A few things are certain at the moment. Yesterday Senate Majority Leader Bill Frist
(Republican- Tennessee) was able to attach legislation "prohibiting online gambling" to a bill that is supposed to strengthen security at America's sea ports. The port security bill passed with the online gambling amendment in tact and was then sent over to the House of Representatives. The House debated the bill and then voted to approve it shortly after midnight. It was the final action taken by the Congress before it adjourned to prepare for November's election. All that remains is for President Bush
to sign it into law, and there is no doubt that he will since this is after all a port security bill.
All of the above is certain. I am today investigating the matter and talking to a lot of friends around the industry to determine what it all means. Here are a few things I feel sure of but have yet to verify:
The legislation that Frist attached is not the same as HR 4411, the bill that passed out of the House in July. You may recall that HR 4411 was actually the synthesis of two bills which sought to prohibit online gambling. Rep. Bob Goodlatte (Republican- Virginia)'s bill sought to update the Wire Act to clearly specify that all forms of gambling via communication devices are illegal, while Rep. Jim Leach (Republican- Iowa)'s bill sought to prohibit payment to online gambling companies. Early reports indicate that Frist attached the Leach provisions to the port security bill but did not attach the Goodlatte provisions.
So technically what the bill says is that it is illegal for an Internet gambling business to accept payment from a customer in the U.S. Most lawyers that I have talked say this is not going to be enforceable. First of all, these businesses are already located offshore. As has been the case in the last ten years they remain outside the jurisdiction of U.S. authorities. It all really reminds me of the CAN-SPAM act of 2003, which was supposed to eliminate spam. You've received a lot less spam since then haven't you?] (*,)
In order to enforce this law, U.S. banks are supposed to become policing agents. They are supposed to begin monitoring every single transaction you make, and if your purchase is for a gambling service then they are suposed to deny it. The banking industry is not pleased with this. The bill will put a nearly impossible burden on the banks and drain resources that ought to be directed at combating terrorism. One severe problem is companies like Neteller deal with other merchants besides online gambling companies, so the banks probably won't be able to block money going to Neteller, and once the money is there they should be powerless to prohibit it from going to a gambling company since Neteller is based offshore and out of jurisdiction. Another problem is that in ACH transactions (my preferred method of gambling payment), the payee is not known, but the Leach bill requires banks to police not only who is being paid but for what sort of product or service.
Both the Independent Community Bankers of America and the U.S. Chamber of Commerce wrote letters to the Senate in August warning that the Leach bill should be amended because it puts impossible enforcement burdens on an already overwhelmed banking industry. There is no language in the Leach bill (at least the last time I saw it) that pertains to advertising. However, it seems plausible to me that the bill would strengthen aiding and abetting charges if the Department of Justice
wanted to try that route of attack again. I don't know how this would play out. I don't think portal webmasters would be in the DOJ's scope for a while. Major media companies would be first, and hopefully one of them would muster a fight; after all, they actually advertise for .net educational sites. I believe the typical model for censoring portal sites is that the DOJ would have to first issue a cease and desist order and then give a 90-day period before actually issuing charges.
I am no lawyer or political expert, but I am pretty confident that there is no need to worry yet. The bill probably will not be effective and portal webmasters won't be in its scope for a long time. But then again, we are dealing with an executive office that has done much to erode the Constitution and the governmental checks and balances system in the last four years.
There are a few things that sicken and disturb me about all this. The Senate didn't even debate the online gambling bill; it was attached in the dark of night to a separate bill that could not fail. Is that really how we do things in the land of the free? It doesn't seem very reasonable to rush sensitive matters. Also, this was part of the Republican agenda
, and it was probably only rushed so haphazardly so that the Republicans can appeal to their conservative and religious voters.
But the thing that disturbs me most is not even the implications for online gambling but for personal liberties. What the bill asks the banking industry to do is heinous on an Orwellian sort of level. This is a dangerous slippery slope whereby the government can monitor and prohibit every single sort of product and service you buy and from whom. But I suppose we must be protected from ourselves. And the terrorists.
Remember, this is part of the Republican agenda and elections are in November.
U.S. Congresses Passes I-gaming Prohibition
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