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 Rep.
Bachus Offers
Misinformation in
His Support of Ban
on Internet Gambling
(Washington, D.C. –
June 25, 2008) – The
American Banker
published an
editorial yesterday,
“Viewpoint: Blocking
Web Gambling Rules
Would Be Mistake,”
by Rep. Spencer
Bachus (R-Ala.) that
uses incorrect
information to argue
for the continued
prohibition of
Internet gambling.
Rep. Bachus’ opinion
piece comes as the
House Committee on
Financial Services
is scheduled to vote
today on a bill, the
Payments System
Protection Act (H.R.
5767), that would
prohibit the
Department of the
Treasury and Federal
Reserve System from
proposing,
prescribing or
implementing any
regulations related
to the current ban
on Internet
gambling, as
required by the
Unlawful Internet
Gambling Enforcement
Act of 2006 (UIGEA).
“It is unfortunate
that Rep. Bachus is
using scare tactics
to argue for the
continued
prohibition of
Internet gambling,”
said Jeffrey
Sandman, spokesman
for the Safe and
Secure Internet
Gambling Initiative.
“The reality is that
regulated Internet
gambling, which is
clearly working in
the U.K. and other
parts of the world,
can utilize
technology to offer
strong consumer
protections to
combat underage and
compulsive gambling
in the U.S.
Currently,
prohibition leaves
millions of
Americans
susceptible as they
continue to gamble
in an underground,
uncontrolled
marketplace without
such guaranteed
protections.”
UIGEA Has Not Lead
to a Decrease in
Internet Gambling
Statement: “Since
the law was passed,
gamblers and
businesses engaged
in Internet gambling
have been deterred
by the fear it would
be enforced.”
Fact: Publicly
traded foreign
online operators
left the U.S. market
– privately held
companies did not.
The Global Betting
and Gaming
Consultants, a U.K.
based organization
that provides
economic research on
worldwide gambling
activities, found
that there was a
short-term dip in
Internet gambling in
North America right
after the law was
passed due to the
consequences of the
regulated companies
pulling out, leaving
the market to
unregulated ones.
Over the past year,
online gambling has
increased by 10
percent. Millions of
Americans continue
to gamble online,
despite the attempt
to prohibit Internet
gambling.
Leading Financial
Institutions Do Not
Support UIGEA
Statement: “The law
(UIGEA) passed with
the support of a
broad coalition that
included…the
American Bankers
Association…”
Fact:
Representatives from
the American Bankers
Association,
Financial Services
Roundtable, Wells
Fargo & Co. and
Credit Union
National Association
unanimously opposed
regulations proposed
to implement UIGEA
in testimony to the
House Committee on
Financial Service’s
Subcommittee on
Domestic and
International
Monetary Policy,
Trade, and
Technology on April
2, 2008. They all
questioned the
fundamental approach
taken by Congress in
enacting legislation
to force financial
institutions to
police online
gambling.
“The UIGEA and the
Proposed Rule do not
provide a rational
path towards halting
unlawful Internet
gambling,” said
Wayne Abernathy,
American Bankers
Association’s
executive vice
president of
financial
institutions policy
and regulatory
affairs. “The path
leads to an
increased cost and
administrative
burden to the banks
and an erosion in
the performance of
the payments system,
but it will not
result in stopping
illegal Internet
gambling
transactions.
Imposing this
enormous unfunded
law enforcement
mandate on banks in
place of the
government’s law
enforcement agencies
is not likely to be
a successful public
policy.”
Regulation Does Not
Lead to Increase in
Problem Gambling
Statement: Internet
gambling lure young
people who “by the
tens of thousands
are becoming
compulsive, addicted
gamblers.”
Fact: A report
released in
September 2007 by
the U.K. Gambling
Commission, which
regulates Internet
gambling in Britain,
reveals that the
prevalence of
problem gambling has
not increased over
the last eight years
despite the advent
of Internet
gambling. The
British Gambling
Prevalence Survey
2007 found that the
rates of problem
gambling were 0.6
percent and 0.5
percent of the
gambling population,
the same percentage
of problem gamblers
as reported in the
last gambling
participation survey
conducted in 1999.
Internet Gambling
Can be Effectively
Regulated to Protect
Consumers
Statement: “The
UIGEA was necessary
because enforcement
tools were so
inadequate.”
Fact: Top experts
have testified
before Congress that
a regulatory
framework for
Internet gambling
would protect
consumers and ensure
the integrity of
Internet gambling
financial
transactions.
Leaders in the
fields of internet
payment processing,
identity
identification and
online safety
described how
existing systems and
technology have
proven successful in
combating underage
and compulsive
gambling and
protecting against
money laundering,
fraud and identity
theft.
Rep. Barney Frank
(D-Mass.) introduced
the Internet
Gambling Regulation
and Enforcement Act
(H.R. 2046) last
year, which
establishes a
regulatory and
enforcement
framework for
licensed gambling
operators to accept
bets and wagers from
individuals in the
U.S. It would
include a number of
built-in consumer
protections,
including safeguards
against compulsive
and underage
gambling, money
laundering, fraud
and identity theft.
States would also
have the right to
control what, if
any, level of
Internet gambling is
permissible within
their borders and
could apply
additional taxes and
restrictions.
About Safe and
Secure Internet
Gambling Initiative
The Safe and Secure
Internet Gambling
Initiative promotes
the freedom of
individuals to
gamble online with
the proper
safeguards to
protect consumers
and ensure the
integrity of
financial
transactions. For
more information on
the Initiative,
please visit
www.safeandsecureig.org.
The Web site
provides a means by
which individuals
can register support
for regulated
Internet gambling
with their elected
representatives.
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