HomePublicationsNewsletter ArchiveVolume 19Issue 20Senate Subcommittee Holds Hearing on Potential Expansion of Internet Gambling

On Wednesday, July 17, 2013, The United States Senate Subcommittee on Consumer Protection, Product Safety and Insurance held a hearing entitled, “The Expansion of Internet Gambling: Assessing Consumer Protection Concerns.”  In light of the recent enactment of intrastate online wagering schemes in Nevada, New Jersey and Delaware, the stated goal of the hearing was to “explore the consumer protection implications of the legalization of intrastate online gaming.”  In advance of the hearing, Committee Chairman Jay Rockefeller (D-WV) stated that:

“[i]nternet gambling is a multi-billion dollar industry that comes with some serious risks, including the potential for money laundering used for terrorist financing. This alone demands that we take a hard look at what a growing Internet gambling industry means as more states have recent laws permitting online wagering. We’ve also got to take a hard look at consumer protections, and how we’re going to fix any existing gaps that allow underage gambling or otherwise leave consumers vulnerable to fraud and abuse.”

The hearing included testimony from Chuck Canterbury, National President of the Fraternal Order of Police, and Jack Blum, a Washington attorney, both of whom stressed that an overall federal regulatory scheme needs to be put into place as online gaming expansion continues because state and local law enforcement are not equipped to handle the potential money laundering and terrorist financing issues that could arise.  Thomas Grissen, the CEO of Daon, a biometrics and enterprise security firm, testified that there is technology that is available to help combat underage and illicit online wagering, including utilizing photograph and voiceprint records to confirm patron identities.  In response, Sen. Kelly Ayotte (R-NH) stated, “[w]hat we have here is a free for all.  Shame on us if we don’t get something done on this. When I think about the issues of money laundering, terrorism [and] drug trafficking…I hope this is something we move on very quickly.”

Though there is currently no online wagering bill before the Senate, two online gaming expansion bills were introduced in the House of Representatives earlier this year. House Resolution (HR) 2282, introduced by Rep. Peter King (R-NY), would legalize and regulate all forms of internet wagering, except sports betting, while HR 2666, introduced by Rep. Joe Barton (R-TX), seeks to legalize and regulate only online poker.  On the Senate side, Senators Harry Reid (D-NV) and Dean Heller (R-NV) have hinted that they may introduce an online gambling bill in the Senate yet this year.


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