By Shari Geller
Today, Rep. Peter King (R-NY) introduced the “Internet Gambling Regulation, Consumer Protection and Enforcement Act of 2013” which will legalize online gambling and address the regulatory uncertainty surrounding online gambling resulting from a December 2011 Justice Department ruling.
After years of prohibiting online gambling, DOJ’s 2011 ruling made online gambling of every type, except sports betting, legal at the federal level if it is lawful at the state level. But while online is legal, it is not uniformly regulated, the operators are not licensed, and consumers lack protection from fraud and abuse. With states approaching this issue piecemeal, it can lead to conflicting or inconsistent laws from state-to-state, varying levels of consumer protection, and a perverse incentive for a race-to-the-bottom on standards to attract gaming operators and revenues.
The current situation is not in the best interest of the American people. “A common federal standard will ensure strong protections for consumers, protect against problem and underage gambling, and make it easier for businesses, players, lawmakers, and regulators to navigate and freely participate,” said Rep. King.
The Internet Gambling Regulation, Consumer Protection and Enforcement Act of 2013 will remedy this situation by establishing a system of licensing and regulation at the federal level, while grandfathering any existing state activity that is limited to the geographic confines of the state, such as the laws in place now in Nevada, Delaware, and New Jersey. Online gambling on horseracing, currently permitted in the U.S. under the Interstate Horseracing Act, would also be grandfathered in. Specifically, the bill:
- Establishes a uniform federal system for states that choose to participate, enabling adults to gamble online, with controls to protect against compulsive gambling and to prevent underage persons from gambling.
- Creates an Office of Internet Gambling Oversight in the Department of the Treasury, and establishes criteria for state and tribal bodies to carry out licensing activities on behalf of the federal government. The federal government retains overall jurisdiction and oversight, but relies on state expertise for licensing of operators, enforcement and other activities, under a common federal standard.
- Gives any state or tribe that does not wish to participate in the federal interstate system the ability to opt-out and prohibit online gambling or to operate intrastate gaming within its borders as authorized under state or tribal law.
- Applies tough penalties to unlicensed operators. One major goal of this bill is to put them, and their off-shore, untaxed, unregulated services, out of business, forever.
- Shuts down money launderers and criminals seeking to use internet gambling to move funds. Regulating online gambling at a federal level will clearly separate illicit operators from law-abiding licensed operators.
You can read the bill in its entirety here.