Internet gamblers, sing halleluiah. The wicked witch is dead.

Republican Senate Majority Leader Bill Frist from Tennessee has done nothing with H.R. 4411, the anti-internet gambling legislation passed by the House of Representatives in July. He hasn't even taken action on anything similar to H.R. 4411. Instead he wants to use a bill authorizing U.S. military operations, including in Iraq and Afghanistan, to ban people from using credit cards to deposit into online gambling casinos, poker rooms and sports books.

H.R. 4411 is an anti-internet bill aimed at banning people from depositing directly from their credit card or bank account into internet casinos, poker rooms, or sports books. It would also keep banks from processing electronic funds transfers from internet casinos (for things like winnings) or e-checks for online gambling transactions. It would kill internet gambling by clarifying hole in the 1961 Wire Act and would prevent companies from accepting online wagers. The Justice Department believes that the 1961 Wire Act makes online gambling illegal, but the courts have decided that the Wire Act is only for sports betting. The internet wasn't even invented in 1961, so as long as the casino doesn't allow for phone deposits the internet casino may be illegal, but depositing on it and playing is. In other words, owning an online casino – no, playing and winning – yes.

The strongest voice of opposition to H.R. 4411 wasn't the American internet gambler. Surprisingly enough, it was the banks. The banking sector is against the provisions that require banks to block electronic funds transfers or e-check payments to online gambling sites. These provisions are essentially broad and unenforceable, as the system isn't correctly set up for it. To revamp the entire banking system would take time and money, time taken away from other things like tracking the financial trail of terrorists. Furthermore, even if it were possible to surmount technical obstacles, people who wanted to play online could simply use alternative deposit methods to deposit into online casinos. Neteller, for example, isn't covered by H. R. 4411, thus taking the bite out of the legislation and rendering it useless.

Back to why this legislation is now dead.

According to the Associated Press, Frist, and his aides, "have been meeting with other lawmakers and officials in both the House and Senate to get the measure attached to a compromise Defense Department authorization bill, according to a Senate GOP leadership aide."

This new version is a watered down version of the House measure, the details of which are still being negotiated. This isn't the first time someone in the Senate has tried to attach anti-online gambling legislation to a Defense Department bill. There are two bills authorizing defense programs: S.2507 and H.R.5122

S. 2507 was introduced by Sen. John Warner [R-VA], the description of on govtrack.us is "To authorize appropriations for fiscal year 2007 for military activities of the Department of Defense, to prescribe military personnel strengths for fiscal year 2007, and for other purposes. The status of the bill is as follows: "This bill is in the first step in the legislative process. Introduced Senate bills go first to Senate committees that consider whether the bill should be presented to the Senate as a whole. The majority of bills never make it out of committee." Considering the time left for this to get through the Senate it will never make it to the House of Representatives on time to pass and get to the president.

Govtrack.us states that H.R. 5122 is "To authorize appropriations for fiscal year 2007 for military activities of the Department of Defense, for military construction, and for defense activities of the Department of Energy, to prescribe military personnel strengths for such fiscal year, and for other purposes." H.R. 5122 has "… passed in both the House and Senate, the bill may proceed to a conference committee of senators and representatives to work out differences in the versions of the bill each chamber approved. The bill then awaits the signature of the President before becoming law." I'm not sure they can attach anything new at this stage.

Let's take a moment and remember our favorite anti-internet gambling Senator, Republican Jon Kyle from Arizona. Kyle tried to get anti-internet gambling legislation piggy-backed onto defense department bills for the past nine years. He's failed every single time. That's because anti-internet gambling has nothing to do with the department of defense. Gambling has nothing to do with terrorism. Mafia, maybe, terrorism, no. Terrorists are not sitting there, playing slots online, hoping to win a Microgaming jackpot so that they can fund their next jihad. It's a ridiculous correlation.

I don't believe Frist killed it because he likes to gamble online. I think he killed it because he wants the banks on his side. Apparently Frist is interested in a 2008 presidential bid. So, instead of voicing a negative opinion on it (quite the contrary, he called it a legislative priority in a recent speech on the Senate floor) he covers his own by attaching it to something that has nothing to do with it and as such it will die on its own. Don't you just love politics?

Most likely he didn't even have to go to such an effort, as the odds of a bill making it through the Senate before the early end of the legislative year. This means the online gambling issue will be left to the new Congress, which convenes in January 2007.

The Republicans have officially covered their asses. After the humiliated stain of Jack Abramoff, the lobbyist who was convicted of fraud and bribing Republican officials in Washington, the Republicans have done their duty. They have shown their fierceness against internet gambling in the House of Representatives, whose former majority leader, Tom DeLay, was named in the Abramoff proceedings and stepped down from his post, while not actually changing anything. They have made a mighty noise with the assurance that everything would end with a whimper and not a bang.

As long as anyone connected to owning or running an online casino stays out of the United States things should be smooth and quiet sailing for awhile. At least until January 2007.

Posted on: September 15, 2006

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