August 30, 2006
Lining Up on H.R. 4411
Posted by Christine Hurt

I'm posted on H.R. 4411 before, a bill that purports to stop online gambling by targeting financial institutions who allow monies to be routed through their system on their way to an online casino.  So, if you make an electronic payment from your bank account to a casino, or to Neteller and then a casino, the bank is on the hook under this bill.  We can guess the parties in favor of the bill:  states who believe that online gambling cannibalizes their lottery monopolies; tribal casinos who think the same thing; congressional leaders who want to distance themselves from Jack Abramoff; and those who believe that gambling is morally wrong and socially destructive and should be illegal in all forms, and who have chosen to succeed in at least one area.

At least for now, some groups are lining up to oppose this bill, which now is in the Senate.  WSJ article here.  Apparently requiring all banks to be policeman will cost banks a lot of money, especially smaller banks.  The Independent Community Bankers of America, the American Bankers Association, and the U.S. Chamber of Commerce have spoken out against the bill.  A lobbyist for the ICBA says quite pointedly, "It's very tempting to think the banking industry can stop this kind of stuff because people pay for it through banks, but the fact is the system just wasn't really designed to do it."  The author of the bill, Rep. Leach, responds:  "It's the only approach I know of that has a hope of making a significant dent in Internet gambling."

Well, just because it's the only plan that could work doesn't mean that it's a feasible plan.  It may be as infeasible as placing liability on Dell Computer Corp. (or AOL or Google or the manufacturer of your couch) anytime a user of the computer (or AOL or Google or the couch) accesses an online gambling site.

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