WTO Internet Gambling Decision Coming Friday: Jon Kyl Pleads for Continued Policing of UIGEA

Gambling911.com has been informed that a World Trade Organization decision related to compensation in an online gambling dispute between Antigua and the United States will be announced this coming Friday.

Our sources on Capital Hill have also revealed the following letter submitted by Senator Jon Kyl, co-author of the Unlawful Internet Gambling Enforcement Act, made into law last year and currently being challenged by iMEGA.org.  Kyl sent this out on Tuesday.


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INTERNET GAMBLING -- (Senate - December 18, 2007)


[Page: S15896]  GPO's PDF
---   Mr. KYL. Mr. President, I would like my colleagues to be aware of an
important letter signed by 45 State attorneys general expressing ``grave
concerns'' about Representative BARNEY FRANK's Internet Gambling Regulation
and Enforcement Act, H.R. 2046.

   The State attorneys general note that the recently enacted Unlawful
Internet Gambling Enforcement Act of 2006 has ``effectively driven many
illicit gambling operators from the American marketplace.'' The Frank bill
``proposes to do the opposite, by replacing state regulations with a federal
licensing program that would permit Internet gambling companies to do
business with U.S. customers.'' The letter continues:


   A federal license would supersede any state enforcement action, because 
5387 in H.R. 2046 would grant an affirmative defense against any prosecution
or enforcement action under any Federal or State law to any person who
possesses a valid license and complies with the requirements of H.R. 2046.
This divestment of state gambling enforcement power is sweeping and
unprecedented.


   One final but very important point from the letter is the impact of the
so-called ``opt-out'' provisions. Specifically, the letter reads:


   [T]he opt-outs may prove illusory. They will likely be challenged before
the World Trade Organization. The World Trade Organization has already shown
itself to be hostile to U.S. restrictions on Internet gambling . If it
strikes down state opt-outs as unduly restrictive of trade, the way will be
open to the greatest expansion of legalized gambling in American history and
near total preemption of State laws restricting Internet gambling .


   The Frank bill is unacceptable to the State attorneys general and it
ought to be unacceptable to Members of Congress as well. I urge my
colleagues to oppose the Frank bill or any similar proposals that would
create a permissive Federal licensing scheme for Internet gambling .

   I ask unanimous consent to have printed in the Record the letter from the
National Association of Attorneys General.

   There being no objection, the material was ordered to be printed in the
RECORD, as follows:


   NATIONAL ASSOCIATION OF

   ATTORNEYS GENERAL,

   Washington, DC, November 30, 2007.
Hon. Nancy Pelosi,
Speaker,
House of Representatives.
Hon. HARRY REID,
Majority Leader,
U.S. Senate.
Hon. JOHN BOEHNER,
Minority Leader,
House of Representatives.
Hon. MITCH MCCONNELL,
Minority Leader, U.S. Senate.

   TO THE LEADERSHIP OF THE U.S. HOUSE OF REPRESENTATIVES AND SENATE:

   We, the Attorneys General of our respective States, have grave concerns
about H.R. 2046, the ``Internet Gambling Regulation and Enforcement Act of
2007.'' We believe that the bill would undermine States' traditional powers
to make and enforce their own gambling laws.

   On March 21, 2006, 49 NAAG members wrote to the leadership of Congress:

   ``We encourage the United States Congress to help combat the skirting of
state gambling regulations by enacting legislation which would address
Internet gambling , while at the same time ensuring that the authority to
set overall gambling regulations and policy remains where it has
traditionally been most effective: at the state level.''

   Congress responded by enacting the Unlawful Internet Gambling Enforcement
Act of 2006 (UIGEA), which has effectively driven many illicit gambling
operators from the American marketplace.

   But now, less than a year later, H.R. 2046 proposes to do the opposite,
by replacing state regulations with a federal licensing program that would
permit Internet gambling companies to do business with U.S. customers. The
Department of the Treasury would alone decide who would receive federal
licenses and whether the licensees were complying with their terms. This
would represent the first time in history that the federal government would
be responsible for issuing gambling licenses.

   A federal license would supersede any state enforcement action, because
§5387 in H.R. 2046 would grant an affirmative defense against any
prosecution or enforcement action under any Federal or State law to any
person who possesses a valid license and complies with the requirements of
H.R. 2046. This divestment of state gambling enforcement power is sweeping
and unprecedented.

   The bill would legalize Internet gambling in each State, unless the
Governor clearly specifies existing state restrictions barring Internet
gambling in whole or in part. On that basis, a State may ``opt out'' of
legalization for all Internet gambling or certain types of gambling .
However, the opt-out for types of gambling does not clearly preserve the
right of States to place conditions on legal types of gambling . Thus, for
example, if the State permits poker in licensed card rooms, but only between
10 a.m. and midnight, and the amount wagered cannot exceed $100 per day and
the participants must be 21 or older, the federal law might nevertheless
allow 18-year-olds in that State to wager much larger amounts on poker
around the clock.

   Furthermore, the opt-outs may prove illusory. They will likely be
challenged before the World Trade Organization. The World Trade Organization
has already shown itself to be hostile to U.S. restrictions on Internet
gambling . If it strikes down state opt-outs as unduly restrictive of trade,
the way will be open to the greatest expansion of legalized gambling in
American history and near total preemption of State laws restricting
Internet gambling .

   H.R. 2046 effectively nationalizes America's gambling laws on the
Internet , ``harmonizing'' the law for the benefit of foreign gambling
operations that were defying our laws for years, at least until UIGEA was
enacted. We therefore oppose this proposal, and any other proposal that
hinders the right of States to prohibit or regulate gambling by their
residents.

   Sincerely,
John Suthers, Attorney General of Colorado; Bill McCollum, Attorney General
of Florida; Douglas Gansler, Attorney General of Maryland; Troy King,
Attorney General of Alabama; Talis J. Colberg, Attorney General of Alaska;
Terry Goddard, Attorney General of Arizona; Dustin McDaniel, Attorney
General of Arkansas; Edmund G. Brown, Jr., Attorney General of California;
Richard Blumenthal, Attorney General of Connecticut; Joseph R. (Beau) Biden
III, Attorney General of Delaware; Linda Singer, Attorney General of
District of Columbia; Thurbert E. Baker, Attorney General of Georgia; Alicia
G. Limtiaco, Attorney General of Guam; Mark J. Bennett, Attorney General of
Hawaii; Lawrence Wasden, Attorney General of Idaho; Lisa Madigan, Attorney
General of Illinois; Stephen Carter, Attorney General of Indiana ; Paul
Morrison, Attorney General of Kansas; Charles C. Foti, Jr., Attorney General
of Louisiana; G. Steven Rowe, Attorney General of Maine; Lori Swanson,
Attorney General of Minnesota; Jim Hood, Attorney General of Mississippi;
Jeremiah W. (Jay) Nixon, Attorney General of Missouri; Mike McGrath,
Attorney General of Montana; Kelly A. Ayotte, Attorney General of New
Hampshire; Anne Milgram, Attorney General of New Jersey; Gary King, Attorney
General of New Mexico; Roy Cooper, Attorney General of North Carolina; Wayne
Stenehjem, Attorney General of North Dakota; Marc Dann, Attorney General of
Ohio; W.A. Drew Edmondson, Attorney General of Oklahoma; Hardy Myers,
Attorney General of Oregon; Tom Corbett, Attorney General of Pennsylvania;
Patrick C. Lynch, Attorney General of Rhode Island; Henry McMaster, Attorney
General of South Carolina; Larry Long, Attorney General of South Dakota;
Robert E. Cooper, Jr., Attorney General of Tennessee; Greg Abbott, Attorney
General of Texas; Mark Shurtleff, Attorney General of Utah; William H.
Sorrell, Attorney General of Vermont; Robert McDonnell, Attorney General of
Virginia; Rob McKenna, Attorney General of Washington; Darrell V. McGraw,
Jr., Attorney General of West Virginia; J.B. Van Hollen, Attorney General of
Wisconsin; Bruce A. Salzburg, Attorney General of Wyoming.