Online Gambling Measure Passes Committee, Awaits House Action
Two Internet-related bills came before the House Financial Services Committee Wed., sparking debate over whether Congress has a duty to obstruct online gambling and how to balance federal responsibilities and state interests. The Unlawful Internet Gambling Enforcement Act (HR-4411), passed by voice vote, awaits action by the House. Panel review of the Financial Data Protection Act (HR-3997), delayed by multiple adjournments, took place throughout the afternoon with a flurry of amendments offered. Further debate and a committee vote were scheduled for this morning (Thurs.).
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HR-4411, introduced in Nov. by Rep. Leach (R-Ia.), would bar use of certain payment instruments, credit cards and fund transfers for unlawful Web gambling. Unlike brick & mortar casinos, which bring communities revenue and jobs, Web operations “principally yield only liabilities to Americans and America,” Leach said. His bill, backed by the NFL and other professional sports leagues, provides exemptions, such as for tribal gaming, fantasy sports league activity and phone and Internet wagering regulated under the Interstate Horseracing Act. A section of HR-4411 also would require the U.S. Treasury to report annually to Congress on any talks between the U.S. and other nations related to Web wagering.
In Feb., Rep. Goodlatte (R-Va.) introduced the Internet Gambling Prohibition Act (HR-4777), which would address the same topic by amending 1961’s Wire Act. The bill would update the law to cover all forms of interstate gambling and account for new technologies. Federal law is hazy on the illegality of running a gambling business on the Web, Goodlatte said (WID Feb 17 p1). Leach supports Goodlatte’s approach and said he hopes both bills move quickly toward passage.
Rep. Frank (D-Mass.) attacked antigambling legislation and voted against the bill. Congress should assume “adults are entitled to do with their own money what they wish to do, particularly if they're not harming others,” he said. That some Americans bet more than they should online is no more an issue for Congress than that some Americans eat more than they should or read books and see movies to which others object, Frank said.
The claim that the bill would guard children from online betting doesn’t fly, Frank said, citing the availability of countless Web blocking and filtering devices. A statutory stand against online gambling is a “grave error” and “one more exception to the freedom of the Internet,” he said: “Once we start with this kind of legislation, realize what kind of precedent we are setting.”
A flap also arose over Rep. LaTourette’s (R-O.) legislation to amend the Fair Credit Reporting Act to boost financial data security. The bill would set too low a standard and offers less protections than current law -- especially the Gramm-Leach Bliley Act (GLBA), in effect since 1999, said Rep. Maloney (D-N.Y.). Banks and regulators have put GLBA to good use and it would be a “serious blow to cut them back,” she said, urging the committee to withdraw HR- 3997 and “try again.” Maloney also offered an amendment to give individuals the right to freeze their credit files; a similar measure passed out of the Senate Commerce Committee.
Data security has drawn Americans’ attention and needs action, Frank said. “Consumers don’t like that their financial data is out there for others to use and misuse. There have been too many stories of people who have been victimized,” he said. But it’s also important to recognize that states’ roles haven’t “withered away,” Frank said. A uniform federal measure affording a “good level of national protection” is the only approach Frank would support, he said. Attempts to use uniformity to usurp states’ rights won’t pass muster and will cause the issue to become “very contentious,” according to the Mass. Democrat.
HR-3997 backer Rep. Hooley (D-Ore.) said the bill “marks an important step forward” in an effort dating to mid-2005, when data breaches made headlines. The measure would provide consumers “very much needed protections” while avoiding unneeded compliance burdens for entities collecting consumer data. Rep. Moore (D-Kan.) agreed, saying consumers should have the right to know when their data are compromised and should have the tools to protect themselves against breaches. Rep. Bachus (R-Ala.) called it a “good bipartisan bill” that protects consumers “regardless of state lines.” But he warned that parts of 2003’s Fair & Accurate Credit Transactions (FACT) Act, like fraud alerts and account flagging, are just now taking effect. It’s important not to legislate the same safeguards in HR-3997, Bachus said.