June 8, 2007 5:22 PM PDT

Legalizing Net gambling? There's a chance

Opponents of a federal ban on Internet gambling said during a congressional hearing Friday that it would be wiser to legalize and regulate betting than prohibit it.

"In the end, adults ought to be able to decide for themselves how they spend the money they earn themselves," said Rep. Barney Frank, the Democratic chairman of the House Financial Services committee and primary backer of the legalization effort.

Friday's hearing included witnesses from companies that process online payments. In general, they echoed the arguments once used in favor of ending alcohol prohibition and that are now being invoked to decriminalize marijuana: It's better to legalize, tax and carefully regulate an industry than let it flourish with far less oversight in the black market.

Some countries already do just that. In the United Kingdom, for instance, Internet gambling is legal and strictly regulated. Some of the larger online casino operators are publicly traded on the London Stock Exchange.

"On the basis of my experience I can unequivocally state that Internet gambling can be regulated, and that abuses can be effectively regulated and controlled," said Jon Prideaux, a consultant who until last year was the head of Visa Europe's Internet arm.

A law that President Bush signed last year tried to eliminate many forms of online gambling by targeting Internet service providers and financial intermediaries, namely banks and credit card companies that process payments to offshore Web sites. The bill never received a formal vote in the entire Congress but instead was glued onto an unrelated port security bill that the Senate unanimously approved.

Now the pro-legalization forces are trying to marshal a counterattack. Frank introduced a bill in April that would replace the current broad prohibition with strict regulations--including criminal background checks and financial disclosure--imposed on companies that offer legal Internet gambling. (It's called the Internet Gambling Regulation and Enforcement Act.)

Texas Rep. Ron Paul, a 2008 Republican presidential contender who topped CNET News.com's technology scorecard last year, said adults should be allowed to make up their own minds about whether to gamble. He said he was a strong supporter of Frank's bill "to restore the rights of Americans to decide for themselves whether to gamble online."

Gerald Kitchen, the chief executive of U.K.-based SecureTrading Group, said his company is a payment service provider that processes a wide variety of financial transactions, including ones related to online gambling. He said SecureTrading's system has been reviewed by banks including Barclays, Lloyds and the Royal Bank of Scotland, and provides protections against money laundering, underage gambling and compulsive gambling.

"There are ways to protect against these exact harms and ills that the opponents of Internet gambling regularly cite as reasons to prohibit Internet gambling," Kitchen said.

But it's too early to say whether the bill will receive a favorable committee vote. For one thing, the top Republican on the panel, Rep. Spencer Bachus from Alabama, offered an impassioned defense of criminalization.

"Some people claim that illegal Internet gambling's a victimless crime," Bachus said. In reality, he warned, it's a "mushrooming epidemic leaving in its wake suicides, crime, family tragedies."

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12 comments

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If Barney Frank only thought that same way about social programs
"In the end, adults ought to be able to decide for themselves how
they spend the money they earn themselves," said Rep. Barney
Frank, the Democratic chairman of the House Financial Services
committee

So he believes I should be able to gamble my money away and let
the government squander it as well.
Posted by sfrank212 (12 comments )
Reply Link Flag
Stick to reporting on tech, CNET.
CNET, please stick to reporting on technology. Your political reporting is strictly amateur-hour and stale. It also seems as if you haven't even read the bill in question.

And with President Bush still in office, this bill was dead on arrival, so your story provides no justification for the "There's a chance" headline.

This story is also really stale - what has changed since Frank's bill was introduced some months ago?

Even if Frank's bill was passed in a future Democratic administration, it has exemptions that allow individual states to opt-out, which would make any online casino here in the States impractical.

Here's a more specific analysis of Frank's bill, on Online Gambling News: <a class="jive-link-external" href="http://www.ogpaper.com/news/news-0283.html" target="_newWindow">http://www.ogpaper.com/news/news-0283.html</a>

Note that the linked article was written back in April. You're almost two months late on this story, CNET.
Posted by Huidafa (1 comment )
Reply Link Flag
correction
First, legalization movements take a while to build, which Rep. Frank knows firsthand (I've been to NORML conferences he's spoken at). So your point about Bush is narrowly true and broadly false.

Second, the reason we published this story today is because the hearing was today.

Third, we also covered Frank's bill back in April, when it was introduced, and there's a link to it in the story that you would have seen if you had read it more carefully:
<a class="jive-link-external" href="http://news.cbsi.com/Democrat+proposes+lifting+federal+ban+on+Net+gambling/2100-1028_3-6179525.html" target="_newWindow">http://news.cbsi.com/Democrat+proposes+lifting+federal+ban+on+Net+gambling/2100-1028_3-6179525.html</a>

Perhaps, "huidafa," you should stick to not trying to comment on posts when you're getting your facts wrong.
Posted by declan00 (848 comments )
Link Flag
I have a really good gamble
Lets refarm ourselves black.
It would be grooving and we woulden't know what the problem was with life anymore.
Posted by wildchild_plasma_gyro (296 comments )
Reply Link Flag
Think about the parents!
This will no dout lead to "legalized" underage gambling. What would stop a child from opening a debit account and use a "fake" ID to use the sites? Or just taking its parent's credit card and ID to gamble? That one advantage casino's have, the can see who's gambling.

And you know the sites won't give your money back if your kids used your credit card. They just have to say, "We have no garentee that it wasn't you who lost the $30,000." And the courts will have to side with them, even if it was your kid did it.

This is a financial nightmare waiting to happen!
Posted by aka_tripleB (2211 comments )
Reply Link Flag
If YOUR kid . . .
. . . is gambling on-line with YOUR credit card long enough to
loose $30,000, maybe YOU, as a parent, should be spending more
time monitoring what exactly YOUR child is doing on the internet!

Gambling should probably be the least of your worries.
Posted by K.P.C. (227 comments )
Link Flag
Not a business's job
It's not the responsibility of online casinos to protect people from their children or themselves, and to attempt to make potential victims out of parents is ludicrous. Pornographic websites use disclaimers, and similar regulations would undoubtedly apply to gambling websites. This is not to mention that many gambling sites require a software installation which can be regulated with very little effort.

It should not be the Government's job to protect people from possible ways of losing their money online, especially when the avenue exists offline. The problem for government officials in legalizing and regulating online gambling is that it provides a viable alternative to the most ridiculous gambling occurring daily that is directly funded by government: The Lottery.

The ban to me seemed more out of a fear of attempting to tackle regulation than it was any kind of moral victory against the gambling demons.
Posted by spm82 (59 comments )
Link Flag
Online gambling more controllable
Online gambling and poker is far easier to regulate than the illegal gambling and poker that takes place in various dirty backrooms of restaurants and the like. So it is better to switch gamblers and poker players over to trackable and safe operations online.

It could be argued they are even safer than the legal casinos dotted about, which attract criminals like honey attract bears.
Posted by JadedGamer (207 comments )
Reply Link Flag
Gambling on the internet should be legalized. The US government has no right telling US citizens what they can or can't do online. Freedom of speech and liberty have be incringed.
http://www.freeonlineslotsmachines.com
Posted by docsharp01 (8 comments )
Reply Link Flag
 

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