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Rep. Bachus' online gambling ban gets last-minute assist from Bush administration
Last-minute rules bring criticism
Monday, December 01, 2008 MARY ORNDORFF
News Washington correspondent
WASHINGTON - One man's midnight rulemaking by the outgoing Bush administration is another's long overdue governing.
For U.S. Rep. Spencer Bachus, new rules restricting financial transactions for online wagering are a welcome parting shot in his long-running bid to outlaw Internet gambling. The Department of the Treasury and the Federal Reserve Board recently issued details on how banks can follow a 2006 law banning certain types of online betting.
"No longer will the offshore gambling interests benefit from turning any computer into a casino that is available every minute of the day," the Vestavia Hills congressman said when the rule was issued earlier this month.
But for opponents of the gambling ban, the new rules are a sneaky, last-minute attempt to make it harder for a new Congress to repeal the ban, an effort that had been gaining momentum before Congress adjourned a few weeks ago.
"This midnight rulemaking will tie the hands of the new administration, (and) burden the financial services industry at a time of economic crisis," Rep. Barney Frank, D-Mass., wrote to the administration.
At stake is a big part of the $16 billion global online gaming industry. Congress two years ago decided to prevent banks from processing the financial transactions related to computer betting, led in part by Bachus, who argued the easy-access wagering encourages gambling addictions, especially among young people.
"I keep saying to everyone involved, if people want to go to a casino, that's one thing, but putting a computer in the bedroom of every teenager has addicted a whole generation," Bachus said in a recent interview.
The Unlawful Internet Gambling Enforcement Act of 2006 was meant to stop the use of credit cards, checks and electronic funds transfers to fuel computer gaming. In addition to the protests from gaming interests, the financial services industry balked, calling the law vague, difficult to enforce and unlikely to stop all online betting.
Ever since, Congress has debated - sometimes passionately - whether the government should be in the business of telling law-abiding adults that they can't make certain financial decisions at home that would otherwise be legal in a casino.
Bachus' side won the initial argument to get the ban enacted into law, but it's been under attack ever since as an overreach.
"The clock is ticking on President Bush's prohibitionist crusade against Internet gaming and that is clearly why these flawed regulations are being forced on the financial services industry at the very last minute," said Rep. Shelley Berkley, D-Nev.
The law was passed in 2006, and Bachus has been critical of how long it took Treasury officials to write the new rules, which take effect in 2009. The new rules give specific definitions of the types of transactions covered by the ban.
Some foreign computer gambling operators already have stopped accepting bets from American computer-users, said Michael Waxman, a spokesman for the Safe and Secure Internet Gambling Initiative, which supports the industry. And gamblers can avoid the ban by setting up accounts with non-U.S. banks. The industry, instead, supports legislation to legalize, regulate and tax online gaming.
"We think not only is Congress going to have incentive to move on legislation ... because of the flawed rules attempting to ban activity, but Congress is going to realize it's much better to look to protect consumers and collect billions in tax revenue," Waxman said.
Bachus, who has been derided by online gaming advocates, is gearing up for the next battle when Congress reconvenes in January.
"These offshore gambling sites earned hundreds of billions of dollars, and the people that have opposed me on this have hundreds of billions to spend," Bachus said.
E-mail: morndorff@bhamnews.com
Rep. Bachus' online gambling ban gets last-minute assist from Bush administration
Last-minute rules bring criticism
Monday, December 01, 2008 MARY ORNDORFF
News Washington correspondent
WASHINGTON - One man's midnight rulemaking by the outgoing Bush administration is another's long overdue governing.
For U.S. Rep. Spencer Bachus, new rules restricting financial transactions for online wagering are a welcome parting shot in his long-running bid to outlaw Internet gambling. The Department of the Treasury and the Federal Reserve Board recently issued details on how banks can follow a 2006 law banning certain types of online betting.
"No longer will the offshore gambling interests benefit from turning any computer into a casino that is available every minute of the day," the Vestavia Hills congressman said when the rule was issued earlier this month.
But for opponents of the gambling ban, the new rules are a sneaky, last-minute attempt to make it harder for a new Congress to repeal the ban, an effort that had been gaining momentum before Congress adjourned a few weeks ago.
"This midnight rulemaking will tie the hands of the new administration, (and) burden the financial services industry at a time of economic crisis," Rep. Barney Frank, D-Mass., wrote to the administration.
At stake is a big part of the $16 billion global online gaming industry. Congress two years ago decided to prevent banks from processing the financial transactions related to computer betting, led in part by Bachus, who argued the easy-access wagering encourages gambling addictions, especially among young people.
"I keep saying to everyone involved, if people want to go to a casino, that's one thing, but putting a computer in the bedroom of every teenager has addicted a whole generation," Bachus said in a recent interview.
The Unlawful Internet Gambling Enforcement Act of 2006 was meant to stop the use of credit cards, checks and electronic funds transfers to fuel computer gaming. In addition to the protests from gaming interests, the financial services industry balked, calling the law vague, difficult to enforce and unlikely to stop all online betting.
Ever since, Congress has debated - sometimes passionately - whether the government should be in the business of telling law-abiding adults that they can't make certain financial decisions at home that would otherwise be legal in a casino.
Bachus' side won the initial argument to get the ban enacted into law, but it's been under attack ever since as an overreach.
"The clock is ticking on President Bush's prohibitionist crusade against Internet gaming and that is clearly why these flawed regulations are being forced on the financial services industry at the very last minute," said Rep. Shelley Berkley, D-Nev.
The law was passed in 2006, and Bachus has been critical of how long it took Treasury officials to write the new rules, which take effect in 2009. The new rules give specific definitions of the types of transactions covered by the ban.
Some foreign computer gambling operators already have stopped accepting bets from American computer-users, said Michael Waxman, a spokesman for the Safe and Secure Internet Gambling Initiative, which supports the industry. And gamblers can avoid the ban by setting up accounts with non-U.S. banks. The industry, instead, supports legislation to legalize, regulate and tax online gaming.
"We think not only is Congress going to have incentive to move on legislation ... because of the flawed rules attempting to ban activity, but Congress is going to realize it's much better to look to protect consumers and collect billions in tax revenue," Waxman said.
Bachus, who has been derided by online gaming advocates, is gearing up for the next battle when Congress reconvenes in January.
"These offshore gambling sites earned hundreds of billions of dollars, and the people that have opposed me on this have hundreds of billions to spend," Bachus said.
E-mail: morndorff@bhamnews.com
