Opening Statement of James Doyle (Wisconsin Attorney General).
Re: Senate Subcommittee on Technology, Terrorism and Government Information Hearing on Internet Gambling.

Date: March 23, 1999.
Source: Senate Judiciary Committee.


March 23, 1999

Thank you for inviting me to speak to the subcommittee regarding the Internet Gambling Prohibition Act. I have long been a supporter of this legislation, and am eager to do all that is necessary to assure its enactment into law.

Almost three years ago, the National Association of Attorneys General took a step many of us never imagined: The organization recommended an expansion of the federal government's traditional law enforcement role. Specifically, we urged the federal government to enact legislation to prohibit gambling on the Internet. Since that initial recommendation, a lot has changed. The Internet has continued to grow faster, the technology of home computers has improved dramatically, millions of new users have begun “surfing the ‘net,” and the Internet gambling industry has grown immensely as well.

The reason the Attorneys General took this action was that state law enforcement officials recognize the limitations of traditional concepts of state jurisdiction when it comes to regulating and controlling gambling on the Internet. Although the overwhelming majority of Internet traffic occurs within the United States, the Internet is global in scope, and any single state, or even a group of states working together, can have only a limited effect in controlling the myriad of activities occurring in that medium.

Gambling laws and regulations have more state to state variation than almost any other area of law. Each state’s gambling policy is carefully crafted to meet its own moral, law enforcement, consumer protection and revenue concerns. Most states believe they have the correct combination of law and policy to address the needs of their citizens. The Internet threatens to disrupt those laws and policies. Federal action on Internet gambling is necessary in order to preserve each state’s ability to direct its own gambling policy.

The technology of the Internet simply cannot meet the needs of effective gambling regulation. Gambling laws must address a wide variety of specific issues in order to meet these policy concerns. Some of the most crucial issues include game integrity, dispute resolution, underage gambling, problem gambling, and effective means to verify the physical location of players and proprietors. Internet technology is currently unable to adequately address all of these policy considerations.

Many have argued, and undoubtedly will argue again today, that the government cannot effectively prohibit gambling on the Internet. Instead, they argue, this government should attempt to regulate that which it cannot prohibit. However, this argument turns against itself, because it is quite clear that an activity which could not be effectively prohibited is also not subject to effective regulation. The fact that Internet Gambling is difficult to control does not mean that law enforcement should bury its head in the sand and pretend the problem does not exist. Nor does that difficulty provide a reason to legalize and regulate an activity that would otherwise be overwhelmingly opposed by the majority of the U.S. population.

I have no illusions that the United States’ policy choice in this matter will not, in itself, change the behavior of every jurisdiction around the world. However, I do believe that a strong statement in favor of prohibition will raise the necessary red flags for citizens all over the world who might fall prey to unscrupulous gambling operators trolling the information highway for likely victims. In particular, U.S. citizens should be able to understand clearly that the government does not support or condone this activity. They also should know that they will not be able to turn to the government for help when they lose their money to an unknown operator on the other end of the wire, or when their financial information is used in a way that harms them.

If this government were to choose to regulate this activity, it is clear that the regulation could not be effective. There are simply too many workarounds and too much anonymity programmed into the infrastructure of today’s Internet for any regulator to be able to vouch for the security and identity of a web gambling operator. Even if game integrity and operator identity could be confirmed, there is currently no infrastructure available for customers to be assured that they are dealing with an individual operator who is covered by that regulation. This is just one small example of the difficulties gambling regulation would face on the Internet. Any “Seal of Approval” transmitted over the Internet would not be worth the paper it was printed on.

The Wire Communications Act, 18 U.S.C. 1084, is currently the only federal law which directly addresses any aspect of gambling on the Internet. The Wire Act was enacted in the early 1960’s primarily to prohibit interstate transmission of sports and race bets via the telephones and telegraph wires. The Act, however, contains major limitations which need to be addressed in the age of the Internet.

One of the most critical limitations of the Wire Act is the scope of the gambling activity covered. There is, to many, an ambiguity regarding the types of gambling covered by the Act. Because of the context of the time it was passed, some believe it is limited solely to sports and race wagering. While these may be the only types of gambling that are suitable to transmission via the telephone, the Internet makes possible the multimedia transmissions suitable for depicting all forms of casino gambling. It is a new world, and we must be certain that these new games are addressed as effectively as traditional gambling was under the Wire Act.

This Senate’s action on Senator Kyl’s bill begins a process in which the United States’ government can make a strong policy statement that gambling via the Internet is not a good bet for its citizens. I urge this subcommittee to support this bill.