House Panel Passes Anti-Internet Gambling Bill

A U.S. House committee approved a bill aimed at curbing the Internet gambling industry by stopping business from accepting credit cards and other forms of payment.

The bill, heard by the House Financial Services Committee March 15, would prohibit a gambling business from accepting credit cards, checks, wire transfers, and electronic funds transfers in illegal gambling transactions, according to Jay Hickey, president of the American Horse Council.

The bill, sponsored by Republican Rep. Jim Leach of Iowa, now moves the House floor for consideration.

"H.R. 4411 will create strong tools to help federal and state governments enforce existing gambling prohibitions," Leach said in a statement. "Unlike in brick-and-mortar casinos in the United States where legal protections for bettors exist and where there are some compensatory social benefit in jobs and tax revenues, Internet gambling sites principally yield only liabilities to Americans."

The legislation does include exceptions for horse racing, which is governed under the Interstate Horse Racing Act of 1978, allowing for simulcasts across state lines as well as account wagering via phone lines or the Internet in states in which it is legal. Fantasy sports are also listed as an exception in this bill.

Unlawful gambling, under the legislation, would include placing bets on online poker sites and any other online wager made or received in a place where such bet is illegal under federal or state law.

The committee approval of this bill follows bipartisan legislation, the Internet Gambling Prohibition Act, introduced into the House in February by Virginia Republican Rep. Bob Goodlatte and Democrat Rick Boucher, that would outlaw Internet gambling, but again allow for an exception for horse racing.

It would also set a maximum prison sentence of five years, up from two years, for a violation of this act. The legislation allows states to continue to regulate gambling within their borders.