Attorney General Gansler Joins Attorney General McCollum in Opposition of Federal Legislation Easing Restrictions on Internet Gambling Companies

BALTIMORE, MD (October 1, 2007) – Attorney General Douglas F. Gansler, together with Florida Attorney General Bill McCollum, sent a letter to Congressman Barney Frank and Congressman Spencer Bachus, chairman and ranking member, respectively, of the House Committee on Financial Services, expressing grave concerns about H.R. 2046, the “Internet Gambling Regulation and Enforcement Act of 2007.” H.R. 2046 would replace state regulations of Internet gambling with a federal licensing program that would permit Internet gambling companies to do business with U.S. customers – a move Attorney General Gansler and Attorney General McCollum believe would undermine States’ traditional powers to make and enforce their own gambling laws. Under the proposed legislation, the Department of Treasury would alone authorize and regulate the federal licenses, marking the first time in history that the federal government would be responsible for issuing gambling licenses.

“H.R. 2046 would throw open the doors of the United States and allow for the greatest expansion of legalized gambling in American history,” said Attorney General Gansler. “This attempt to divest the States of their gambling enforcement power is sweeping and unprecedented. We oppose this proposal, and any other proposal that hinders the rights of States to prohibit or regulate gambling by their residents.”

To help combat the skirting of state gambling regulations by Internet gambling companies, 49 Attorneys General wrote to the leadership of Congress in March of last year, urging the passage of the Unlawful Gambling Enforcement Act of 2006. Congress enacted the legislation, ensuring that the authority to set overall gambling regulations and policy remains where it has traditionally been most effective – at the state level.

Less than a year later, H.R. 2046 would undo the progress achieved with the passage of the Unlawful Gambling Enforcement Act of 2006 by legalizing Internet gambling in each State, unless the Governor clearly specifies existing state restrictions barring Internet gambling in whole or in part. A State may then “opt out” of legalization for all Internet gambling or certain types of gambling. However, the opt-out for types of gambling does not clearly preserve the right of States to place conditions on legal types of gambling. In addition, the opt-outs are deceiving in that they will likely be challenged before the World Trade Organization – an organization that has already demonstrated hostility towards U.S. restrictions on Internet gambling.