Panel Explores Legalizing Net Gambling

12/3/09 - National Journal - View Source

By Juliana Gruenwald

The House Financial Services Committee Thursday held a hearing that was generally friendly toward Chairman Barney Frank's efforts to pass legislation that would regulate Internet gambling rather than banning it entirely. A 2006 law banned Internet gambling and also barred financial institutions from accepting payments from credit cards, checks or electronic fund transfers to settle online gambling bets. Many of the witnesses testified that the best way to control Internet gambling is to legalize it, which will allow officials to license, regulate and tax online gaming.

"If online gambling sites are regulated and licensed, we know who they are," said Parry Aftab of the Web safety group WiredSafety. But Financial Services ranking member Spencer Bachus , who opposes Frank's legislation, said the tax benefits from legalizing online gambling would be undermined by the potential harm to the nation's youth. Noting that online gaming will still occur whether it's legal or not, Aftab said bringing sites under legal scrutiny and encouraging education and parental control provide better approaches to the problem.

Witnesses also discussed the best regulatory regimes to follow if the United States were to enact legislation legalizing Internet gambling. Keith Whyte of the National Council on Problem Gambling, said Britain might offer one model. It has had an Internet gambling regulatory regime in place for several years, adding that addiction rates have not changed significantly there, he said. Other witnesses also said that technology could assist in possibly deterring problem gamblers. Harvard University public management Professor Malcolm Sparrow said some foreign online Web sites offer technical means to help problem gamblers by limiting the amount of time and money users can spend gambling as well as providing links to resources aimed at helping those with gambling problems. Michael Brodsky of YouBet.com, which operates a legal pari-mutuel horse racing wagering site, said his site can lock out those users the firm identifies as problem gamblers.