House Judiciary Committee Frustrated with UIGEA Exceptions

The House Judiciary Committee expressed its frustration over the inconsistent nature of US gambling laws and the enforcement of those laws at a House hearing Wednesday.

Chairman John Conyers opened up the mid-week hearing on online gambling by giving a summary of the current nature of US online gambling policy. Conyers noted the problems and inconsistencies that challenged lawmakers, including the issues of the "selective nature" of online gambling enforcement, competing arguments for prohibition vs. regulation, states' rights vs. federal policy and the looming risks to US foreign trade relationships now that the WTO has ruled the US is subject to compensation claims.

Arguing in favor of prohibition were a number of Republican identities who consistently argued that online gambling facilitated criminal activity such as money laundering as well as presenting a risk to underage gamblers.

Arguing in favour of regulation were Rep. Shelley Berkley (D-Nev.) and Annie Duke, a high-profile poker professional. Rep. Berkley is introducing legislation that will call for an independent study into the effects of online gambling with the aim of providing Congress with independent data to enable intelligent decision-making in regards to regulation.

Berkley blasted the UIGEA, calling it "absurd and inconsistent". She also pointed out the duality and contradictory nature of the bill, saying "…the UIGEA has made things worse, targeting the financial sector and creating a hypocritical carve out for horse betting."

The most interesting comments came from Catherine Hanaway, US District Attorney for eastern Missouri, speaking on behalf of the Dept. of Justice. Hanaway admitted it was not illegal for US residents to gamble on the Internet, merely that it was the DOJ's position that it was illegal for online gambling companies to take those bets.

Conyers pressed her for why she failed to mention any prosecutions against online horse racing, and Hanaway replied that she couldn't come up with anything related to the online horse racing industry. The UIGEA has provided a special carve-out for the online horse racing industry, allowing anyone to gamble on horse races online.

A moment of humor was provided by Rep. Stephen Cohen (D-Tenn.). Family Research Council Vice President Tom McClusky admitted his organization wasn't just opposed to online gambling, but all forms of gambling. Cohen inquired if McClusky "was opposed to all forms of fun."

The hearing was an important step in the gradual process of educating Congress on the pertinent issues related to online gambling legislation and policy. As EU compensation pressure mounts as a result of the WTO ruling that the UIGEA breached international trade law, Congress might well find themselves looking for arguments to support regulation.

• 
• 
• Email to a friend
• Print