Republicans voted yes (McCollum, Lamar Smith, George Gekas, Charles Canady, and Asa Hutchinson). Three Democrats voted no (Robert Scott, Marty Meehan, and Steven Rothman).

The three members who voted no did not precisely explain their opposition. However, Rep. Robert Scott (D-VA) did offer an amendment, which he later withdrew, which would have extended the scope of the bill to cover gamblers as well as gambling businesses.

Rep. McCollum argued that "gambling by residents of a state is traditionally the state's concern." Rep. Scott responded that "if state laws were effectively enforced, we would not need this." However, Rep. Scott did not expressly state that the absence of language banning gambling by individuals was his reason for voting against the bill.

Rep. Marty Meehan (D-MA) did not state why he voted no either. However, during discussion of the bill he raised two points. First, he pointed that some forms of Internet gambling businesses, such as horse racing, were exempted, while others were not. Second, he said the Congress "needs to address the issue of Indian gambling."

Rep. Steven Rothman (D-NJ), who also voted against the bill, said, "I have some concerns about some elements of this bill." He added that he wanted to address them before the full committee markup, but not at the subcommittee markup.

While the bill was not amended at the markup, members agreed to revise it before full committee markup. Members agreed to add a definition of the term "fantasy sports league."

These are exempted from the ban contained in the bill. However, the term is not defined in the bill. "That is just like the barn door," stated Rep. Charles Canady (R-FL). "Unless we nail it down" every gambling business will claim to be one. Rep. McCollum concurred.

Rep. McCollum also stated that fantasy sports leagues do not involve wagering. This promoted Rep. Canady to question why they needed an exemption. Rep. McCollum responded that they offer prizes.

The members of the subcommittee who were present for the meeting were McCollum, Scott, Gekas, Hutchison, Canady, Rothman, Smith, and Meehan. In addition, Rep. Bob Goodlatte (R-VA), who is a member of the Judiciary Committee, but not its Crime Subcommittee, was present, and sitting in the audience.