Congress bills attempt to ban online gambling

Renewed congressional attempts to ban online gambling may
curtail a pastime that has been increasing among college students
in recent years.

Two bills have been introduced that would clarify online
gambling’s illegality and attempt to end financial
transactions that facilitate such gambling, cutting off a hobby
that some UCLA students spend several hours a day engaging in.

A bill was introduced in February by Congressman Bob Goodlatte
that makes all online gambling illegal. The issue is currently
unclear because previous legislation, such as the Wire Act, only
referred to gambling over telephone wires. The bill also increases
the maximum penalty for violating the act and increases enforcement
mechanisms.

Another bill, introduced by Congressman James Leach, makes
transfers using credit cards or bank accounts to settle wagers
illegal and is currently in the House Committee on Financial
Services.

Because many gambling sites have moved offshore to avoid
regulation, the bill targets the monetary transactions that
originate from within the United States. Both bills are in the
early stages of progression through Congress.

“We view the two pieces of legislation as
complimentary,” said Michael Borden, a legislative staffer
for Leach.

The Leach bill has “absolutely no interest whatsoever in
going after the individual,” Borden said.

The bill instead targets the financial institutions facilitating
the transactions.

Online gambling among youth increased between 2004 to 2005,
according to a study by the Annenburg Public Policy Center of the
University of Pennsylvania. The study reported that the weekly
online gambling rate increased from 1.1 percent in 2004 to 2.4
percent in 2005; also, in 2005, 19.6 percent of males 14-22 gambled
on the Internet monthly.

“In general, the amount of people that report that
Internet gambling is their primary problem has risen,” said
Keith Whyte, executive director of the National Council of Problem
Gambling.

Arkadiy Onikul, a second-year history student at UCLA, said he
plays three to four hours a day and goes up or down $600-$700 a
day.

But Onikul is not fazed by any future illegality.

“If the game’s still profitable, definitely
I’ll still play whether or not its legal,” Onikul
said.

Though many players may gamble for hundreds, there are many more
who play for much less.

First-year chemistry student Garni Arakelian said he wins or
loses between $60-$80 in a day, playing online for one to two
hours, five times a

week.

He said he does not think that if it became illegal it would
stop him from gambling online if he could, unless there were large
consequences.

“It’s just easy money,” he said.

While the illegality of online gambling may not deter some
students from attempting to continue to play, restrictions on
financial transactions may pose more of problem.

The Leach bill tries to stop gamblers from using American
accounts to transfer funds to overseas gambling companies.

Tony Correia, a second-year physics student, has already
circumvented some restrictions on financial transactions.

He said his current bank, Bank of America, does not allow him to
buy in to any gambling site, so instead he goes through a financial
intermediary, neteller.com, which is based outside the United
States.

If the bill is passed, companies like Neteller would have to
separate their company between gambling and nongambling operations
if they wanted to continue doing business with the U.S., Borden
said.

Going after intermediaries in other countries or convincing
other countries to act upon American qualms with gambling is
difficult, said Daniel Hunter, assistant professor of legal studies
at Wharton School of the University of Pennsylvania.

But Hunt added that going after the financial intermediaries
within the U.S. “attacks the problem in the right way, to the
extent that it’s a problem.”

Though companies like Neteller may be based outside of the
country, “in the end you have to have some kind of payment
out of an American account,” he said.

By making it necessary to use intermediaries between American
accounts and offshore gambling sites, it will be more cumbersome to
engage in online gambling, likely reducing the number of casual or
short-term Internet gamblers, Hunt said.

“(Banks) are going to be very anxious to stop any sort of
transactions,” he said.

As soon as they find out that any site is associated with online
gambling, they will comply immediately, he said.

But not everyone is convinced that such legislation would
curtail online gambling.

“Money is always going to find a way,” Whyte said.
“People will find a way to be able to gamble online (by
using) all sorts of new means of payment.”

If any new prohibitions were to pass, the loss of the casual
player Hunt referred to might have broader consequences by making
online gambling less appealing for the better players and possibly
increasing visits to casinos by both casual and serious
players.

“The reason the games are so profitable is because
it’s so readily accessible and anyone can put money on the
account,” Onikul said.

But the if the game becomes illegal, the loss of the casual
players might make it harder to win.

“If it becomes illegal to play, it will dry the game up.
Good players don’t want to play with other good
players,” Onikul said.

Both Onikul and Correia said they would go to casinos more often
if online gambling became illegal.

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