Press release from Indiana Attorney General Greg Zoeller:
Attorney General opposes Internet gambling bills before Congress
Zoeller: Federal bills could preempt state authority over online gaming(INDIANAPOLIS) – Proposals before Congress to loosen restrictions on Internet gambling by licensing online gaming operations through the federal government would tread on the state’s authority and send the wrong message, Indiana Attorney General Greg Zoeller said.
“As attorney general, my job description requires me to defend the ability of our state to pass its own state laws and not have them nullified or preempted by the federal government. The proposals before Congress would likely undermine the gambling enforcement powers of states,” Zoeller said. “While serious objections to this legislation have been raised by those in professional sports, college athletics and other groups — who warn that licensing online gaming will open the floodgates to gambling addiction by youth and adults, ruined credit and the potential for corruption and organized crime — there are other valid reasons to be concerned about this legislation.”
At issue are H.R. 2267, the proposed Internet Gambling Regulation, Consumer Protection and Enforcement Act, and some enabling legislation, H.R. 4976, the Internet Gambling Regulation and Tax Enforcement Act of 2010. Directed at an industry that potentially has many online players and often operates through offshore entities, the legislation would allow online gambling sites to obtain federal licenses through the U.S. Department of Treasury and legally operate domestically. Revenue gambled by online players would be federally taxed, and participating states could collect a 6 percent cut of the money wagered by players within that state. The U.S. House Ways and Means Committee in Congress heard both proposals in May.
A letter Zoeller sent to the chairman and ranking member of the committee notes the proposals would undercut a federal law Congress passed just four years ago: the Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA) that was supported by most state attorneys general and had created a complementary working relationship between state and federal gambling regulation.
That would change if the bills now before Congress passed in their current form. H.R. 2267 would allow states to opt out of extending Internet gambling; and it would attempt to impose safeguards against illegal conduct. But once Internet gambling operators obtained federal licenses, they would be shielded from prosecution or enforcement under state law. Although promoted as potentially raising billions of dollars in revenue for the federal government, the legislation has drawn the concerns of opponents, who counter that the optimistic revenue predictions hinge on state regulation of gambling being minimized.
“While I recognize that Congress considers various scenarios for plugging the deficit in the federal budget, our concern is that licensing and taxing Internet gambling in this way would circumvent and preempt the autonomy of state government,” Zoeller said. “Rather than a one-size-fits-all federal approach, states should be free to decide for themselves whether to endorse online gaming at the state level and not have it forced upon them federally.”
Instead, Zoeller said the current regulatory framework through the UIGEA and the Indiana Gaming Commission is sufficient for now, so Congress first should do no harm and not pass the federal legislation.
While the current wording of H.R. 2267 still would prohibit Internet gambling operators from offering sports betting, various athletic organizations have expressed concern that federally licensing other forms of online gambling potentially could erode restrictions on online sports betting.
“The NCAA has long opposed sports wagering because it threatens student-athlete well-being and the integrity of competition. The NCAA has taken a national leadership role on educating student-athletes on the issues of sports wagering, including the growing practice of Internet gambling. These efforts are increasingly important as the number of student-athletes that have placed a sports bet over the Internet has nearly doubled in four years, according to the 2008 NCAA National Study on Collegiate Sports Wagering Study. The NCAA believes sports should be appreciated for the benefits of participating or watching, not the amount of money wagered on the outcome of the game,” said Rachel Newman Baker, Director of Agent, Gambling and Amateurism Activities for the National Collegiate Athletic Association.
The National Football League echoed those concerns.
“In May 2009, the NFL along with the other professional sports leagues and the NCAA, expressed opposition to Congress regarding pending Internet gambling bills that could override federal and state statutes against sports betting. Our concerns remain unabated and unaddressed. We continue to oppose these measures,” the NFL said in a statement.
Zoeller sent the letter to the chairman and ranking member of the U.S. House Ways and Means Committee, spelling out his objections to H.R. 2267 and H.R. 4976. Zoeller’s letter also was distributed to the members of the Indiana congressional delegation.