Politics and the Law of Gambling

written by I. Nelson Rose

#79 © Copyright 2001. All rights reserved worldwide. Gambling and the Law® is a registered trademark of Professor I. Nelson Rose, Whittier Law School, Costa Mesa, CA.

Politics has always played an important role in the making of gaming law. But one of the most blatant attempts to use, or rather to misuse, the political system in the name of controlling gambling took place following the atrocities of September 11th.

Representative James Leach (Iowa-R.) has been trying, unsuccessfully, for years to push his “Unlawful Internet Gambling Funding Prohibition Act” through Congress. The bill would make it a crime to transfer funds electronically, as with a credit card, in connection with any “illegal” Internet gambling.

Leach managed to insert his proposal into the recent major anti-terrorist bill. Through some political sleight-of-hand, he convinced the entire House of Representatives to make his war on Internet gambling part of the war on terrorism.

He did this through political maneuvering which was, well, not entirely honest.

In prior hearings there had been some testimony by the FBI that illegal Internet gambling sites may have been used for money laundering. According to the Financial Services Committee of the U.S. Congress, “The FBI currently has two pending

cases involving Internet gambling as a conduit for money laundering, as well as a

number of pending cases linking Internet gambling to organized crime.” Of course, this is out of billions of transactions.

In completely unrelated hearings, the CIA has shown that Islamic extremists have used money laundering to help fund their terrorists attacks.

Leach issued a statement which put the two facts together, giving the false impression that somehow Muslim terrorists are using Internet gambling for money laundering. Leach called his provision critical to the battle against terrorism, because Internet casinos present “the greatest potential for money laundering that exists in the world.”

The idea is ridiculous. Even the FBI and CIA have said there is no evidence that Islamic terrorists have ever had any connection with online gambling.

But, the anti-terrorist bill was rushed through Congress without the usual hearings and scrutiny given proposed laws. Leach knew how to use the political system and had the House version of the anti-terrorist bill include his language: “No person engaged in the business of betting or wagering may knowingly accept, in connection with the participation of another person in unlawful Internet gambling,” financial instruments such as checks, credit cards or electronic fund transfers.

But it was also politics that defeated him. The U.S. Senate apparently did not believe terrorists like Osama bin Ladin were using Internet gambling to launder money: By a vote of 96 to 1, the Senate approved an anti-terrorist bill which said nothing about online gambling.

The proposal to add additional paperwork for certain online financial transactions that happened to be connected with gambling did not sit well with credit card companies, banks, especially politically powerful banks in Texas, and the President. Leach’s idea began to drag down the entire anti-terrorist bill, which mean it had to go.

The attacks on September 11th called for a rapid response. A consensus quickly developed that the normal rules of legislative horse-trading did not apply and that nothing should get in the way of getting Osama and the other Muslim bastards. As White House spokesman Jimmy Orr put it, “The goal was to get a clean bill which focused on the issues at hand passed as soon as possible.”

The reactions of Leach and other opponents of Internet gambling were extreme and slightly bizarre. They had become so emotionally involved with their crusade that they lost sight of the greater goal, to end world terrorism.

Calling upon Attorney General John Ashcroft to continue to use existing laws to fight Internet gambling, Leach condemned the entire House of Representatives for agreeing with the Senate to delete the anti-gambling provisions: “I consider this to be an affront to the committee, and I also consider this to be an assault on basic judgment. I hoped there would be greater courage and greater will in this body on the

issue of Internet gambling.”

Rep. Frank Wolf (R-Va.) went even further, saying that removing the provision restricting electronic funding of Internet gambling from the anti-terrorist bill, “is an

indictment of this institution.” Wolf then went completely off the deep end: “Gambling is beginning to destroy and fundamentally corrupt this country. It is bringing about greater divorce, greater corruption and now we see the influence of it coming into this chamber.”

I am surprised no one challenged Wolf to a duel. Look at his last statement.

1) Islamic terrorists are using Internet gambling;

2) This gambling is “bringing about . . . corruption,” and influencing “this chamber,” meaning the U.S. House of Representatives.

The only logical conclusion from Wolf’s statement is that he is asserting that members of Congress have been taking money from Osama bin Ladin to vote against Internet gambling.

Sometimes, even in politics, it is best to think twice before you open your mouth.

[Professor Rose can be reached at his Web Site: www.GamblingAndTheLaw.com]


I. Nelson Rose

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