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Congress Cracks Down On Online Gaming

by Glen Shapiro, LawAndTax-News.com, New York

03 October 2006


Online gaming firms were rocked over the weekend by the news that the US Congress has approved legislation effectively banning all online gaming, by making it illegal for banks and credit card firms to make payments to such internet operations.

The online gaming provisions were tacked by Senate Majority Leader, Bill Frist (R-Tenn) onto an unrelated bill on port security.

The Unlawful Internet Gambling Enforcement Act has been sent to President George W. Bush for his signature, and is being viewed by many as a fait accompli.

Last week, UK-based firm, William Hill announced that it had put an end to its US gambling activity, explaining that:

"Pending clarification of the scope and enforceability of the Wire Act and applicability of State and Federal laws to online gambling by US citizens, William Hill has today taken steps to cease accepting casino and poker business from clients with a US address or US issued credit card."

The move followed accusations and an attempted extradition levelled at the chairman of Sportingbet, Peter Dicks, by the Louisiana authorities, who accused him of "gambling by computer", thereby violating the state's morality laws.

Many other online gaming firms, based in locations such as Gibraltar, Costa Rica and Antigua are now reported to be planning to close their US operations, or have already done so.

Commenting on the passage of the legislation, Frist argued that:

"Gambling is a serious addiction that undermines the family, dashes dreams, and frays the fabric of society. Congress has grappled with this issue for 10 years, and during that time we've watched this shadow industry explode. For me as majority leader, the bottom line is simple: Internet gambling is illegal. Although we can't monitor every online gambler or regulate offshore gambling, we can police the financial institutions that disregard our laws."

A comprehensive report in our Intelligence Report series examining offshore e-commerce and online gaming is available in the Lowtax Library at http://www.lowtaxlibrary.com/asp/subs_reports.asp and a description of the report can be seen at http://www.lowtaxlibrary.com/asp/description_report6.asp

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