For Immediate Release
Contact: Michael Waxman
(202) 872-0010 or (202) 872-4860
Rep. Bachus Offers Misinformation in His Support of Ban on
Internet Gambling
(Washington, D.C. – June 25, 2008) – The American Banker published an editorial
yesterday, “Viewpoint: Blocking Web Gambling Rules Would Be Mistake,” by Rep.
Spencer Bachus (R-Ala.) that uses incorrect information to argue for the continued
prohibition of Internet gambling. Rep. Bachus’ opinion piece comes as the House
Committee on Financial Services is scheduled to vote today on a bill, the Payments
System Protection Act (H.R. 5767), that would prohibit the Department of the Treasury
and Federal Reserve System from proposing, prescribing or implementing any
regulations related to the current ban on Internet gambling, as required by the Unlawful
Internet Gambling Enforcement Act of 2006 (UIGEA).
“It is unfortunate that Rep. Bachus is using scare tactics to argue for the continued
prohibition of Internet gambling,” said Jeffrey Sandman, spokesman for the Safe and
Secure Internet Gambling Initiative. “The reality is that regulated Internet gambling,
which is clearly working in the U.K. and other parts of the world, can utilize technology to
offer strong consumer protections to combat underage and compulsive gambling in the
U.S. Currently, prohibition leaves millions of Americans susceptible as they continue to
gamble in an underground, uncontrolled marketplace without such guaranteed
protections.”
UIGEA Has Not Lead to a Decrease in Internet Gambling
Statement: “Since the law was passed, gamblers and businesses engaged in Internet
gambling have been deterred by the fear it would be enforced.”
Fact: Publicly traded foreign online operators left the U.S. market – privately held
companies did not. The Global Betting and Gaming Consultants, a U.K. based
organization that provides economic research on worldwide gambling activities, found
that there was a short-term dip in Internet gambling in North America right after the law
was passed due to the consequences of the regulated companies pulling out, leaving
the market to unregulated ones. Over the past year, online gambling has increased by
10 percent. Millions of Americans continue to gamble online, despite the attempt to
prohibit Internet gambling.
Leading Financial Institutions Do Not Support UIGEA
Statement: “The law (UIGEA) passed with the support of a broad coalition that
included…the American Bankers Association…”
Fact: Representatives from the American Bankers Association, Financial Services
Roundtable, Wells Fargo & Co. and Credit Union National Association unanimously
opposed regulations proposed to implement UIGEA in testimony to the House
Committee on Financial Service’s Subcommittee on Domestic and International
Monetary Policy, Trade, and Technology on April 2, 2008. They all questioned the
fundamental approach taken by Congress in enacting legislation to force financial
institutions to police online gambling.
“The UIGEA and the Proposed Rule do not provide a rational path towards halting
unlawful Internet gambling,” said Wayne Abernathy, American Bankers Association’s
executive vice president of financial institutions policy and regulatory affairs. “The path
leads to an increased cost and administrative burden to the banks and an erosion in the
performance of the payments system, but it will not result in stopping illegal Internet
gambling transactions. Imposing this enormous unfunded law enforcement mandate on
banks in place of the government’s law enforcement agencies is not likely to be a
successful public policy.”
Regulation Does Not Lead to Increase in Problem Gambling
Statement: Internet gambling lure young people who “by the tens of thousands are
becoming compulsive, addicted gamblers.”
Fact: A report released in September 2007 by the U.K. Gambling Commission, which
regulates Internet gambling in Britain, reveals that the prevalence of problem gambling
has not increased over the last eight years despite the advent of Internet gambling. The
British Gambling Prevalence Survey 2007 found that the rates of problem gambling were
0.6 percent and 0.5 percent of the gambling population, the same percentage of problem
gamblers as reported in the last gambling participation survey conducted in 1999.
Internet Gambling Can be Effectively Regulated to Protect Consumers
Statement: “The UIGEA was necessary because enforcement tools were so
inadequate.”
Fact: Top experts have testified before Congress that a regulatory framework for
Internet gambling would protect consumers and ensure the integrity of Internet gambling
financial transactions. Leaders in the fields of internet payment processing, identity
identification and online safety described how existing systems and technology have
proven successful in combating underage and compulsive gambling and protecting
against money laundering, fraud and identity theft.
Rep. Barney Frank (D-Mass.) introduced the Internet Gambling Regulation and
Enforcement Act (H.R. 2046) last year, which establishes a regulatory and enforcement
framework for licensed gambling operators to accept bets and wagers from individuals in
the U.S. It would include a number of built-in consumer protections, including
safeguards against compulsive and underage gambling, money laundering, fraud and
identity theft. States would also have the right to control what, if any, level of Internet
gambling is permissible within their borders and could apply additional taxes and
restrictions.
About Safe and Secure Internet Gambling Initiative
The Safe and Secure Internet Gambling Initiative promotes the freedom of individuals to gamble online with the proper safeguards to protect consumers and ensure the integrity of financial transactions. For more information on the Initiative, please visit www.safeandsecureig.org. The Web site provides a means by which individuals can register support for regulated Internet gambling with their elected representatives.
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