HR 4411 Does Not make Playing Online Poker Illegal

by Lou on July 19, 2006

H.R. 4411, the Leach bill which was amended to include some of Rep. Goodlatte’s language, passed the House of Representatives by a vote of 317-93. Here’s a summary of the bill, with my comments in italics:

Online gaming sites may not accept payment from a United States financial institution. The United States has no jurisdiction over any online gambling site because they are all outside of the United States. Try as they might, Congress cannot enforce laws on business outside the United States.

Financial institutions may not transfer funds to online gaming sites. Banks and credit card companies already refuse to send money to offshore sites. That’s why offshore third-party financial intermediaries, such as Neteller, were created.

The 1961 Wire Act would be amended to include the Internet and to prohibit games “predominantly subject to chance.” Determining what is, and is not a game of chance will require expensive, time consuming litigation.

Internet service providers and other technology providers will be required to block access to online gambling sites when requested to do so by a law enforcement agency. In my opinion, this is unenforceable, and represents an unfunded mandate that will prove prohibitively expensive if ISPs and others are asked to serve as deputized officers for law enforcement. It is very costly, and not at all in their self-interest to do this.

The Treasury Department and the Federal Reserve will have 270 days to issue regulations outlining policies and procedures that could be used by financial institutions to identify and block gambling-related transactions that are transmitted through their payment systems. This will not be done in any meaningful manner.

The bill exempts lotteries, horse racing, and the stock market. If sports betting or internet poker is immoral and a danger warranting this kind of legislation, why are horseracing, lotteries, fantasy sports leagues and a few other things not a danger?

If online gaming is destroying the moral fiber of society, as its proponents say it is, why doesn’t the bill contain provisions to provide assistance to problem gamblers? It does not, and its legislative intent is incongruent with some of the reasons cited by its adherents. The level of hypocrisy surrounding this bill is such that one shouldn’t be surprised when the stated target of the bill and its actual legislative aim are entirely different.

Cato policy analyst Radley Balko writes, “Web-based gambling is still a $12 billion industry. And so just as has happened every other time our government has attempted to ban vice (see illicit drugs, prostitution, and alcohol), efforts to ban online gambling have not only failed, they’ve created more problems than they’ve solved.”
Balko continues: “The funny thing is, online gaming sites are begging to be legalized and regulated. A better approach would be to allow them to set up shop in the U.S., contribute to the U.S. economy, be regulated by U.S. markets, and be subject to U.S. courts. Of course, that approach would require Congress to treat Americans as adults, and understand that we ought to be free to spend our own money as we please. Even in ways some morally crusading Congressmen happen to find distasteful.”

And what might be the strangest stroke of all, there’s no provision in the bill that prevents you from playing online poker, or renders the game of poker illegal. If this bill were to pass the Senate and become law — something neither I nor more seasoned Congress-watchers predict — we might have to jump through a few more hoops to move our money offshore in order to fund our online poker accounts, but we would not be violating any law by playing poker.

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