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WASHINGTON – The House approved a bill last week to prevent the use of credit cards and fund transfers for illegal Internet gambling. Congressman Jim Leach (R-Iowa), a primary sponsor of the bill, said, “The ball is now in the Senate’s court. Hopefully this multi-year effort will end this year with the enactment of strong anti-Internet gambling legislation.” The Goodlatte-Leach Internet Gambling Prohibition and Enforcement Act (H.R. 4411) was approved 317-93 after a compromise was struck between competing legislation by Leach and Bob Goodlatte (R-Va.). NAFCU Associate Director of Legislative Affairs Dillon Shea explained, “Our concern was that it doesn’t put undue restrictions on financial institutions.” NAFCU wanted a safe harbor provision for financial institutions so that they would not be liable if a credit union credit card was used in Internet gambling after reasonable measures to identify the parties to the transaction, which was included. “The Goodlatte-Leach bill combines two complementary approaches. First, it cuts off the flow of money to Internet gambling websites,” House Financial Services Committee Chairman Mike Oxley (R-Ohio) stated. “These websites, almost always located on some far-flung Caribbean island, will no longer be allowed to accept bettors’ credit cards, fund transfers or checks drawn on American banks. Second, H.R. 4411 clarifies that the 45-year-old Wire Act covers illegal Internet gambling. As a former FBI agent, I can attest to the fact that the Wire Act is an effective tool in stopping crime and this bill will help us make better use of it.” CUNA Vice President of Legislative Affairs Dean Sagar noted that this bill “affects credit unions indirectly as members of the payment networks.” Betting on credit cards can also lead to addiction, bankruptcy, and crime, according to the Financial Services Committee’s statement. Shea added, “It really does not look like it’s going to move in the Senate this year.I think they have other priorities.” Financial Institutions and Consumer Credit Subcommittee Chairman Spencer Bachus (R-Ala.) said of the legislation, “Some claim illegal Internet gambling is a victimless crime. In fact, the very real victims of illegal Internet gambling are underage gamblers, who are by the tens of thousands becoming compulsive, addictive gamblers. It is a mushrooming epidemic, leaving in its wake suicides, crime, and financial and family tragedies.” This year alone, Americans will send $5.9 billion to unregulated, offshore, online casinos totaling nearly half of the $12 billion bet worldwide on Internet gambling. Currently there are more than 2,300 Internet gambling sites. The Goodlatte-Leach Internet Gambling Prohibition and Enforcement Act would: *Update the Wire Act to clarify that it covers all types of gambling and all types of communication facilities; *Increase the maximum penalty for Wire Act violations from two to five years in prison; *Preserve states’ rights to regulate gambling solely within state borders; *Cut off the flow of money to Internet gambling Web sites by regulating payment systems; *Authorize state and federal law enforcement to seek injunctions against persons who facilitate illegal Internet gambling; and *Advance international cooperation in law enforcement efforts against illegal gambling and related money laundering. [email protected]

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