Dispatches from the Creation Wars

The House Financial Services Committee refused to advance a bill that would require the government to define what is and is not illegal online gambling so that banks and credit card companies could have some guidance on which types of transactions it was required to block under the Unlawful Internet Gambling Enforcement Act of 2006. They voted 32-32, which means the bill dies without going to a floor vote.

The problem is that the UIGEA requires banks, credit card companies and other financial services companies who facilitate cash transfers to block any and all transfers to websites that allow illegal online gambling, but they didn’t actually define what was and wasn’t illegal online gambling. The Bush administration claims that any form of gambling online not specifically authorized is illegal, but the courts have ruled that only online sports betting is illegal. This has created all sorts of problems implementing that legislation:

The Federal Reserve and the Treasury Department have been unable to finalize rules to implement the ban because Congress didn’t clearly define online gambling when it passed legislation less than two years ago…

Banks and other financial institutions have complained that they are being forced into a law enforcement role because the Internet gambling ban prohibits them from accepting payments to settle online wagers without giving them a clear set of rules.

“The financial institutions are in the position of being told not process bets, but it’s not clear what is legal and what is illegal,” said Rep. Barney Frank, D-Mass., the committee’s chairman. He said financial institutions had been given “a job that is undoable.”

Naturally, the idiots who opposed the bill just talked about how horrible gambling is:

The committee’s top Republican, Rep. Spencer Bachus of Alabama, argued that gambling is the fastest-growing addiction in the United States and having it online makes it accessible to children.

“The banks have decided that this is a financial burden,” Bachus said. “We have decided, on the other hand, that our children are worth protecting.”

That’s not the issue, you moron. If you think it’s important to block these transfers, then give the companies who have to do it some actual legal definitions so they can block them. The moral puritans don’t want to do that because they know that legally they have no leg to stand on; under the Wire Act, only sports betting is illegal to do online. And they want it to remain unclear precisely so that the financial institutions will do what they’re already doing and just block any transfer to any online gambling site.

If they made clear what the law actually says, then those companies would be legally in the clear to only block transfers to websites that feature online sports betting. That would make it possible for the online poker sites that pulled out of the American market to reopen to American customers. The moral puritans are deliberately refusing to define the law in order to force private companies to block as much as possible to avoid possible legal problems. This is a clear dereliction of their duty as legislators.