House panel approves Internet gambling ban

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The U.S. House Judiciary Committee approved legislation on Thursday aimed at banning Internet gambling, an estimated $12 billion industry.

The measure would update and expand existing law to cover all forms of interstate gambling in the United States and would bar a gambling business from accepting payment in the form of credit cards, checks, wire and Internet transfers.

It would also prohibit gambling on an estimated 2,300 Internet gambling sites, many run by offshore companies, and also require banks to block gambling transactions by customers, which the industry has argued would be difficult to identify.

Despite the committee's approval, 25-11, it remains unclear whether the legislation will reach floor votes in the House and Senate this year. Congress has a relatively few work days left in 2006 because of the November congressional elections.

"The legislation is badly needed because ... the amount of money going to these illegal unregulated offshore enterprises has quadrupled" in the past few years, said Rep. Bob Goodlatte (news, bio, voting record), the author of the legislation and a Virginia Republican.

Under U.S. law, interstate gambling over telephone wires is already illegal and other gambling is banned unless regulated by the states.

"In the United States, gambling is essentially illegal unless regulated by the states. This is a measure to work through that to make sure that the states are indeed protected in their right to continue to regulate gambling," Goodlatte said.

Some Democrats objected to the measure. They said it would do little to prevent underage gambling and it unfairly placed a regulatory burden on local banks to comply.

"I believe there are more effective Internet gambling regulatory approaches," said Virginia Democrat Bobby Scott.

The poker industry, which has exploded in recent years, argued that the bill unfairly targets its game while legalizing online betting for horse racing, Internet lotteries and certain fantasy sports.

"If games of chance are given a free pass in this bill, it makes no sense that a skill game like poker should be banned. Congress should not be picking online winners and losers," said Poker Players Alliance president Michael Bolcerek.