Net bet ban talk centers on tech
WASHINGTON — Witnesses at a House hearing Friday argued about whether technology exists that could effectively regulate Internet gambling if Congress repeals a ban on using credit cards, checks and electronic funds transfers in online betting.
Jeff Schmidt, chief executive officer of Authis, an online identification company, said there is a 20 percent failure rate in verifying the age of people using the Internet.
“These technologies are not reliable in their current form today,” Schmidt said.
Three other witnesses — Jon Prideaux of Asterion Payments; Gerald Kitchen of Secure Trading Ltd. and Michael Colopy of Aristotle — said technology is available to prevent underage and compulsive gambling, money laundering and fraud.
“It exists, it is being utilized, and it is working very effectively,” Kitchen said.
The hearing by the House Financial Services Committee followed the introduction of two more bills this week to repeal the banned use of credit cards, checks and electronic fund transfers for Internet gaming. The ban was attached to a port security bill last year in the congressional session’s waning days.
Rep. Barney Frank, D-Mass., the committee’s chairman, is sponsoring one of the four bills that would lift the ban.
“I have no quarrel with people who think that gambling is wrong,” Frank said. “My quarrel is with people, who thinking that gambling is wrong, want to prevent other people from doing it.”
Frank claimed the ban amounts to a substantial interference with the Internet, a view shared by presidential candidate Ron Paul of Texas who is one of the committee’s Republicans.
“Even for good reasons, regulating the Internet can backfire on us,” said Paul, who is a co-sponsor of Frank’s bill.
Speaking in favor of the ban, the committee’s ranking Republican, Spencer Bachus of Alabama, cited statistics showing an increase in compulsive gambling among teen-agers.
“(The ban) does not prohibit anything that is not already illegal,” Bachus said.
Another committee member, Rep. Bob Wexler, D-Fla., said the United States already allows Internet gambling on horse racing and state lotteries. Wexler introduced a bill Thursday that would exempt poker from the ban.
The World Trade Organization cited the exemption for horse racing in finding the United States was in violation of international treaty obligations, Frank said.
Bachus noted the WTO has said Frank’s bill also would violate international treaty obligations by allowing the National Football League and other professional sports leagues to continue prohibiting wagers on their games.
Nevertheless, the NFL, the National Basketball Association, Major League Baseball and the National Hockey League oppose Frank’s bill.
Rep. Jon Porter, R-Nev., said Friday’s hearing underscored the need for a study of Internet gambling.
“It is critical that thorough, balanced information is available to Congress before there is any legislative action,” said Porter, who is co-sponsoring a bill with Rep. Shelley Berkley, D-Nev., to require a one-year study of Internet gambling.
A fourth bill, introduced Thursday by Rep. Jim McDermott, D-Wash., would tax Internet gambling companies if they are licensed and regulated in the United States.
