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Right now I feel surrounded by Chicken Little's running around screaming "The sky is falling, the sky is falling." Industry analysts are predicting the end of internet gaming as we know it due to the potential crackdown the US is doing on the gaming industry. There are some changes amok in the United States and while they definitely will change the industry as we know it this may not be such a bad thing. Of course, people aren't looking at what is happening objectively so stock prices are crashing (which may make it a good time to buy). What is happening, you ask? A host of new "prohibition bills" are being presented to both the House of Representatives and the Senate by various Republican politicians. The fear is that the political climate towards internet gambling has changed due to the scandal uncovered by the Washington Post. It's recently been speculated that US Republican lobbyist and politician Jack Abramoff and Republican Representative Tom DeLay may have manipulated voting and other factors surrounding the Internet Gambling Prohibition Act in 2000. An aide of Tom DeLay assisted in defeating the bill after receiving special treatment from Jack Abramoff. At the time Tom DeLay was the House Majority Leader, currently he is under indictment for criminal conspiracy. Jack Abramoff has already pleaded guilty to several political crimes and faces more charges. In order for Republicans to distance themselves from this new disgrace they will take their anti-gambling political pit bulls and sick them on the internet gambling trail. One of the Republican leaders for internet gambling annihilation is Rep. John Shadegg who was also in the race to replace Tom DeLay as House Majority Leader (he lost). Shadegg has previously mentioned that passing a prohibition on online gambling is a high priority. Obviously the industry is nervous at such news. Previously Shedegg wrote in a Congressional newspaper "In 2000, a ban on Internet gambling received 245 votes on the suspension calendar, but, according to news accounts, we were kept from passing it because of Jack Abramoff’s machinations and manipulation. Passing it now would be good public policy and a clear signal that the era of Abramoff's influence is over." Republican Representative Jim Leach introduced bill H.R. 4411, otherwise known as the Unlawful Gambling Enforcement Act. This bill is aimed at restricting the $12 billion industry by making it illegal to use credit cards or bank drafts from American financial institutions to fund online accounts with web gambling services. A Leach spokesperson said that "We expect this to move sometime this year." The bill has 23 co-sponsors, including Rep. Spencer Bacchus the chair of the House subcommittee with jurisdiction over financial institutions. Republican Senator Jon Kyl is introducing a similar bill which would make depositing into internet casinos, poker rooms and sportsbooks illegal, to the Senate, again. Kyle has been attempting to pass some sort of anti-internet gambling legislation for over eight years. He even helped Representative Leach word his latest bill to the House. Virginian Republican Senator Bob Goodlatte, is presenting a different kind of anti-internet gambling bill to House of Representatives. This bill will be like the previous bill he authored in November 2001 in that it will seek to specifically address online gambling in relation to the US Wire Act. Goodlatte's last attempt to pass a prohibition bill failed. He attempted to pass a bill that extended the Wire Act to address not only "wire" bets, but also all other forms of communication "cable," "satellite" and "microwave". It was also aimed at wireless betting. The two bills being put up to the House and Senate which are attempting to curb US citizens direct spending into internet casinos, sportsbooks, and poker rooms are not actually that big of a deal if you look at it objectively. Most United States credit card companies already ban deposits into any sort of internet gambling so this is a regulation which is more or less already into place. The ban on direct depositing from bank accounts also wouldn't have a major impact on the industry as it isn't a very popular method of deposit, being that it requires the player to get out of their house and go to the bank. All of this simply means good news for alternative deposit methods. As the ban will be on directly depositing into internet casinos there will be no ban on depositing into Neteller or other preferred methods of deposit by casinos. The direct deposit ban will not keep US citizens from internet gambling. It will, in fact, help the internet casinos, sportsbooks, and poker rooms by forcing people to deposit in more reliable ways. Neteller and Moneybookers are known for their low fraud rates, while credit card deposits are rampant with fraud. This makes me wonder if Jon Kyle owns stock in Neteller. On the other hand the bill being introduced by Goodlatte is a whole other entity. It will make the deposit itself illegal and create a situation where law enforcement agencies could go after individuals. Does the internet gambling industry have cause for worry? I'd like to remind everyone of a few things. The first being that the last bill Senator Jon Kyle tried to get passed was vetoed by an anonymous Democrat. The other is that these bills have been introduced and have been failing for years now. Internet gambling is growing, that means that more constituents of these Senators and Representatives are internet gamblers. It's safe to assume that these politicians want to please their constituents and get them re-elected. There are also several states where depositing into any sort of internet gambling is already illegal and the law enforcement agencies have done nothing to prevent players from gambling. In fact, Hawaii has stated outright that they consider internet gambling a victimless crime and they will not pursue any internet gamblers. My prediction is that things will stay the same. Republicans will make a mighty noise in order to cover their tushies and no bills preventing deposits or otherwise will actually be passed. Of course, I could be wrong. Posted on: February 22, 2006
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