This summer I was watching H.R. 4411, a bill passed by the House that prohibited U.S. financial institutions from aiding and abetting online gambling. When asked if the Senate would pass the bill, I usually said that I was prepared to be surprised. Although these types of anti-gambling bills had not been passed in the last four Congresses, I was prepared to be surprised. Well, I'm surprised.
Last week, H.R. 4954 was passed by both the House and the Senate. The title of the bill is the SAFE Ports Act, and it contains detailed provisions on increasing the security of the nation's ports. Who would be against safe ports? However, last week, provisions of H.R. 4411 were tacked on to the end (Sections 801 et seq.) and also passed by both houses, almost unanimously. The text of these new sections is not included in the text of the bill on Thomas (just the subheadings), so I'm not sure if H.R. 4411 was incorporated full-text. News accounts like this one in the WSJ seem to assume that the basic thrust of 4411 is intact -- U.S. financial institutions may not accept transactions that facilitate online gambling.
Of course, gamblers can wager through offshore financial institutions like Neteller, etc. Where there is a will, there's a way. But our state lotteries and tribal casinos (which were excepted in the conference report) can sleep tight knowing that their family friendly gaming operations will not be cannibalized by evil offshore gambling.
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1. Posted by D. Daniel Sokol on October 3, 2006 @ 8:46 | Permalink
This bill comes in the context of a still yet unresolved issue of compliance by the US over its internet gambling policy. Antigua had brought a case against the US at the WTO over discriminatory treatment on internet gambling regulation. After both panel and Appellate Body rulings against it last year, the United States may still not be in compliance with the ruling. Within the next month, a WTO panel will rule on whether the US has complied with the ruling.
The Appellate Body decision, WT/DS285/AB/R, UNITED STATES – MEASURES AFFECTING THE CROSS-BORDER SUPPLY OF GAMBLING AND BETTING SERVICES, can be found at: http://www.worldtradelaw.net/
2. Posted by Peter Henning on October 3, 2006 @ 8:49 | Permalink
Christine,
The bill is available at the following link (I hope).
http://thomas.loc.gov/cgi-bin/query/C?c109:./temp/~c109rmt0wL
Otherwise, in THOMAS, click on the enrolled bill and then the printer-friendly version, which gives you the whole thing.
3. Posted by Christine on October 3, 2006 @ 9:14 | Permalink
Thanks, Peter!
Danny, my understanding of the appellate body decision is that the U.S. is not in compliance with GATS as long as horserace betting is allowed off-track through the Internet (because then some online gambling is allowed while offshore isn't). Because this bill exempts horseracing (as well as lotteries), I assume that the U.S. is clearly out of compliance. Your comment seems to agree -- is that right?
4. Posted by D. Daniel Sokol on October 3, 2006 @ 20:13 | Permalink
The US thinks that it is in compliance, according to its status report to the WTO. I tend to disagree, as does Antigua. The Antiguan complaint can be found at http://www.worldtradelaw.net/cr/ds285-17(cr).pdf
If horseracing is given a carve-out, this indicates non-compliance to me.
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