Ninth Circuit Court of Appeals Judgeship and Reorganization Act of 2005

Mr. Speaker, I yield myself as much time as I may consume.

Mr. Speaker, I rise in support of H.R. 4411, the Internet Gambling Prohibition Act.

I would like to thank Mr. Leach and Mr. Goodlatte for their hard work on bringing this bill to the House floor. It certainly has not been an easy task.

I would like to thank Mr. Frank, our ranking member on the Financial Services Committee, for the opportunity to manage this debate. Even though he and I do not see eye to eye on this legislation, I appreciate and respect the fact that we have agreed to disagree, and I welcome a healthy debate on enforcement of the illegal Internet gambling laws.

Internet gambling is a growing problem in the United States, particularly among young people and college students. It is known to destroy families, marriages and entire lives. As so aptly put by University of Illinois Professor John Kindt, ``You just click the mouse and lose your house.''

This legislation makes clear that we are serious about enforcing our Internet gambling laws that are already on the books. It takes a very important step forward, and we have worked very hard on the Financial Services Committee over the last few Congresses to advance this measure.

This bill cuts off the flow of money to Internet gambling Web sites by regulating payment systems. The Department of Treasury and the Federal Reserve will jointly develop policies and procedures for identifying and preventing financial transactions related to illegal Internet gambling. Payment systems will be required to comply with these regulations.

Even when criminal law cannot be enforced, the Federal Government's jurisdiction over financial systems can nevertheless cut off the money sources for these illegal businesses.

I believe we should mean what we say when it comes to Internet gambling. If we are to keep laws on the books that prohibit Internet gambling, then we should take steps to enforce it. And by cutting off the flow of money, we can accomplish just that.

As was previously noted, this bill is supported by 48 of the 50 State attorneys general, by the NCAA, the NBA, the NFL, the MLB and the NHL. It is a good bill and a commonsense approach to a growing problem. I urge my colleagues to end the flow of money to illegal Internet gambling Web sites, and I urge passage of this bill.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I yield 4 minutes to the gentleman from Massachusetts (Mr. Frank), the ranking member on the Financial Services Committee.

Mr. Speaker, I yield 2 minutes to the gentleman from Texas (Mr. Paul).

(Mr. PAUL asked and was given permission to revise and extend his remarks.)

Mr. Speaker, I have no further requests for time, and I reserve the balance of my time.

Mr. Speaker, I yield myself such time as I may consume.

I just have to clarify a few things that have been said. First of all, this bill is about enforcing the law that is already on the books. This is not about prohibiting gambling. States can regulate their own gambling. They can regulate Internet gambling. This is about enforcing the laws.

We had a hearing in Financial Services where the FBI Director was in front of us and he said this is a significant vehicle for money laundering. GAO reports that Internet gambling can be a significant vehicle for money laundering proceeds because they can move large quantities of money around rapidly to obscure criminal origins. Internet gambling generates over $10 billion in revenues. Nearly 80 percent of those revenues are impossible to account for because illegal gambling sites are located in jurisdictions with no regulation on gambling.

This allows States the prerogative to decide what kind of gambling should be permitted or forbidden within the State borders. Some States say you cannot gamble; other States say you can. The attorneys general of 48 States have said they are in support of this legislation. It will make online gambling impossible for minors. Minors cannot go into brick and mortar facilities right now. It should, in fact, make it inaccessible for minors.

It recognizes the jurisdictional impediments for prosecuting offshore gambling businesses. Financial systems will be required to block money flow to these businesses, cutting off the oxygen for these illegal transactions.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I yield myself the balance of my time to close.

First of all, in my opening statement there was a person I forgot to thank who has carried this banner in Financial Services for a long time, Mr. Bachus from Alabama. I thank you for all the hard work you have done on this.

In closing, Mr. Speaker, I would like to share some interesting facts from an article written for the New York Times by Matt Schwartz.

Researchers say that Internet gambling is addictive. Players say it is addictive. In fact, the action, the act of placing a bet, and the high that follows has been identified by neurologists as a similar high to doing a line of cocaine. Blood rushes to the face, the hands moisten, and the mouth dries up.

Internet gambling has also dramatically changed the face of addiction. An estimated 1.6 million of the 17 million U.S. college students gambled online last year, mostly on poker. According to a study by the Annenberg Public Policy Center, the number of college males who reported gambling online once or more a week quadrupled in the last year alone. This is a growing addiction.

The stereotypical compulsive gambler is now much more likely to be a teenager or a college student. Before

the rise of online gambling, the typical compulsive gambler was in his thirties or forties and took a decade to run the destructive course. Now online gamblers are running the same course in 18 months or less.

These facts are disturbing and highlight the need for action by this Congress. Again, this bill is a commonsense approach that cuts off the flow of money to Internet gambling Web sites by regulating the payment systems.

And, again, we have to remember these laws are already on the books. What we are trying to do is enforce the laws. The Department of the Treasury and the Federal Reserve will jointly develop policies and procedures for identifying and preventing financial transactions related to illegal Internet gambling. Payment systems will be required to comply with these regulations. Again, States are allowed to regulate gambling within their own States.

I urge my colleagues to end the flow of money to illegal Internet gambling Web sites, and I urge the passage of H.R. 4411.

[From the New York Times, June 11, 2006]

Chapter 2: The Gambler; The Hold-'Em Holdup

(By Mattathias Schwartz)

Greg Hogan Jr. was on tilt. For months now, Hogan, a 19-

year-old Lehigh University sophomore, had been on tilt, and

he would remain on tilt for weeks to come. Alone at the

computer, usually near the end of one of his long online

gambling sessions, the thought ``I'm on tilt'' would occur to

him. Dude, he'd tell himself, you gotta stop. These thoughts

sounded the way a distant fire alarm sounds in the middle of

a warm bath. He would ignore them and go back to playing

poker. ``The side of me that said, `Just one more hand,' was

the side that always won,'' he told me months later. ``I

couldn't get away from it, not until all my money was gone.''

In a little more than a year, he had lost $7,500 playing

poker online.

``Tilt'' is the poker term for a spell of insanity that

often follows a run of bad luck. The tilter goes berserk,

blindly betting away whatever capital he has left in an

attempt to recoup his losses. Severe tilt can spill over past

the poker table, resulting in reputations, careers and

marriages being tossed away like so many chips. This is the

kind of tilt Hogan had, tilt so indiscriminate that one

Friday afternoon this past December, while on his way to see

``The Chronicles of Narnia'' with two of his closest friends,

he cast aside the Greg Hogan everyone knew--class president,

chaplain's assistant, son of a Baptist minister--and became

Greg Hogan, the bank robber.

On Dec. 9, 2005, Hogan went to see ``Narnia'' with Kip

Wallen, Lehigh's student-senate president, and Matt

Montgomery, Hogan's best friend, in Wallen's black Ford

Explorer. Hogan, who was sitting in front, asked Wallen to

find a bank so he could cash a check, and Wallen pulled over

at a small, oatmeal-colored Wachovia. Inside, Hogan paused at

the counter for a moment and then joined the line. He handed

the teller a note that said he had a gun, which was a bluff.

``Are you kidding?'' her face seemed to say. He did his best

to look as if he weren't. With agonizing slowness, she began

assembling the money. Moments later, a thin sheaf of bills

appeared in the tray: $2,871. Hogan stuffed it into his

backpack, turned around and walked back out to the car.

The movie ended, and the trio returned to campus. Hogan

went immediately to Sigma Phi Epsilon, his fraternity, and

used some of the stolen money to pay back brothers who had

lent him hundreds of dollars. He then joined a few friends at

an off-campus pizzeria for dinner. Someone's cellphone rang,

with the news that police had stormed the Sig Ep house. No

one knew why. Hogan stayed silent. After dinner, his friends

dropped him off at orchestra practice. Allentown police

officers were waiting for him. They handcuffed him and took

him to headquarters, where he confessed almost immediately.

Hogan's first call was to his parents back home in Ohio.

They had just finished eating dinner at T.G.I. Friday's. ``He

was at the end of himself,'' Greg Hogan Sr. told me. ``He

couldn't believe he had done it. Not that he was denying

anything, but he felt like he was watching another person's

life.''

To wired college students today, Internet gambling is as

familiar as beer, late-night pizza and the Saturday night

hook-up. Poker--particularly Texas hold 'em--is the game of

choice. Freshmen arrive already schooled by ESPN in the

legend of Chris Moneymaker, the dough-faced 27-year-old

accountant who deposited $40 into his PokerStars.com account

and parlayed it into a $2.5 million win at the World Series

of Poker in Las Vegas. Throughout the dorms and computer labs

and the back rows of 100-level lecture halls you can hear the

crisp wsshhp, wsshhp, wsshhp of electronic hands being dealt

as more than $2 billion in untaxed revenue is sucked into

overseas accounts each year.

Researchers say that Internet poker is addictive. Players

say that it's addictive. The federal government says that

it's illegal. But colleges have done little to stop its

spread on campus. Administrators who would never consider

letting Budweiser install taps in dorm rooms have made high-

speed Internet access a standard amenity, putting every

student with a credit card minutes away from 24-hour high-

stakes gambling. Online casinos advertise heavily on sites

directed at college students like CollegeHumor.com, where

students post pictures of themselves playing online poker

during lectures with captions like: ``Gambling while in

class. Who doesn't think that wireless Internet is the

greatest invention ever?'' Some schools have allowed sites to

establish a physical on-campus presence by sponsoring live

cash tournaments; the sites partner with fraternities and

sports teams, even give away a semester's tuition, all as

inducements to convert the casual dorm-lounge poker player to

a steady online customer. An unregulated network of offshore

businesses has been given unfettered access to students, and

the students have been given every possible accommodation to

bet and lose to their hearts' content. Never before have the

means to lose so much been so available to so many at such a

young age.

An estimated 1.6 million of 17 million U.S. college

students gambled online last year, mostly on poker. According

to a study by the Annenberg Public Policy Center, the number

of college males who reported gambling online once a week or

more quadrupled in the last year alone. ``The kids really

think they can log on and become the next world champion,''

says Jeffrey Derevensky, who studies youth problem gambling

at McGill University in Montreal. ``This is an enormous

social experiment. We don't really know what's going to

happen.''

Greg Hogan is far from the only college student to see the

game's role in his life grow from a hobby to a destructive

obsession. Researchers from the University of Connecticut

Health Center interviewed a random sample of 880 college

students and found that 1 out of every 4 of the 160 or so

online gamblers in the study fit the clinical definition of a

pathological gambler, suggesting that college online-poker

addicts may number in the hundreds of thousands. Many, like

Lauren Patrizi, a 21-year-old senior at Loyola University in

Chicago, have had weeks when they're playing poker during

most of their waking hours. Rarely leaving their rooms, they

take their laptops with them to bed, fall asleep each night

in the middle of a hand and think, talk and dream nothing but

poker. By the time Patrizi finally quit, the game seemed to

be both the cause of all her problems and her only means of

escaping them. ``I kept on playing so I wouldn't have to look

at what poker had done to my bank account, my relationships,

my life,'' she told me.

Other addicts, like Alex Alkula, a 19-year-old living

outside Columbus, Ohio, decide to ``go pro,'' drop out of

school and wind up broke and sleeping on their friends'

couches. Alkula, who left the Art Institute of Pittsburgh

after five months, now makes his living dealing hold 'em in

private home games and organizing tournaments in bars. Having

overdrawn four bank accounts, Alkula can no longer play

online himself. But when he gets home from work at 3 or 4 in

the morning, he turns on his computer, clicks on Full Tilt

Poker and watches the players' cards flicker on the screen

until dawn. ``I can't get away from it,'' he told me. ``And

really, I don't want to. I'll keep playing poker even if it

means being broke for the rest of my life. I've fallen in

love with the game.''

In its outline, Hogan's story closely resembles that of the

stereotypical compulsive gambler. Before the rise of online

poker, however, such a story typically involved a man in his

30's or 40's and took a decade or more to run its course.

Greg Hogan, on the other hand, went from class president to

bank robber in 16 months. His fall took place not at the

blackjack table or the track but within the familiar privacy

of his computer screen, where he was seldom more than a

minute away from his next hand of poker. He'd been brought up

too well to waste himself in some smoky gambling den and knew

too much to play a mere game of chance. He wanted to compete

against his peers, to see his superior abilities yield

dollars for the first time, a transaction he equated with

adulthood. His stubborn faith in his own ability--a trait

that had served him so well through his first 19 years--

proved to be his undoing.

Today's ruined gamblers are often too young to know any

better--too young, in fact, to legally gamble in most U.S.

casinos. Until now, these young addicts were ignored by the

news media, which swooned over the top of the poker pyramid,

the Chris Moneymakers and the ESPN heroes, the guys in the

wraparound sunglasses and the cowboy hats who made the

hustler's art seem somehow noble and athletic. No one was

interested in whose losses keep the poker economy humming,

not until a Baptist minister's son robbed a bank.

A minister's eldest boy learns to perform early in life. On

Sundays, Greg's mother, Karen, would dress him and his two

brothers in matching slacks and blazers and take them and

their sister to hear Greg Sr. preach. The congregation looked

on as the boys followed Greg Jr's polite, attentive example.

Schooled at home through eighth grade, the straw-haired,

blue-eyed boy emulated his father's steady gaze, the soft but

firm quality in his voice. He saw that others would come to

rely on him if he revealed only his strongest side. When Greg

Sr. ran

for City Council, Greg Jr. enlisted his playmates to help him

campaign door to door. Neighbors began calling Greg ``the

General.'' When it came to music, Greg was like a boat on a

still pond--one small push from his parents and he'd glide on

toward the goal. Karen, a psychiatric nurse, started him on

the piano at 5. Greg Sr. worked a second job to help pay for

$50-an-hour private music lessons for his daughter and three

boys. By 13, Greg had twice played onstage at Carnegie Hall.

Music won him a scholarship to the prestigious University

School, a day school outside Cleveland, where his classmates

noticed his oddly mature ways and dubbed him ``the 30-year-

old man.'' By graduation, he'd developed something of an ego.

``Greg will always be a people person,'' wrote his adviser in

an evaluation letter. ``Perhaps he should set his sights a

little lower and just become president of the United

States.''

Hogan, who had palled around with the sons of bank

executives at his high school, threw himself into this new

environment. Even before his father had said goodbye to head

back to Ohio, Greg announced his plan to run for class

president. He played his first hands of live hold 'em with

real money that night, a way to break the ice with the guys

from his hall in the dorm lounge. A few weeks later, guided

by one of his roommate's friends, Hogan opened his first

online-poker account at PokerStars.com. He chose a screen

name that would carry his new school's banner all around the

world: geelehigh. He'd met someone from two floors down who

had lost $100--a fortune, it seemed--online. He decided to

stick to the play-money tables. Within 10 minutes, Hogan was

playing his first online hands.

A few days later he met another friend of his roommate's.

Hogan claims that he remembers only his nickname, Phys. When

he turned 21, Phys told Hogan, he would plunk down $10,000

and become the youngest player ever to win poker's greatest

prize--the World Series of Poker No Limit Texas Hold 'Em

bracelet. He then showed Hogan where he planned on getting

that kind of money. He clicked on the PokerStars icon on

Hogan's computer, typed in a user name and password, clicked

on ``Cashier.'' And there it was, Phys's ``real money''

balance: more than $160,000. Hogan clucked his tongue. ``Un-

be-lievable,'' he said, almost to himself. He knew that the

money was indeed real. All Phys had to do was click on the

``Cash Out'' button and wait two weeks, and he'd receive a

six-figure check in the mail. Four years' tuition, sitting

there like a high score. It was absurd.

The next week, geelehigh used his debit card to make a $75

PokerStars deposit. He received a $25 ``deposit bonus,''

which wouldn't clear until he'd played several hundred hands.

The money was real now, but it still felt as ephemeral as it

did at the play-money tables: $100 was a digitized chip icon,

an oval of black pixels on his computer screen. Green ovals

were $25, red ovals $5. All were smaller than a grain of

rice. When Hogan clicked on the ``Bet'' or ``Raise'' buttons,

the chips made a chik sound and floated across the glowing

table before melting into the pot. These tiny digital chips

represented money controlled by a corporation in Costa Rica.

The ``cards'' themselves were really just bits of data,

``shuffled'' by a random-number generator on a Mohawk Indian

reservation in Quebec. The nine players at Hogan's table were

scattered all over the world, each sitting alone at his

screen, trying to take money from the other eight.

Eventually, in chunks of $50, then $100, he took two summers'

earnings, money his parents had given him for books and

expenses, hundreds of dollars in loans from friends, $2,000

in savings bonds bought in his name (bonds he took from the

family safe) and turned it into digital chips: $7,500 in all.

Online, Hogan would play 60 to 100 hands an hour--three

times the number of his live games. There was no more

shuffling between hands, no more 30-second gaps to chat with

his friends or consider quitting. Each hand interlocked with

the next. The effect was paralyzing, narcotic. ``Internet

poker induces a trancelike state,'' says Derevensky, the

McGill professor, who once treated a l7-year-old Canadian boy

who lost $30,000, much of it at PokerStars. ``The player

loses all track of time, where they are, what they're

doing.'' When I spoke with an online hold-'em player from

Florida who had lost a whopping $250,000 online, he told me:

``It fried my brain. I would roll out of bed, go to my

computer and stay there for 20 hours. One night after I went

to sleep, my dad called. I woke up instantly, picked up the

phone and said, `I raise.' ''

A raked poker game cannot survive unless some players

either overestimate their abilities or are willing to keep

playing despite consistent losses. Fish, then, are the chum

that keeps the rest of the poker ecosystem alive. Poker

message boards monitor which sites are teeming with

geelehighs and which have been leached dry. To stay in

business, sites must attract fish, hold them for as long as

possible and replace them when they go broke. According to

Mike Shichtman, a professional gambler who consults for the

online site Pacific Poker, there is ``giant concern'' in the

industry that the total number of fish may be dwindling. It

is, he adds, a trend that can be reversed only by tapping new

markets.

In a few weeks, Hogan had run his initial $75 up to $300.

Then, in November, came ``the hand that got me hooked.''

Hogan drew a king-high flush and bet all $300. When his

opponent called the bet and showed his ace-high flush, Hogan

felt an impotent rage that broke on his forehead and coursed

through his body. Tilt. He cursed, shut down the program in

disgust and vowed never to play online again. Four days

later, however, he felt the traces of an urge as visceral as

the need to eat.

Hogan was craving ``action,'' the gambler's drug. ``Getting

action'' is the act of placing a bet; being ``in action'' is

the high that follows, a state of arousal that neurologists

have likened to doing a line of cocaine. Blood rushes to the

face, the hands moisten, the mouth dries up. Time slows down

to a continuous present, an unending series of build-ups and

climaxes. The gains and losses begin to feel the same. Action

had already appeared intermittently in Hogan's life--when he

cheered the Ohio State Buckeyes through the last seconds of

overtime, when his father called him with Lehigh's admissions

decision in hand. Poker gave him the same rush whenever he

wanted it, for hours on end.

Back in Ohio, Hogan's October bank statement arrived with

two $50 PSTARS withdrawals. His father called, asked why he'd

waste money like that. Greg promised to stop. He played again

that day. He had not and would not read any of the half-dozen

books that together give a rough grasp of how hard hold-em is

to master. He had no idea that many of his opponents were

self-styled professionals using a special program called

Poker Tracker to analyze betting patterns and seek out fish

like geelehigh. There were always some of these pros online,

some playing 8 or 12 tables at once to leverage their

advantage. They were waiting for him the night Lehigh's

football team lost to rival Lafayette, when Hogan, who'd

organized a cheering section, felt a little down and once

again pushed aside his father's warnings. They followed him

home over Thanksgiving weekend in November 2004, where, amid

the clutter of his father's small basement office, he watched

the World Series of Poker on TV, never changed out of his

pajamas and played online for 10 hours a day. He lost $1,500,

every penny he'd taken to school with him. Upstairs, the

Hogans wondered what was wrong with their son.

``It's just play money, Dad,'' he told his father, who

learned the truth when an overdraft notice arrived from

Greg's bank. Greg Jr.'s phone rang the moment he returned to

Lehigh. It was Greg Sr., who reminded Greg that the $1,500

had come from friends and relatives who didn't give it to him

so he could gamble it. Hogan, distraught, e-mailed Phys and

begged him to cover the loss. Phys agreed, so long as Greg

would stop playing. ``You're a fish,'' he said. ``You need to

stop.''

Greg had begun to daydream about poker during student-

council meetings, at orchestra practice, whenever he had a

free moment. Soon, Phys's $1,500 had melted away. Hogan's

parents arranged for him to meet with a Lehigh counselor. He

was told that live poker was harmless but to stay away from

online. For a time, the counseling worked. Hogan did not

gamble during spring semester. But that summer, back at home

in Ohio, Hogan was checking up on his friends at Facebook.com

when he saw a PartyPoker ad: make a $50 deposit, get a $50

bonus. He'd been coveting a red Jeep and remembered the times

he'd run $100 up to $500. Ten $500 sessions, get the

Cherokee, don't tilt and quit. And he did win, at first.

Then, as always, his opponents began to outmaneuver him. ``I

kept going back online, depositing another $50, winning,

withdrawing,'' he recalls. ``It happened a few times, but

then I wouldn't be withdrawing. And then I'd just keep

putting money in 'cause I kept losing.''

In July, at his parents' behest, Hogan attended a few

Cleveland-area Gamblers Anonymous meetings, which proved

handy when a friend took him to a Canadian casino to play

live poker. He found it easy to play a disciplined game under

the appraising eyes of older strangers and won $500. The G.A.

meetings had taught him to recognize the fish at the table.

Except for the one sitting in his seat.

Back at Lehigh that September, Hogan sometimes found

himself shoehorning counseling meetings between online-poker

sessions. To his friends and professors he was a terrific

success, the easygoing leader who organized landscaping

projects around the Sig Ep house and hobnobbed with Lehigh's

wealthy trustees at dinner parties. But to his parents, his

situation was growing desperate. Hogan had reneged on his

promise to attend G.A. meetings in Bethlehem. Withdrawals and

overdrafts continued to appear on his bank statements. ``I

really don't want to do this anymore, but I don't know how to

stop,'' Greg told his father. Greg Sr. then made the six-hour

drive from Ohio to install a $99 program called GamBlock on

his son's computer. Highly regarded among gambling

counselors, GamBlock makes it impossible for users to access

any Internet casinos. (The company's founder, David Warr,

says that half of his customer base, which he will only put

in the ``thousands,'' is connected to a college or

university.)

Hogan soon found a way to circumvent GamBlock, gambling by

night in the library's computer lounges. ``It was funny to

see how many other kids were playing,'' he says. ``By this

point I didn't really care so much who saw me.'' Greg Sr.

realized what was happening and asked the administration to

lock poker sites out of the public terminals. He says he was

told that nothing could be done. As November approached, the

wall Hogan had built between his Lehigh life and his poker

life had begun to crack. He would

borrow $100 or $200 from his fraternity brothers and fail to

pay them back by his self-imposed deadlines. He would skip

classes and meetings for long binges in the fraternity

lounge, gambling through the night and catching a few hours'

sleep before noon. People he hardly knew were asking him what

was the matter. On Oct. 19, when a fellow Sig Ep sent the

house an e-mail asking if anyone wanted to try to hit a

record Powerball jackpot, Greg sent this reply, a message

that went to all 60 of his brothers: ``O what the hell, maybe

my bad luck can change??? Please God??''

The end came quickly, a weeklong series of 14-hour binges

at the end of November. ``There was very little thinking,''

he told me. ``I'd get up and lose it. Get up, make another

deposit, lose it again. As soon as I lost, I had to get more

money in my account immediately. My whole body was shaking as

I waited for the program to load, I wanted to play so

badly.'' On Nov. 30, 2005, he lost the last $150 in his

account during a six-hour session in the Sig Ep lounge that

ended when a friend told him dinner was ready. ``I was up

about $500, and I was like, `I'll play two more hands,''

Hogan says. ``Then one more hand, and one more after that.

And in those last three or four hands, I lost it all. All the

muscles in my body gave way.'' He fell asleep, completely

broke. All his poker accounts were at zero. His checking

account had a negative balance. At the Sig Ep winter social,

the fraternity treasurer told Hogan he would be kicked out if

he failed to come up with $200 in social fees. Having bailed

him out twice before, Greg's parents refused to give him the

money and were considering pulling him out of Lehigh

altogether. Hogan spent the next week wandering around the

Sig Ep house in a daze, skipping classes and drinking himself

into a stupor each night.

``It was the weirdest thing I've ever experienced in my

life,'' he said. ``Like an out-of-body experience. I was

watching myself walk around. Watching myself go and eat food.

Watching myself take a shower, but not actually doing

those things. I remember looking in the mirror, and it was

not me I was seeing in the reflection.''

The night before the bank robbery, Greg spoke with his

father one last time. Greg Sr. remembers what he heard in his

son's voice. The tiredness. The lack of presence.

``Greg,'' he asked, ``are you gambling?'' Greg said what he

always said. ``Nah, Dad. It's been a while since I've done

any of that.'' Greg Sr. had gotten used to his son's half-

truths, the ``wishing out loud,'' as he calls it. He knew it

was useless to press further. ``O.K., Gregory. I love you.

Good night.''

I met Greg Hogan Jr. for breakfast one morning this spring,

at a diner a few miles from Lehigh. (As Hogan was in the

process of negotiating a plea with the county's D.A., I

agreed to ask him only about poker and refer all questions

about the day of the bank robbery to his attorney.) He had

recently completed an inpatient gambling-treatment program in

Louisiana, where he wasn't allowed to have more than $5 on

him at any time. ``I haven't played a hand of poker in 90

days,'' he said, with a recovering addict's confessional

cheer. He is 20, but his jowly face and all-business baritone

make him seem much older. Take away the American Eagle shirt

and the Ohio State Buckeyes cap and he'd resemble a young,

pale Harry Truman.

Beside us sat Greg Sr. and Karen, still fuming over media

accounts that they are ``affluent.'' On the contrary, they

have scrimped to put children through college. After paying

Greg's treatment costs, legal fees and bank debts, they

expect to be out $35,000. Hogan's lawyer has been fielding

calls from bookers at ``Oprah,'' ``Montel'' and ``Good

Morning America,'' all drawn in by the irresistible ``good

kid robs bank'' story.

Some $60 billion was bet last year in online poker games,

two-thirds of which came from the United States. The vast

majority of this money moves from player to player. About $3

billion wound up as revenue in the form of rake, a figure

that is growing by about 20 percent per year, making poker

the fastest-growing segment of the $12 billion online-

gambling industry. Unlike their brick-and-mortar

counterparts, online casinos don't have to pay for dealers,

free drinks or air-conditioning, and they enjoy profit

margins as high as 60 percent.

There are more than 400 online card rooms operating today,

offering every variety of poker game and every level of

stakes. Hold 'em, the most popular game, can be played for

anywhere from pennies to tens of thousands of dollars a hand.

Like pornography before it, gambling is shedding its stigma,

transitioning from the black market to Wall Street, from a

back-room vice to ubiquitous ``content.'' PartyGaming, the

largest operator, is valued at about $10 billion on the

London Stock Exchange. Its shares are held by Goldman Sachs,

Merrill Lynch and other top Wall Street firms. Five years

from now, if the plans of PartyGaming and other Internet

casinos come to pass, consumers will be able to place bets on

their cellphones and P.D.A.'s while waiting for a table in a

restaurant.

The public visibility of online-poker seems to be growing

as fast as its revenues. Calvin Ayre, the globetrotting

founder of the online card room and sports-betting site

Bodog.com, spends $50 million a year promoting himself and

his company as a Hefner-like lifestyle brand. He has run ads

in Esquire and Vice magazine and on Gawker Media's sites in

which Ayre himself often appears as a dapper, rakish

bachelor, personally embodying both the new poker wealth and

the rewards his younger customers hope the game might

bring. The image has caught on--this March he appeared on

the cover of Forbes's Billionaires issue.

While the Department of Justice maintains that online poker

violates U.S. laws, not a single player or site has been

indicted, and online gambling remains as available as pirated

music. To shut down Internet gambling, the D.O.J. would

either have to start monitoring what we download from the

Internet or raid legal, licensed businesses in Antigua,

Britain, Costa Rica and other countries where it has no

jurisdiction. The D.O.J. has succeeded in persuading some

credit-card companies to stop financing online-poker

accounts, but this hasn't stopped the flow of rake overseas.

U.S. players simply move funds through offshore third-party

``e-wallets'' like Neteller and Firepay, which charge a small

fee and then pass the money on to the sites.

``The Department of Justice takes the position that online

poker is illegal,'' says the former U.S. attorney Jim Martin,

who led the first phases of the department's campaign against

online-gambling advertising. ``But I don't think they have

much of a motive to go after individual bettors at all.''

Analysts say that online gambling's gray legal status

allows operators to avoid paying more than $7 billion a year

in federal taxes. And $7 billion is a lot of tax money to

leave on the table--nearly half of NASA's budget for next

year. It's probably too much for this ambiguous state of

affairs to continue for much longer. Late last month, the

House Judiciary Committee approved a bill introduced by

Representative Bob Goodlatte that would make it harder--but

far from impossible--for players to move their money

offshore, while leaving the question of domestic online

gambling to the states. With Congress unlikely to pass any

law authorizing federal oversight of our online activities,

Internet gambling's near future appears as healthy as illegal

downloading's. In the long term, the federal government's

response is likely to resemble either its response to

tobacco, with high taxes and more rigorous controls over

marketing and access to young people, or to marijuana, a

costly and mostly fruitless campaign to eradicate a demand-

driven business by cutting off the supply.

With plenty of disposable income and spare time, college

students constitute one of the gambling industry's most

coveted demographics. ``We've been surprised by this natural,

organic groundswell of demand from the college audience,''

says Jason Reindorp, marketing director for

AbsolutePoker.com, which gave away a semester's tuition to

the winner of a college-only online tournament and promoted

its Web site at halftime during N.C.A.A. basketball

tournament games. Like many sites, AbsolutePoker.com enlists

players in multilevel marketing programs. Known as

``affiliates,'' players are rewarded with a $75 bonus or a

percentage of the rake each time they find AbsolutePoker a

new customer. Reindorp says that AbsolutePoker relies on

students to make sure all this jibes with campus policy.

``The student audience is very responsible,'' he says. ``They

know how to avoid getting into trouble by breaking their

school's rules, just like they know how to avoid playing

beyond their means.''

I'd heard the same from almost every online player I'd

spoken with: I lose big, I win big, but at the end of the

day, I come out ahead. Johnson did know one losing player

who'd lost several thousand dollars and had to take a $6.25-

an-hour job at this very smoothie shop to pay for his books.

Johnson said Hogan never had much of a reputation among

Lehigh's hard-cord poker players. ``The funny thing is, he

wasn't even in that deep,'' he told me. ``Five thousand is

nothing. I know whole halls full of kids who play the

thousand-dollar buy-in No Limit tables. If everyone did the

same thing when they lost five large,'' he added with a

chuckle, ``well, there'd be a lot more bank robberies.''

Mr. Speaker, I yield back the balance of my time.

Mr. Speaker, I thank the chairman, and I would like to respond to the gentleman from Texas and the gentleman from Massachusetts and tell you why we need this bill and we need it desperately.

We have been trying to move this legislation for 5 years, and in the 5 years that we have failed to move it, as many as half a million young teenagers have become compulsive gamblers. Now, the Harvard Medical School, the University of South Florida, and the American Psychiatric Association have all told us that the younger someone is exposed to gambling, the younger they start gambling, the more addictive it becomes. In fact, about three times more addictive.

The University of Connecticut did a recent study, and I am going to introduce it for the Record, that says Internet gambling is three times as likely to produce a problem gambler. Seventy-four percent of the young people that they surveyed who said they had gambled on the Internet developed a serious addiction.

Now, what happens when they gamble and they get an addiction? McGill University did a study, and they said that teenagers who gamble on the Internet show increased criminal activity, strained family relationships, and depression. Thirty percent of those who became addicted to gambling on the Internet actually attempted suicide. That is why Mr. Leach talked about the young man who was the class sophomore president at Lehigh University who actually robbed a bank. A 17-year- old who lost a $6,000 bet on the Internet committed suicide. We have got to move against this.

Finally, let me conclude with this: let me tell you what has happened in the past year. According to the University of Pennsylvania, in the last year we have gotten another 150,000 young compulsive gamblers.

It is already illegal. What we are doing is stopping it. You have got the criminals on one side, and you have got young people on the other side; and we must protect the young people from these criminals.

Mr. Speaker, I rise today in strong support of H.R. 4411, the Goodlatte-Leach Internet Gambling Prohibition and Enforcement Act.

I want to begin by thanking Chairmen Oxley and Sensenbrenner and Congressmen Goodlatte and Leach for bringing H.R. 4411 to the Floor today and for their undying determination to put an end to Internet gambling in the United States. H.R. 4411 would help stop the growing threat that Internet gambling poses to the most vulnerable in our society, kids and problem gamblers.

H.R. 4411 provides strong new enforcement mechanisms to stop the offshore casinos that flagrantly violate existing state and federal laws against Internet gambling. This bill enables our financial regulators to prescribe regulations limiting the acceptance of financial instruments for unlawful Internet gambling. In addition, H.R. 4411 amends the Wire Act of 1961 to expressly prohibit illegal online interstate gambling. H.R. 4411 was reported by both the Financial Services and Judiciary Committees. Similar legislation has passed the

House in the previous two Congresses. Now is the time to cut off illegal Internet gambling once and for all.

We have been discussing this issue for years. It has taken way too long. In the time we've been debating this issue, Internet gambling sites have virtually overrun the Internet. Five years ago, there were less than 50 Internet gambling sites. Today, there are more than two thousand sites that will generate upwards of $5.9 billion this year alone, nearly half of the $12 billion bet worldwide on Internet gambling.

Support for our efforts to stop the money flow to illegal gambling sites have been nearly universal, from family and religious groups to anti-gambling groups, from professional sports to college athletics, from major players in the banking and credit card industries to law enforcement and Internet service providers. Mr. Speaker, it is far easier and far quicker to just list who doesn't support our efforts. That would, of course, be the illegal gambling industry itself. They have launched an all-out effort at obfuscation and mischaracterization in hopes of defeating this bill and perpetuating their noxious activities.

The ability of the Internet to penetrate every home and community has both positive and negative consequences. It can be a valuable source of information and a way to communicate quickly with loved ones. But, the Internet can also override community values and standards. Gambling is an excellent example of this. Gambling is currently illegal in the United States unless it is regulated by the states. With the Internet, however, prohibitions against gambling and regulations governing gambling are turned on their head.

The negative effects of gambling have been widely documented. All too often, gambling results in addiction, bankruptcy, divorce, crime and moral decline. Internet gambling magnifies the destructiveness of gambling by bringing the casino into your home. According to an extensive survey done by the University of Connecticut Health Center, 74 percent of those who have used the Internet to gamble have serious problems with addiction, and many of those have resorted to criminal activities to pay for the habit. We heard testimony at one of our hearings that Internet gambling is proving to be a serious problem for many college students. One student reportedly lost $10,000 on Internet sports gambling over a three-month period.

Imagine if you found out that a casino was being built next door to your house, and that they had invited your children to participate in gambling activities. You would probably think that was unacceptable. But Internet gambling Web sites are actually worse than that. Sitting right on the computer desk in your home or in your child's bedroom is a computer with easy access to more than 2,000 Web sites that offer illegal Internet gambling services.

Worse yet, your kids could use your credit card to gamble on the Internet and run you into bankruptcy--without you even knowing it.

In addition, Internet gambling has been linked to terrorists and organized crime. The FBI and the Department of Justice have testified that Internet gambling serves as a vehicle for money laundering that can be exploited by terrorists. These Internet sites--most of which are operated offshore--represent a serious money laundering vulnerability for our country.

So what would H.R. 4411 do?

H.R. 4411 addresses the problem of Internet gambling in four ways:

First, it clarifies that the Wire Act covers all forms of gambling including Internet gambling and increases the maximum penalty for violations of the Wire Act from two to five years in prison.

Second, and most importantly, it cuts off the flow of money to Internet gambling Web sites by regulating the payments system.

The legislation directs the Treasury Department and the Federal Reserve to jointly develop regulations preventing financial transactions related to illegal Internet gambling.

Third, the legislation authorizes State and Federal law enforcement to seek injunctions against persons who facilitate illegal Internet gambling; and

Fourth, the U.S. government through the Treasury Department is exhorted to advance international cooperation in law enforcement efforts against illegal gambling and related money laundering.

Internet gambling is already illegal under Federal and State law, but most of the more than two thousand Internet gambling sites operate from offshore locations. Currently, these ``virtual casinos'' advertise the ease of opening betting accounts mainly through the use of credit cards. Therefore, they operate beyond the reach of our law. The regulations and anti-money laundering laws that apply to casinos in our country do not apply to these fly-by-night offshore Internet operators. Shutting off the money source is the only way to shut down these illegal Internet gambling Web sites.

In closing, Mr. Speaker, let me just say that a vote for this bill is a vote against illegal Internet gambling. This bill shuts off the money. That is what these people are waiting for, the money. If we shut off the money, we shut off the sites.

My thanks again go to Chairman Oxley, Chairman Sensenbrenner, Congressman Goodlatte and Congressman Leach for their tireless efforts in moving this bill forward and bringing it to the floor today. I urge all of my colleagues to vote in favor of this legisiation.

disordered gambling among university-based medical and dental patients:

a focus on internet gambling

George T. Ladd and Nancy M. Petry--University of Connecticut Health

Center.

The authors evaluated gambling behaviors, including

Internet gambling, among patients seeking free or reduced-

cost dental or health care. Three hundred eighty-nine

patients at university health clinics completed a

questionnaire that included the South Oaks Gambling Screen

(SOGS; H. R. Lesieur & S. Blume, 1987). All respondents had

gambled in their lifetimes, with 70% gambling in the past 2

months. On the basis of SOGS scores, 10.6% were problem

gamblers, and 15.4% were pathological gamblers. The most

common forms of gambling were lottery, slot machines, and

scratch tickets. Internet gambling was reported by 8.1% of

participants. Compared to non-Internet gamblers, Internet

gamblers were more likely to be younger, non-Caucasian, and

have higher SOGS scores. This study is among the first to

evaluate the prevalence of Internet gambling and suggests

that people who gamble on the Internet are likely to have a

gambling problem. Results also illuminate the need to screen

patients seeking health care services for gambling problems.

The fourth edition of the Diagnostic and Statistical Manual

of Mental Disorders (American Psychiatric Association, 1994)

describes pathological gambling as a disorder that involves

preoccupation with, tolerance of, and loss of control

relating to gambling behaviors. A recent meta-analysis of

prevalence rates (Shaffer, Hall, & VanderBilt, 1999)

concluded that approximately 1.6% of North American adults

may be Level 3 (pathological) gamblers. An additional 3.9%

may be Level 2 (problematic) gamblers, bringing the combined

percentage of disordered gamblers to more than 5%.

Although prevalence rates in general populations have been

described (Shaffer et al. 1999), there is a paucity of

studies that have focused on the prevalence of gambling among

primary-care patients (Miller, 1996b; Pasternak & Fleming,

1999; Van Es, 2000). As a consequence, health care

professionals may not be aware of the impact that gambling

behaviors can have on the health of their patients. Health

comorbidities found to be associated with pathological

gambling include substance abuse, circulatory disease,

gastrointestinal distress, sexual dysfunction, anxiety

disorders, and depression (Bergh & Kuhlhorn, 1994;

Daghestani, 1987b; Lesieur, Blume, & Zoppa, 1986; Miller,

1996a; Pasternak & Fleming, 1999).

This study presents two central opportunities for

contribution to the existing body of knowledge about

disordered gambling. First, we directed our attention toward

gambling behaviors among a subset of the population that

seeks free or reduced-cost health care. A second focus of

this study was the types of gambling activities in which

people engage, with special attention paid to Internet

gambling. Many researchers have examined the prevalence of

disordered gambling (e.g., Shaffer et al., 1999), but few

have presented data on the types of gambling in which

individuals participate, and no known published studies have

focused on the prevalence of Internet gambling.

method

Participants for this study were drawn from patients

seeking treatment at the University of Connecticut Health

Center (UCHC) each year. Of the 389 patients included in this

study, 76.5% were from UCHC dental clinics, which serve

primarily uninsured patients. The remaining 22.5% of

participants were from other UCHC medical clinics. The UCHC

is located 8 miles southeast of Hartford, Connecticut, and is

approximately 65 miles from two large casinos.

Procedures

Questionnaires were left in the waiting areas of various

UCHC health and dental clinics for 13 months (8/1/99-9/2/00)

along with collection boxes. Approximately 2,000 patients

were treated in these clinics during the study period. Signs

encouraging questionnaire completion were displayed in these

general areas. On occasion, a research assistant would

approach patients within clinics and ask them to complete a

screen. No patients who were verbally asked to complete a

questionnaire refused. Nonresponses were probably a result of

failure to notice the signs and questionnaires rather than

refusal to participate. An overall average return rate of

85.7% across the UCHC clinics was determined on weeks in

which the numbers of screens left out and collected were

monitored.

Measures

The 2-page questionnaire consisted of the South Oaks

Gambling Screen (SOGS; Lesieur & Blume, 1987) as well as

questions regarding demographic information and gambling

activities.

Data analysis

We used the SOGS (Lesieur & Blume, 1987) component of the

questionnaires to classify

participants as Level I (score of 0-2), Level 2 (score of 3-

4), or Level 3 (score > 5) gamblers (Lesieur & Heineman,

1988; Shaffer et al., 1999).

We present here the types of participants' gambling

activities, along with the frequency and intensity of recent

gambling behaviors (past year, past 2 months, and past week)

by level of disordered gambling. We compared participants who

reported experience with Internet gambling and participants

who reported no experience with Internet gambling on

demographic variables and SOGS scores. We evaluated

differences among the three levels of gamblers, as well as

between Internet versus non-Internet gamblers, using the chi-

square test for categorical data, analysis of variance for

continuous data, and Kruskal-Wallis tests for non-normally

distributed continuous data.

results

Response rates and demographic characteristics of the

respondent sample

In total, 402 questionnaires were filled out. Thirteen

respondents left many SOGS items unanswered and were thus

excluded, leaving 389 questionnaires for further analysis.

Continuum of SOGS scores

Of the respondents, 46.8% scored a 0 on the SOGS,

indicative of no problematic gambling behaviors. Additional

segments of respondents scored 1 (17.0%) and 2 (10.3%) on the

SOGS. Therefore, according to the classification system

described by Shaffer et al. (1999), 74.0% of respondents

qualified as Level 1 gamblers, and 10.6% of the respondents

were classified as Level 2 gamblers, with 6.2% scoring a 3

and 4.4% scoring a 4. The final 15.4% of respondents were

classified as Level 3 gamblers, with 6.9% scoring between 5

and 9, 5.7% scoring between 10 and 14, and 2.8% scoring

between 15 and 20.

Demographic characteristics

Although no statistically significant group differences

were found with regard to gender, the three groups of

gamblers differed on other demographic characteristics.

Specifically, differences among the groups emerged with

Mr. Speaker, I would like to thank Mr. Conyers for his extraordinary efforts on this legislation.

Mr. Speaker, I rise in strong opposition to this legislation. Despite the misinformed and misguided claims of this bill's supporters, it would neither prohibit Internet gaming nor increase enforcement capabilities of the United States Government.

Instead, passing this bill will do the exact opposite. The millions of Americans who currently wager online will continue to use offshore Web sites out of the reach of U.S. law enforcement, and they will remain unprotected by State regulators who ensure the integrity of brick and mortar gaming establishments in this country.

I continue to be astounded by the Members of this body who constantly rail against an intrusive Federal Government; and yet when it comes to gaming, they are the first, the first to call for government intrusion.

A man's home is his castle unless he chooses to participate in online gaming. Then his home is the province of the Federal Government. This bill was recently included on the House Republicans' American Values Agenda.

Which American values is this promoting? It certainly cannot be the right to privacy. It certainly cannot be the right of individuals to be free to make their own decisions about what type of recreation to enjoy. And, yes, my colleagues, gaming is considered a form of recreation for millions of our fellow citizens.

Gaming is legal in this country in those States who choose to allow it and to regulate it. The vast majority of States do allow gaming and regulate it, whether it be lotteries, racing, card rooms, casinos, or bingo. This bill would make a legal activity illegal in those same States solely because it is done online rather than in a casino or in a church. In reality, the intent of this bill, and it is rather obvious, is to attack and outlaw legal gaming in our Nation.

Supporters of this bill argue that online gaming is a great danger to society and our youth because some people gamble too much and some underage people might access online wagering sites. By that logic, the next piece of legislation we should be considering is banning online shopping. Surely those who overspend their budgets online and young people who borrow their mom's credit card must be stopped by the long arm of Federal law enforcement.

Supporters of the bill before us today claim that their target is the offshore gambling operations that are sucking billions of dollars out of the United States, as Mr. Goodlatte said. Indeed, Internet gaming has grown from a $3 billion industry in 2001, and it is projected to reach $25 billion by the end of the decade.

Americans account for as much as half of that amount. But there is nothing in this bill, let me repeat that, nothing in this bill that will shut down these offshore companies who operate legally in other countries. Like it or not, Americans who wish to wager online will find a way to do so.

The very nature of a free World Wide Web will continue to make online gaming available across the globe, including the United States. Under this bill, billions of dollars will continue to flow out of our country, with millions of Americans wishing to wager online. It is ridiculous, ridiculous to think this bill will actually stop online gaming. Just like Prohibition failed, this prohibition on gaming in the comfort of your own living room will fail as well.

Mr. Speaker, I offer an amendment.

Mr. Speaker, I am pleased to join the ranking member of the Judiciary Committee, Mr. Conyers, and my colleague from Florida, Mr. Wexler, in offering this amendment.

Despite all the righteous indignation we are hearing about the supposed evils of Internet gaming, this bill specifically and brazenly exempts one giant gambling enterprise from its prohibition. This bill's advocates proclaim the immorality of online gaming and shout that it will destroy our society unless you are betting on horse races.

Mr. Goodlatte asserts that his bill is neutral on the subject of interstate online pari-mutuel betting, but there is no getting around the fact that this bill very clearly and specifically states that online betting on horse racing is not prohibited.

And if you don't believe me, Mr. Speaker, let's look at what the National Thoroughbred Racing Association has said about the bill. In March of this year, after Financial Services approved the Leach bill, the NTRA issued a press release saying, ``The National Thoroughbred Racing Association has secured language in the unlawful Internet Gambling Enforcement Act to protect Internet and account wagering on horse races.''

Later in the same release, ``The NTRA worked with Congressman Goodlatte to ensure that H.R. 4777 also contained language that protects online and account pari-mutuel wagering.'' That sounds pretty clear to me.

But wait, Mr. Speaker, there is more. After the Judiciary Committee approved both the Goodlatte and Leach bills in May, the Thoroughbred Times published an article titled, ``Gambling Bill Passes Committee With Racing Exemption Intact.'' The article states that the bill includes an exemption that would allow the United States horse racing industry to continue to conduct interstate account and Internet wagering. And, finally, it includes a quote from the NTRA spokesman who said, ``Not only did the bill pass by a significant margin, but three separate amendments to either slip out or substantially limit our exception were all defeated.'' It sounds to me like they think they got an exception in this bill.

The bill also includes another hypocritical exemption for intrastate lotteries that is highly ironic because, as has been stated here before, this exemption is exactly what the notorious felon, Jack Abramoff, wanted when he reportedly orchestrated the defeat of a similar bill several years ago because it had no exemption for lotteries. Mr. Abramoff, if he were here, would be laughing about this turn of events. I am sure his former clients are giddy.

Our amendment would strike the horse racing and lottery exemptions from this bill. Members who say they dislike Internet gaming have the opportunity to prove it by supporting this amendment.

If we do not adopt the amendment, then this entire debate is a farce, Mr. Speaker, because the Internet Gambling Prohibition and Enforcement Act before us does not completely prohibit Internet gaming. You want to outlaw Internet gaming? This body wants to outlaw Internet gaming? Well, let's do it. Let's test the mettle of our fellow colleagues.

I have heard many speakers talk about the special interests involved in this bill. Well, it seems to me that the most special interest is the Thoroughbred Horse Racing Association. They seem to have the most clout because they are the ones that got the exemption.

I ask all of my colleagues to join with me. If you are serious about outlawing Internet gaming, then let's really do it, and let's not carve out an exemption because it suits your purposes and your special interests.

Mr. Speaker, I reserve the balance of my time.

I would like to yield 2 minutes to the distinguished gentleman from Michigan (Mr. Conyers).

Mr. Speaker, I yield myself such time as I may consume.

I absolutely am flabbergasted by the righteous indignation being displayed on the other side of the aisle, and it shocks my conscience hearing what I am hearing.

If the gentleman from Virginia is so intent on banning Internet gaming, well, then he should be supporting my amendment. Better yet, I should not have had to introduce an amendment. It should have been included in his original legislation.

If we are serious about banning gaming, then we should ban all forms of gaming, and I can't possibly imagine why he would be opposed to that. When he says it is a poison pill, why, because the horse racing association told him they would fight this if he brought in legislation that had this included and didn't make an exemption out of it?

I am absolutely astounded also by the other gentleman from Virginia (Mr. Wolf), whom I don't think would be offended if I said that he was opposed to gaming of any form. But I find it incomprehensible that in the year 2000 Congress approved a provision allowing online betting on horse racing, and during consideration of the bill on the floor, Mr. Wolf made a statement in which he said, ``This provision deeply troubles me, and would expand gambling at a time when men and women are becoming addicted to this process.'' Now he seems to be okay with the Leach-Goodlatte amendment which specifically exempts the activity made legal by this 2000 provision.

Now, if we want to let the States retain control of this issue, we should not be voting on doing this bill at all. It makes no sense. I would say that we are interfering with the States' rights, not helping them out.

And if you are arguing that the bill is neutral on horse racing, then why is it even mentioned in this bill? And why does the Thoroughbred Horse Racing Association think they have an exemption? Is Mr. Goodlatte willing to stand up here and make a statement for the record that the Thoroughbred Horse Racing Association and horse racing is exempt and the Department of Justice can go after them and shut them down? I don't think so.

And if you had an opportunity to go online, as I did just yesterday, and looked at the horse racing Internet sites, it is page after page after page. Anybody can log on. Anybody can place a bet. And I don't see any way to prevent children, and I don't see any way of keeping people from spending their hard-earned money on that.

This creates a huge exemption which we will have no control of, and totally, in my opinion, undermines the bill and makes a mockery and a farce of what we are doing here today, or supposed to be doing here today.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, may I inquire as to how much time we have left?

I yield 45 seconds to the gentleman from Michigan (Mr. Conyers).

Mr. Speaker, I have heard a lot today about a carefully negotiated balance in this bill. I would like to know who was involved in this negotiation. I certainly wasn't. Was the horsing racing industry involved? Apparently, they were. Talk about a special interest. The lotteries? Jack Abramoff, perhaps? Because they are all getting exactly what they want with this piece of legislation.

I would like to urge a little honesty on the floor today and urge my colleagues to support the Berkley-Conyers amendment. If you are serious about banning Internet gaming, well, then, let's ban it and let's not make a major exception that can drive a truck through this.

I urge all my colleagues, before you vote on this, go online. Check out horse racing online and see the pages and pages of online betting that you can do when it comes to racing horses. There is no excuse and no reason for this exemption other than you couldn't cut a deal with the horse racing industry, so you exempted them.

I urge everyone to vote for the Berkley amendment and against the Goodlatte bill.

Mr. Speaker, on that I demand the yeas and nays.

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, I rise in strong support of H.R. 4411, the Internet Gambling Prohibition and Enforcement Act. The version we consider today merges H.R. 4777, the Internet Gambling Prohibition Act, offered by the gentleman from Virginia (Mr. Goodlatte), and H.R. 4411, the Unlawful Internet Gambling Enforcement Act of 2006 introduced by the gentleman from Iowa (Mr. Leach).

I am pleased to have worked closely with Mr. Goodlatte, Mr. Leach and members of the Committee on Financial Services to draft a compromise on this important legislation which has allowed it to come to the floor today.

In recent years, illegal online gambling activities and their adverse social consequences have risen dramatically. Americans will send $6 billion to unregulated, offshore, online casinos this year, 50 percent of the $12 billion wagered on Internet gambling worldwide.

The Department of Justice has warned that Internet gambling sites are often fronts for money laundering, drug trafficking and even terrorist financing. Furthermore, these sites evade vigorous U.S.-based gambling regulations that restrict gambling by minors, protect chronic gamblers and ensure the integrity of the games.

The characteristics of Internet gambling are unique: online players can gamble 24 hours a day from home; children may play without sufficient age verification; and betting with a credit card can undercut a player's perception of the value of cash, leading to addiction, bankruptcy and crime. Young people and compulsive gamblers are particularly vulnerable.

The legislation we consider today clarifies the application of the Wire Act to the Internet, and prohibits not only sports betting, but traditional gambling such as online poker, blackjack and roulette.

It further provides Federal, State and tribal law enforcement with the tools to combat Internet gambling and cuts off revenue to those who profit from this destructive and illegal activity. The bill accomplishes this by prohibiting the use of financial instruments such as credit cards, electronic fund transfers, checks and drafts to pay for online gambling bets. It also increases the criminal penalties for violation of the Wire Act from a maximum of 2 years to a maximum of 5 years.

Legislation to address illegal online gambling is strongly supported by a broad and diverse coalition representing religious organizations, professional sports leagues, entertainment companies, the financial services industry, and State lottery commissions. Moreover, the unique national and global character of the Internet requires a clear and decisive congressional response to illegal activities that occur online.

The time to pass strong prohibitions against Internet gambling is now. I urge my colleagues to pass this vital legislation.

House of Representatives,

Committee on the Judiciary,

Washington, DC, July 10, 2006.

Hon. Joe Barton,

Chairman, Committee on Energy and Commerce, Washington, DC.

Dear Chairman Barton: Thank you for your recent letter

concerning the Committee on Energy and Commerce's

jurisdictional interest in H.R. 4411, the ``Unlawful Internet

Gambling Enforcement Act of 2006, as amended.'' I acknowledge

the Committee on Energy and Commerce's jurisdictional

interest in the amendment in the nature of a substitute to

H.R. 4411 and appreciate your willingness to waive further

consideration of the legislation in order to expedite its

consideration on the House floor.

I agree that by foregoing consideration of the amendment in

the nature of a substitute to H.R. 4411, the Committee on

Energy and Commerce does not waive jurisdiction over subject

matter contained in this or similar legislation. In addition,

I agree to support representation from the Committee on

Energy and Commerce for provisions of H.R. 4411 determined to

be within its jurisdiction in the event of a House-Senate

conference on the legislation.

Finally, as requested, I will include a copy of your letter

and this response in the Congressional Record during floor

consideration of this legislation.

Sincerely,

F. James Sensenbrenner, Jr.,

Chairman.

Mr. Speaker, I yield 4 minutes to the gentleman from Virginia (Mr. Goodlatte), the father of half this bill.

Mr. Speaker, I yield 2 minutes to the gentleman from Virginia (Mr. Boucher).

(Mr. BOUCHER asked and was given permission to revise and extend his remarks.)

Mr. Speaker, I yield 2 minutes to the gentleman from Massachusetts (Mr. Meehan).

Mr. Speaker, I yield myself the balance of my time.

Mr. Speaker, it puzzles me greatly to hear my distinguished friend from Michigan (Mr. Conyers) call this bill Abramoff's revenge. There are no two Members of this body that fought Mr. Abramoff more strongly on this issue than the gentleman from Iowa (Mr. Leach) and the gentleman from Virginia (Mr. Goodlatte). And what side are they on? They are the sponsors of this bill, because they realize that we have to do something to curtail Internet gambling.

Now, this bill started out before I became the chairman of the Judiciary Committee. It is still around, and Internet gambling is growing by leaps and bounds.

Now, I think that they have struck a good compromise, they have struck a good balance, and they have come up with legislation that is practical not only in attempting to deal with the methods of payment for debts accrued through Internet gambling, but also through an amendment of the Wire Act to deal with this issue, since most transmissions over the Internet no longer even touch the public wire telephone and telecommunications system.

I think that they have done a good job in coming up with something that can be passed by both Houses and signed into law; and the executive office of the President and the Office of Management and Budget issued a statement of administration policy saying that the administration supports passage of this bill.

How come everybody who has been fighting for this issue, or almost everybody who has been fighting for this issue, wants to have the bill passed, and we see some folks from Nevada and elsewhere that don't? Vote ``aye'' on the bill.

Mr. Speaker, I yield back the balance of my time.

Amendment Offered by Ms. Berkley

Mr. Speaker, I yield myself 2 minutes.

Mr. Speaker, I rise in strong opposition to the amendment. This amendment impairs States' rights to regulate gambling within their borders and eliminates the protection in this legislation that prevents gambling from crossing State lines.

Now, what State has got the most gambling to export? I believe it is the State of the author of this amendment, the gentlewoman from Nevada. Congress has consistently found that States have the primary responsibility for determining what forms of gambling may legally take place within their borders, and this amendment infringes on that right and subverts this principle. Forty-nine of the 50 State attorneys general support a ban on Internet gambling. Guess which attorney general doesn't. It is the attorney general from Nevada, the same State as the sponsor of this amendment, my distinguished colleague the gentlewoman from Nevada (Ms. Berkley).

And, unlike previous versions of the Internet gambling bills, H.R. 4411 is neutral as it relates to the Interstate Horse Racing Act. The relevant provision in the legislation simply states that, if an activity is permitted under the Interstate Horse Racing Act, it would not be prohibited by this legislation. If someone wants to amend the Interstate Horse Racing Act, let them introduce a bill to do so and it will be considered by the Congress.

It has been the Justice Department's position that the existing Wire Act covers gambling on interstate horse racing. So what is the beef? If the Wire Act already covers it, then this bill does not touch what the Wire Act covers. The amendment is nothing less than a poison pill to this crucial legislation. I urge my colleagues to oppose the amendment.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I yield 4 minutes to Mr. Goodlatte from Virginia.

Mr. Speaker, to demonstrate that all of the opposition to the amendment doesn't come from this side of the aisle, I yield 2 minutes to the gentleman from Virginia (Mr. Boucher), a very loyal Democrat.

(Mr. BOUCHER asked and was given permission to revise and extend his remarks.)

Mr. Speaker, I yield 1 minute to the gentleman from Virginia (Mr. Wolf).

Mr. Speaker, I yield myself the balance of my time.

Mr. Speaker, let's forget about who is on which side of this legislation and this amendment here in the House of Representatives, and let's look at the fact that 49 out of the 50 State attorneys general support this legislation. They are not in the back pocket of any industry. They are all elected, or most of them are elected by the people, and they are the chief law enforcement officers of their respective States. They say we need this legislation and they support this legislation and oppose the amendment.

The only State attorney general that doesn't is the State attorney general of Nevada. Now, which State has got the most gambling to export across State lines into other States? I would submit it is Nevada. Which State doesn't have horse racing and doesn't have a State lottery to export? It is Nevada, among others.

So I give the gentlewoman from Nevada a lot of credit for representing her State and her constituents. I don't think that is the priority of the other 49 States. It certainly is not the priority of their State attorneys general, and we ought to vote down this amendment.

Mr. Speaker, I yield myself 3\1/4\ minutes.

Mr. Speaker, for nearly a decade, many in the Congress have sought to deter Internet gambling. But time and again the issue has been stymied, often in ways that reflect imperfectly on this institution. But it cannot be stressed enough that from a macroeconomic perspective, there are no social benefits for Internet gambling, and from a microfamily perspective, enormous harm is frequently inflicted.

John Kindt, a professor of business at the University of Illinois at Urbana-Champaign calls the Internet ``crack cocaine for gamblers. There are no needle marks,'' he says. ``There is no alcohol on the breath. You just click the mouse and lose your house.''

These comments could not be more apropos than for Greg Hogan, Jr., a 19-year old Lehigh University class president and chaplain's assistant from Barberton, Ohio. This pastor's son gambled away $7,500 playing online Texas Hold-'Em, then confessed to robbing a bank to try to recover his losses. His life is ruined.

Never before has it been so easy to lose so much money, so quickly, at such a young age. Internet casinos are proliferating. Soon they will be ubiquitous.

In the next 5 years, if Congress does not act to clarify and enforce the laws banning Internet gambling, and if Internet casinos' business plans come to pass, gamblers will be able to place bets not just from their home computers but also from their cell phones, while they drive from work, or from their BlackBerrys as they wait in line at the movies.

Mr. Speaker, the time has come for Congress to finally deal with the subject matter. The measure before us, H.R. 4411, is supported by the NCAA, all the major professional sports organizations, from the NFL and Major League Baseball to the NBA and NHL, as well as the financial services industry, family groups, religious organizations and 48 of the 50 State attorneys general.

The reason the sports groups support the legislation, as our colleague, Tom Osborne, so thoughtfully noted, is that they are concerned with the integrity of the games.

The reason the religious community has come together is that they are concerned for the unity of the American family. Internet gambling is not a subject touched upon in the Old or New Testament or the Koran or the Bhagavad Gita. But the pastoral function is one of dealing with families in difficulty. And religious leaders of all denominations and faiths are seeing gambling difficulties erode family values.

It will be suggested in this debate that there is no call to rein in activities of individual choice. But it should be clear that in the history of the Western world, whenever gambling has been legalized it has been subject to careful regulation. This is simply not the case with the Internet. Nor is it the case that an individual's misjudgment does not affect society as a whole.

There is nothing in Internet gambling that adds to the GDP or makes America more competitive in the world. Indeed, if an individual cannot repay his or her debt, neighbors will be subject to higher interest rates. Everyone loses if this industry continues its remarkable growth.

While Congress has failed to act, the illegal Internet gambling industry has boomed. This year, Americans are projected to send more than $6 billion to unregulated, offshore, online casinos, half of the $12 billion that will be bet worldwide on Internet gambling, FBI and Justice Department experts have warned that Internet gambling sites are vulnerable to be used for money laundering, drug trafficking and even terrorist financing. Further, these sites evade rigorous U.S.-based regulations that control gambling by minors and problem gamblers, and ensure the integrity of the games.

Internet gambling's characteristics are unique: online players can gamble 24 hours a day from home; children may play without sufficient age verification; and betting with a credit card can undercut a player's perception of the value of cash, leading to addiction, bankruptcy and crime. Unlike in brick-and-mortar casinos in the United States where legal protections for bettors exist and where there is some compensatory social benefit in jobs and tax revenues, Internet gambling sites principally yield only liabilities to America and to Americans.

H.R. 4411 was introduced to provide federal and state governments strong tools to enforce existing gambling prohibitions. It would crack down on illegal gambling by clarifying that the Wire Act covers all forms of interstate gambling and would account for new technologies. Designed to cut the money flow from gamblers to Internet gambling sites, the bill would enhance criminal penalties for gambling businesses settling Internet wagers with financial instruments such as credit cards, checks, or fund transfers. It would also require payment systems to establish procedures for blocking these transactions.

Internet gambling has become as much a part of the college experience as late-night study sessions and rooting for the football team. Researchers have called gambling online addictive. Players attest to becoming obsessed with it. The activity is illegal, but the law is not being forced.

According to a study by the Annenberg Public Policy Center, nearly 10 percent of college students gambled online last year. They play in their dorm rooms, in library lounges, in class. The number of college males who reported gambling online once a week or more quadrupled in the last year alone.

Finally, a note about horseracing. In 1978, Congress passed the Interstate Horseracing Act (IHA) to set forth the rights and responsibilities applicable to interstate wagering on horseracing, to affirm that States have primary responsibility for regulating gambling within their borders, and to prevent States from interfering with the gambling policies of other States. In 2000, Congress amended the IHA to clarify that the statute applied to the transmission of interstate off- track wagers via telephone or other electronic media.

The Executive Branch has taken the position that the 1961 Wire Act overrides the IHA, even though the IHA is a more recent statute, because neither statute expressly exempts IHA transactions from the Wire Act. The horseracing industry vigorously disagrees. H.R. 4411 has been very carefully drafted to maintain the status quo regarding horseracing, preserving the ability of the Executive Branch and the horseracing industry to litigate the proper interpretation of these two statutes. The text of the bill is clear: ``this Act does not change which activates related to horseracing may or may not be allowed under Federal law.'' To the degree this act provides new definitional standards, it bolsters rather than diminishes the Justice Department's latitude.

Bills of this nature are always controversial and subject to intense lobbying by powerful interests. I believe the approach on the table represents the only credible initiative likely to be considered in the foreseeable future. I urge support for this important legislation.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I yield 1 minute to the gentleman from Alabama (Mr. Aderholt).

Mr. Chairman, I yield 2 minutes to a great leader of this particular effort, Mr. Bachus from Alabama.

Mr. Speaker, I yield 1 minute to the gentleman from Pennsylvania (Mr. Dent), who represents Lehigh University.

Mr. Speaker, I yield 2 minutes to the distinguished gentleman from Virginia (Mr. Wolf), who has been a phenomenal advocate of this issue.

Mr. Speaker, I yield 1 minute to the gentleman from Arizona (Mr. Shadegg).

Mr. Speaker, I yield 2 minutes to the distinguished gentleman from Pennsylvania (Mr. Pitts).

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, very briefly, I would simply like to express a lot of personal appreciation to Chairman Mike Oxley of the Banking Committee, Spencer Bachus and all those who have preceded us on this side, to Chairman Sensenbrenner and, extraordinarily, to Bob Goodlatte who has led this movement for quite a long time.

I also want to express a great deal of respect for points in the opposition, Ron Paul, our distinguished Libertarian leader in the House, and Barney Frank, who from a liberal perspective has taken a Libertarian view, have thoughts that deserve great respect; and I have always admired the work of the ranking member, John Conyers, on this committee.

But I want to just conclude with this observation. This is not a partisan bill. It is not an ideological bill. As Ms. Hooley very thoughtfully reflected, from a Democratic perspective, this is a family bill, and this bill, I am hopeful, will get a lot of support from both sides, and it will get a little opposition from both sides. This is for the good of the American people, and in the development of legislation like this, outside

groups do play a role. Sometimes they are nefarious; that happens around here. Sometimes they are high-minded.

When I think of Marty Gold of the NFL, when I think of Cynthia Abrams from United Methodist Church, I think of really fine Americans who have indicated that we should act in this area, and I am honored to work with them.

I urge support for this legislation.