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Analysis of House Vote on the Internet Gambling Prohibition Act

(July 23, 2000) When the House rejected the Internet Gambling Prohibition Act on July 17, a higher proportion of Republicans than Democrats voted for the bill. However, the vote did not break down along party or ideological lines. Also, members who are normally supportive of high tech split on this vote. In contrast, a Representative's state or region was a good predictor of how that member voted.

News Analysis

Members from states with legal gambling operations not affected by HR 3125, such as Nevada, New Jersey and Florida, voted for the bill. Members from the deep South, where few states rely on state run lotteries, also voted for the bill. Members from tech laden California, and states more dependent on revenues from lotteries, tended to oppose the bill.

Related Pages
Summary: Bills Pertaining to Internet Gambling.
Story: House Rejects Internet Gambling Prohibition Act. 7/18/00.
Bill: HR 3125, as voted on 7/17/00.

Unlike many contested bills, the vote did not break down strictly along either partisan or ideological lines. However, Republicans were more likely to vote for the bill. 165 voted in favor, and 44 voted against. Conversely, Democrats tended to vote against the bill. 79 voted yes, while 114 voted no.

Some of the more conservative members of the House, such as Reps. Dick Armey (R-TX) and Ernest Istook (R-FL), voted for the bill. But then, so did some of the more liberal members, such as Reps. Jerrold Nadler (D-NY), and Robert Wexler (D-FL). Similarly, many other staunch conservatives, such as Reps. Bill Archer (R-TX) and Chris Cox (R-CA), voted against the bill, along with their liberal counterparts, such as Reps. Zoe Lofgren (D-CA) and Earl Blumenauer (D-OR).

Vote on HR 3125
Internet Gambling Prohibition Act
July 17, 2000

  Yeas Nays NV
Republicans 165 44 12
Democrats 79 114 18
Independents 1 1  
TOTAL 245 159 30
Vote Breakdown in Select States
New Jersey 11 2 0
Nevada 2 0 0
Florida 19 2 2
South (AL, AR,
73 18 4
California 18 30 4
Michigan 4 11 1
Massachusetts 0 9 1

Many representatives have built up a record of solid support for legislation important to high tech industry. However, this group split on this bill. Some perceived Internet gambling as a threat, not only to the individuals who loose money, but also to the integrity of the Internet. Conversely, others perceived the provisions of the bill which require ISPs to comply with orders to block access to illegal gambling web sites to be burdensome regulation of the Internet.

For example, Rep. Bob Goodlatte (R-VA) is the sponsor of the bill, and Rep. Rick Boucher (D-VA) is a cosponsor. They are also Co-Chairs of the House Internet Caucus. Other pro tech Representatives who voted for the bill included Jim Moran (D-VA), from northern Virginia, Cal Dooley (D-CA), and Billy Tauzin (R-LA).

On the other hand, Silicon Valley's Zoe Lofgren (D-CA) and Anna Eshoo (D-CA) both voted against the bill. So did Chris Cox (D-CA), perennial sponsor of bills to ban Internet taxes, and Earl Blumenauer (D-OR), a leading e-rate proponent. Others who voted against the bill included Jim Davis (R-VA), from northern Virginia, and David Dreier (R-CA).

Several regional factors were better predictors of how members voted. To understand these, one needs to examine what is prohibited by the bill, and which geographically based interests received exemptions, and which did not.

The bill provides that "it shall be unlawful for a person engaged in a gambling business knowingly to use the Internet or any other interactive computer service (A) to place, receive, or otherwise make a bet or wager; or (B) to send, receive, or invite information assisting in the placing of a bet or wager."

The bill would not affect non Internet gambling operations that are currently legal under the laws of the states in which they are located. The casino and hotel based gambling businesses based in Las Vegas and Atlantic City not only are not affected by the bill, but the bill eliminates a source of competition (online casinos). Businesses and workers in Nevada and New Jersey are dependent upon these brick and mortar casinos, and the associated hotel and entertainment businesses. These states also derive significant tax revenues from these operations.

Excerpts from HR 3125
as voted on by the House on July 17, 2000
The term `closed-loop subscriber-based service' means any information service or system that uses--

   (A) a device or combination of devices--

      (i) expressly authorized and operated in accordance with the laws of a State, exclusively for placing, receiving, or otherwise making a bet or wager ... and

      (ii) by which an individual located within any State must subscribe and be registered with the provider of the wagering service by name, address, age, and appropriate billing information to be authorized to place, receive, or otherwise make a bet or wager, and must be physically located within that State in order to be authorized to do so;

   (B) a secure and effective customer verification and age verification system, updated to remain current with evolving technology, expressly authorized and operated in accordance with the laws of the State in which it is located, to ensure that all applicable Federal and State legal and regulatory requirements for lawful gambling are met; and

   (C) appropriate data security standards to prevent unauthorized access by any person who has not subscribed or who is a minor.

... the prohibition in this section does not apply to--

   (A) any otherwise lawful bet or wager that is placed and received, or otherwise made wholly intrastate for a State lottery, or for a multi-State lottery operated jointly between 2 or more States in conjunction with State lotteries if--

      (i) each such lottery is expressly authorized, and licensed or regulated, under applicable State law;

      (ii) the bet or wager is placed on an interactive computer service that uses a private network or a closed-loop subscriber based service regulated and operated by the State lottery or its expressly designated agent for such activity;

      (iii) each person placing or otherwise making that bet or wager is physically located when such bet or wager is placed at a facility that is open to the general public; and ...

   (B) any otherwise lawful State-regulated parimutuel wagering activities on live horse or dog racing, or live jai alai, conducted on a closed-loop subscriber-based system, provided that the type of wagering activity has been authorized by the State.

Consequently, the New Jersey delegation voted 11 to 2 in favor of the bill, while both of Nevada's representatives voted yes.

The bill also provides exemptions for "any otherwise lawful State-regulated parimutuel wagering activities on live horse or dog racing, or live jai alai, conducted on a closed-loop subscriber-based system, provided that the type of wagering activity has been authorized by the State." These exemptions are for services that are restricted to individuals within a state wherein the activity is legal under state law. But, ascertaining a person's location over the Internet is difficult.

These exemptions protect gambling interests in Florida. Consequently, the Florida delegation voted 19 to 2 (2 others missed the vote) in favor.

A primary source of opposition to the bill was the huge California delegation. 18 voted yes, 30 voted no, and 4 missed the vote. The opposition came from both ends of the state.

Also, many northern state delegations opposed the bill, by varying margins. Massachusetts voted 0 in favor and 9 against (with 1 not voting). Michigan voted 4 yes and 11 no (with one not voting).

In contrast, the bill was wildly popular with Southern legislators of both parties.

Louisiana voted 6 to 1; Mississippi voted 4 to 1; Alabama voted 6 to 1; Georgia voted 7 to 4; South Carolina voted 4 to 2; North Carolina voted 10 to 2; and Virginia voted 9 to 2. The already mentioned Florida voted 19 to 2 (2 did not vote). Most of the few no votes in the South came from black Democrats.

The difference between the South and the rest of the country is perhaps attributable in part to difference in regional cultural attitudes towards gambling.

However, it may also be attributable to the use of state lotteries. Most southern states do not have state run lotteries. (Arkansas, Tennessee, North Carolina, South Carolina, Alabama, and Mississippi do not have state lotteries.). In contrast, almost all of the states outside of the South have state lotteries. (Alaska, Nevada, Utah, Wyoming, North Dakota, and Oklahoma have no lottery.) See, NASPL web site.

The bill does allow Internet based state lotteries, but only when the gambler places bets "at a facility that is open to the general public". Hence, under the bill, one could not buy lottery tickets over the Internet from one's home or office computer. This is where most people use the Internet. The closed loop subscriber based services for horse racing, dog racing, and jai alai gambling are not subject to this same restriction.

Thirty Representatives did not vote. The vote was held on Monday, when some Representatives had not yet returned to Washington from their districts. 


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