Senate Approves Internet Gambling Prohibition Act

(July 23, 1998)  The Senate adopted as an amendment to a key appropriations bill the Internet Gambling Prohibition Act. The vote was 90 to 10.

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Sen. Jon Kyl

The bill, S 474, is sponsored by Sen. Jon Kyl (R-AZ). Sen. Kyl is Chairman of the Senate Judiciary Committee's Subcommittee on Technology, Terrorism, and Government Information.

“More than a billion dollars will be gambled over the Internet this year,” said Kyl.  “Internet gambling is unregulated, accessible by minors, addictive, subject to abuse for fraudulent purposes like money laundering, evasive of state gambling laws -- and already illegal at the federal level in many cases.”

“Our bill is supported by a broad bipartisan coalition,” said Kyl, “including state, local, and federal law enforcement, amateur and professional sports organizations, pro-family groups, consumer protection groups and anti-gambling groups. From the Christian Coalition to Ralph Nader’s Public Citizen, from the FBI’s Louis Freeh to the attorneys general of all fifty states, supporters recognize the need to keep gambling off the Internet.”

The bill was attached as an amendment to the Commerce, State and Justice Appropriations bill.  The Senate rejected by 82 to18, an amendment by Sen. Larry Craig, (R-ID), that would have excepted Indian tribes.

The companion bill in the House, HR 2380, sponsored by Rep. Bob Goodlatte (R-VA), has not been passed. The only formal action taken on the House bill was a hearing by the Judiciary Committee's Subcommittee on Crime on February 4.

Sen. Bob Kerrey (D-NE) spoke in favor of the bill, but cautioned about over-regulating the Internet.

I join with my colleague in opposing unrestricted gambling on the Internet, and I support the adoption of his amendment. However, there are often a variety of reasonable approaches to a problem, and we should be careful not to over-legislate. This is true especially with respect to a vital new medium like the Internet which promises to be an engine of growth for our economy and a source of unprecedented benefits to our citizens for years to come. We need to think carefully before government commandeers the electronic network, through online service providers, in the pursuit of conduct we don't like.

Sen. Kerrey, in particular, was concerned about the bill's provision that requires Internet Service Providers to cut off gambling sites.

"While I do not object to asking service providers to cooperate in ways that do not involve significant expense or retard the growth and flow of Internet traffic, I am not convinced that the provisions of the current proposal strike the proper balance. In addition, there is a high risk that we may inadvertently sap the vitality of the Internet if we start to require service providers to serve as an arm of our law enforcement agencies. It is my hope that we can address these concerns as we go to conference with the House."

The bill would prohibit both gambling by individuals, and gambling businesses, although penalties would be much stiffer for persons engaging in a gambling business.

Some gambling businesses are located in other countries, and are beyond the reach of U.S. laws.

Excerpts from Internet Gambling Prohibition Act

"It shall be unlawful for a person to place, receive, or otherwise make a bet or wager, via the Internet or any other interactive computer service in any State.
"A person who willfully violates paragraph (1) shall be ... fined in an amount that is not more than the greater of ... (A) the amount that the person is found to have wagered via the Internet; or $2,500; (B) imprisoned not more than 6 months; or (C) both."
"It shall be unlawful for a person engaged in the business of betting or wagering to engage in that business through the Internet or through any other interactive computer service in any State."
"A person engaged in the business of betting or wagering who violates paragraph (1) shall be ... (A) fined in an amount that is not more than the greater of ... (i) the amount that such person is found to have received in bets or wagers as a result of engaging in that business in violation of this subsection; or (ii) $20,000; (B) imprisoned not more than 4 years; or (C) both."