Internet Bills Reported out of Judiciary

WASHINGTON (May 25, 2006) -- The House Judiciary Committee Thursday reported out the Internet Gambling Prohibition Act (H.R. 4777), introduced by Congressman Bob Goodlatte (R-VA), with specific horseracing language that provides that “nothing in this Act may be construed to prohibit any activity that is allowed under Public Law 95-515 as amended (15 U.S.C. 3001 et seq.).” That reference is to the Interstate Horseracing Act.

The horse racing provision has been controversial whenever considered. It has been uniformly opposed by the Department of Justice (DOJ). Mr. Goodlatte has maintained that his legislation is intended to maintain the “status quo” regarding what is legal with respect to interstate Internet wagering, be it horseracing or lotteries, always making the important point that only racing has a federal statute passed to govern its interstate wagering activities. In the last few weeks, to alleviate the concerns expressed by the Department of Justice in particular, and a number of members of the Judiciary Committee in general, Mr. Goodlatte had been working with DOJ to find language to include in his bill regarding horse racing that could be supported by DOJ.

The compromise reached was to move the horse racing provision to its own section and to add a section clarifying that the bill was not intended to change the relationship between the IHA and other federal statutes now in effect, such as the Wire Statute.

With this change, DOJ supported the racing provision. The National Thoroughbred Racing Association worked on this language and it has also been reviewed by a number of attorneys familiar with simulcasting, interstate account wagering, the IHA, as amended, and the Wire Statute. All feel comfortable that racing may continue to do what it is now doing with respect to interstate wagering under the Interstate Horseracing Act.

Even with these changes there were several attempts during the Committee’s consideration to remove the horse racing language. Representative Bob Wexler (D-FL) first offered an amendment to include dog racing and jai alai within the various exclusions from the bill. When that amendment failed, he offered an amendment to remove the other so-called exclusions for intrastate lotteries, Native American gaming on the reservation and horse racing. That amendment also failed.

Several other amendments were offered, including one by Congressman Cannon (R-UT) to protect any states, such as Utah, that have laws specifically prohibiting gambling. Mr. Cannon’s amendment provided that “Nothing in this act may be construed to preempt State law prohibiting gambling.” That amendment passed.

Representative John Conyers (D-MI), the ranking Democrat, also offered an amendment that would have imposed additional restrictions on the racing provisions to protect minors and Representative Bobby Scott (D-VA) offered an amendment to make individuals criminally liable for gambling on the Internet. Both amendments were defeated.

The Committee also reported out the Leach Unlawful Internet Gambling Enforcement Act of 2006 (H.R. 4411). The Leach bill had already been considered and approved by the House Financial Services Committee.

The two Internet gambling bills will now go to the House Rules Committee, which will determine how the full House will consider them. The bills could be considered separately or they could be combined in some fashion and one bill brought to the floor.