Internet Gambling Study Commission Act

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 thank the gentleman for yielding.

Mr. Speaker, I rise to note that folded into the SAFE Port Act is the Unlawful Internet Gambling Enforcement Act which is one of the most important pieces of family legislation this Congress has ever considered.

Internet gambling restraints have been under review for four Congresses. This evening we are finally poised to act decisively on this subject, and I want to extend my personal appreciation to the Speaker; to the majority leader, Mr. Boehner; and to the Senate majority leader, Mr. Frist, for their steadfast support.

Companion legislation to the House product was forthrightly led in the Senate by John Kyl of Arizona. Many Members have played an important part over the years in this legislation, particularly Mike Oxley and Spencer Bachus from the Financial Services Committee and Bob Goodlatte and Chris Cannon from Judiciary.

But I want to stress this is bipartisan legislation. The majority of Democrats voted for it just a few weeks ago. Indeed, all of us can be proud of this legislation. It should be considered a significant accomplishment of this Congress. After all, with each passing day we learn of friends and neighbors touched by devastating losses from Internet gambling. Never has it been so easy to lose so much so quickly at such a young age.

As a professor of business at the University of Illinois has noted, Internet gambling is crack cocaine for gamblers. There are no needle marks; you just click the mouse and lose your house.

The reason the NCAA, the NFL and the NBA, the NHL, and Major League Baseball support this legislation is their concern for the integrity of the games. The reason the religious community from Baptists and Methodists to Muslims has rallied to this cause is because it is concerned for the unity of the American family.

The reason we should adopt this approach is that we must be mindful of our obligations to the American family.

Mr. Speaker, I urge support for this legislation, and I will submit for the Record at this point its legislative history.

Legislative History for the Unlawful Internet Gambling Enforcement Act

Section 801. Short title

This Act may be cited as the `Unlawful Internet Gambling

Enforcement Act of 2006.'

Section 802. Prohibition on acceptance of any payment instrument for

unlawful Internet gambling

Subsection (a) adds a new `Subchapter IV--Prohibition on

Funding of Unlawful Internet Gambling' to Chapter 53 of Title

31 (Monetary Transactions). The new subchapter will come

immediately after subchapter III, covering Money Laundering

and Related Financial Crimes.

Section 5361. Congressional findings and purpose

(a) Findings. The Congressional findings note that: (1)

Internet gambling is primarily funded through the personal

use of payment system instruments, credit cards, and wire

transfers; (2) the National Gambling Impact Study Commission

in 1999 recommended the passage of legislation to prohibit

wire transfers to Internet gambling sites or the banks which

represent such sites; (3) Internet gambling is a growing

cause of debt collection problems for insured depository

institutions and the consumer credit industry; and (4) new

mechanisms for enforcing gambling laws on the Internet are

necessary because traditional law enforcement mechanisms are

often inadequate for enforcing gambling prohibitions on the

Internet, especially where such gambling crosses State or

national borders.

(b) Rule of Construction. No provision is to be construed

as altering, limiting, or extending any Federal or State law

or Tribal-State compact prohibiting, permitting or regulating

gambling within the United States. This is intended to

alleviate fears that this bill could have the effect of

changing the legality of any gambling-related activity in the

United States.

Section 5362. Definitions

This defines the term `bet or wager' as the staking or

risking by any person of something of value upon the outcome

of a contest of others, a sporting event, or a game subject

to chance with the agreement that the winner will receive

something of value in the event of a certain outcome. This

subsection clarifies that `bet or wager' does not include

bona fide business transactions such as securities trading or

buying or selling insurance contracts, or participation in a

simulation sports game or educational game. ``Something of

value'' does not include personal efforts of the participants

in playing the game or contest, or points or credits that the

sponsor of the game or contest provides to participants free

of charge and that can be used or redeemed only for

participation in games or contests offered by the sponsor.

Defines the term `unlawful Internet gambling' as placing,

receiving, or transmitting a bet or wager by any means which

involves the use of the Internet, where such bet or wager is

unlawful under any applicable Federal or State law in the

State or Tribal lands in which the bet or wager is

initiated, received, or otherwise made. Clarifies that

purely intrastate transactions conducted in accordance

with state laws with appropriate security controls will

not be considered unlawful internet gambling. Likewise,

transactions solely within Tribal lands complying with

similar security requirements and the Indian Gaming

Regulatory Act will not be considered unlawful. Section

5362(10)(D) addresses transactions complying with

Interstate Horseracing Act (IHA) which will not be

considered unlawful, because the IHA only regulates legal

transactions that are lawful in each of the states

involved. Also clarifies that intermediate routing of data

packets does not determine the location in which bets or

wagers are made.

The Internet gambling provisions do not change the legality

of any gambling-related activity in the United States. For

instance, if use of the Internet in connection with dog

racing is approved by state regulatory agencies and does not

violate any Federal law, then it is allowed under the new

section 5362(10)(A) of title 31.

The Internet gambling provisions do not interfere with

intrastate laws. New section 5362(10)(B) creates a safe

harbor from the term ``unlawful Internet gambling'' for

authorized intrastate transactions, if the state law has

adequate security measures to prevent participation by minors

and persons located out of the state. The safe harbor would

leave intact the current interstate gambling prohibitions

such as the Wire Act, federal prohibitions on lotteries, and

the Gambling Ship Act so that casino and lottery games could

not be placed on websites and individuals could not access

these games from their homes or businesses. The safe harbor

is intended to recognize current law which allows states

jurisdiction over wholly intrastate activity, where bets or

wagers, or information assisting in bets or wagers, do not

cross state lines. This would, for example, allow retail

lottery terminals to interact with a processing center within

a state, and linking of terminals between separate casinos

within a state if authorized by the state.

Tribal gaming laws are similarly preserved. Transactions

solely within tribal lands complying with similar security

requirements and the Indian Gaming Regulatory Act will not be

considered unlawful, under section 5362(10)(C). Moreover, the

principle of the Indian Gaming Regulatory Act is that state

governments cannot apply discriminatory laws against gaming

authorized by tribal governments within the state. If a state

authorizes use of the Internet for gambling pursuant to this

section and the tribal government also authorizes this,

gambling businesses located on tribal lands within that state

would be permitted to ``export'' gambling services to persons

in the rest of the state, off of tribal lands, if the

``exported'' game complies with state law, pursuant to

section 5362(10)(B). This does not give the state

jurisdiction over the operation of the tribal gambling

business, including licensing requirements, and does not

allow the state to dictate tribal gaming laws. Only the game

itself--including the method for playing the game--must

comply with state law if a person physically located off of

tribal lands places a bet that is received by a tribal

gambling business. This principle also applies in reverse: if

a person on tribal lands plays a gambling game with a state-

based gambling

business, the game must not violate tribal law.

Section 5362 also defines the terms `business of betting or

wagering,' `designated payment system,' `Internet,' and

`restricted transaction.' Several additional terms are

defined by reference to other sections of the U.S. Code.

Section 5363. Prohibition on acceptance of any financial instrument for

unlawful Internet gambling

Prohibits persons engaged in the business of betting or

wagering from knowingly accepting credit, funds, bank

instruments, or proceeds of any other form of financial

transaction in connection with the participation of another

person in unlawful Internet gambling. This is called a

'restricted transaction' according to the definitions

section.

Section 5364. Policies and procedures to identify and prevent

restricted transactions

(a) Regulations and (b) Requirements for Policies and

Procedures. Requires the Secretary of the Treasury and the

Federal Reserve Board, in conjunction with the U.S. Attorney

General, to prescribe regulations within nine months

requiring any payment system to establish policies and

procedures reasonably designed to identify and block

restricted transactions, or otherwise prevent restricted

transactions from entering its system.

(c) Compliance and (d) Liability. Provides persons

operating financial systems with immunity from civil

liability for blocking transactions that they reasonably

believe are restricted transactions, or in reliance on the

regulations promulgated by the Treasury Department and

Federal Reserve. Though a financial institution may block

additional transactions based on reasonable belief, it has no

duty to do so, and may rely solely on the regulations to

fully discharge its obligations.

(e) Enforcement. The Federal functional regulators and the

Federal Trade Commission are given the exclusive authority to

enforce this section.

Section 5365. Civil remedies

Authorizes the U.S. Attorney General and State Attorneys

General to pursue civil remedies, including a preliminary

injunction or injunction against any person to prevent or

restrain a violation of this legislation. It clarifies that

the bill does not alter, supersede or otherwise affect the

Indian Gaming Regulatory Act; generally limits responsibility

of an interactive computer service to the removal or

disabling of access to an online site violating this section,

upon proper notice; restricts the ability to bring injunctive

cases against financial transaction provider activities.

Internet gambling operators primarily use the resources of

two types of businesses to conduct their unlawful

enterprises: payment systems and interactive computer

services. The unlawful use of payment systems is addressed by

section 5364, not by injunctions. The legislation addresses

the unlawful use of interactive computer services through

injunctions, but with appropriate limits to avoid imposing

any duty to censor or monitor on these computer services.

Section 5365(c)(2) also extends to interactive computer

services the same immunity from liability that common

carriers are afforded when complying with a notice from law

enforcement pursuant to section 1084(d) of title 18 to

discontinue service to a gambling business.

Section 5366. Criminal penalties

Authorizes criminal penalties for violating section 5363,

including fines or imprisonment for not more than five years

or both. Also authorizes permanently enjoining a person

convicted under this section from engaging in gambling

activities.

Section 5367. Circumventions prohibited

Provides that, notwithstanding the safe harbor provided in

section 5362(2), a financial intermediary or interactive

computer service or telecommunications service that has

actual knowledge and control of bets and wagers, and operates

or is controlled by an entity that operates, an unlawful

Internet gambling site can be held criminally liable under

this subchapter.

Section 803. Internet gambling in or through foreign jurisdictions

Subsection (a) provides that, in deliberations between the

U.S. Government and any other country on money laundering,

corruption, and crime issues, the U.S. Government should

encourage cooperation by foreign governments in identifying

whether Internet gambling operations are being used for money

laundering, corruption, or other crimes, advance policies

that promote the cooperation by foreign governments in the

enforcement of this Act, and encourage the Financial Action

Task Force on Money Laundering to study the extent to which

Internet gambling operations are being used for money

laundering. It also requires the Secretary of the Treasury to

submit an annual report to Congress on the deliberations

between the United States and other countries on issues

relating to Internet gambling.

Subsection (b) requires the Secretary of the Treasury to

submit an annual report to Congress on any deliberations

between the United States and other countries on tissues

relating to Internet Gambling.

Mr. Speaker, pursuant to House Resolution 1064, I call up the conference report on the bill (H.R. 4954) to improve maritime and cargo security through enhanced layered defenses, and for other purposes.

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

Mr. Speaker, I rise tonight in strong support of the conference report on H.R. 4954, the SAFE Port Act.

This is a night of a true success in the area of homeland security and port security. This is an issue which the country was focused on earlier this year with the whole Dubai Ports issue. It is an issue which the Homeland Security Committee addressed head on. We passed the bill out of committee. It passed the full House floor by a vote of 421- 2; and now we are here tonight, Mr. Speaker, for final passage.

Let me at the outset commend the ranking member of the committee, Mr. Thompson of Mississippi, for the tremendous cooperation that he gave throughout the committee process on this bill; Subcommittee Chairman Lungren on our side for his work, the leadership he demonstrated; and also Ms. Sanchez and Ms. Harman. This was definitely and truly a bipartisan effort, and we are here tonight because both parties came together, we worked together, we realized the importance of this. We realized that homeland security should not be a partisan issue.

Mr. Speaker, I do not intend to go on at great length, but I will give just some of the highlights of the bill. It provides $400 million a year in dedicated port security grant programs, three pilot programs for 100 percent screening for nuclear and radiological material. It enhances the Container Security Initiative, CSI. It codifies and strengthens CTPAT. It also establishes the Domestic Nuclear Detection Office. It also sets deadlines for TWIC.

Mr. Speaker, this is legislation which encompasses so much of the issues that we have to address with port security. It is legislation whose time has come. It is legislation which makes our country safer or makes our ports more secure. It will enable the commerce of the country to go forward. And it is a bill which distinctly addresses the concerns raised by the American people.

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

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

Mr. Speaker, I would just note that I was listening very carefully to the gentleman's remarks, and I really heard nothing at all critical of the port security bill. We are talking about other bills that maybe should be covered or other items. The fact is, on the issue of port security, this is the port security bill. It did receive wide bipartisan support. And I think, rather than go on extraneous issues and talking and talking about fences, we are talking about port security.

Mr. Speaker, I yield such time as he may consume to the prime sponsor of the port security bill, the gentleman from California, Mr. Lungren.

Mr. Speaker, I yield 3 minutes to the gentleman from Iowa (Mr. Leach).

Mr. Speaker, could I inquire as to how much time is remaining.

Could I inquire of the gentleman from Mississippi how many speakers he has remaining.

Mr. Speaker, I reserve my time.

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

Let me first of all thank the gentleman from Michigan for his undying affection that he shows for me so often, especially tonight. It really warms my heart, and I want to thank him especially for it.

I would, however, just like to touch on a few things. First of all, this is the SAFE Port Act. I have listened as carefully as I possibly can. I have listened; I have asked Mr. Lungren to listen; I have asked staff to listen. I have not heard even one remote criticism of the port security aspects of this bill. This is a port security bill. We had staff negotiations going on day after day after day.

Now, the gentleman from Michigan raised the question of last night. Let us explain this right now. It was explained before. We will try again.

The fact is last night there was no legislative text incorporating the staff recommendations. The Senate assured us they would provide it. The Senate did not have it last night. The Senate refused to provide it. The first we saw it was 3 o'clock this afternoon. What is going on in the Senate is up to them, but that is where the final text was.

Now, if the gentleman is saying that when they came back in at 3 o'clock this afternoon, rather than take advantage of a bill which has been worked on for 6 months, which has gone through subcommittee, which has gone through committee and which has gone through the House floor, which was worked out so carefully with Senator Collins and Senator Lieberman and Senator Murray, which had strong bipartisan support, that because of the fact that the Senate language was not over here in time for the gentleman from Michigan, that we should put that aside, and taking the risk of not taking advantage of this moment, of not seizing the moment and passing this historic legislation to save our Nation, I have heard of people who cannot take ``yes'' for an answer.

We said last March, let us put together a port security bill. We did it. We put together a good bill and all we get tonight is begrudgery. Well, it is good, it is this, it is that, but it is not good enough because it does not cover rail, it does not cover transit or it does not cover this. Also, as the gentleman from California reminded me, it does not contain the cure for cancer either.

But the fact is it is a very good port security bill. As the gentlewoman from California said, it is the real deal. If you want to turn your back on the real deal, if you want to vote and say I really wanted something else, this is not good enough for me, the real deal should be good enough for me.

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

Mr. Speaker, again I inquire as to how much time remains.

The Speaker pro tempore. The gentleman from New York has 15\1/2\ minutes remaining, and the gentleman from Mississippi has 10\1/2\ minutes remaining.

Mr. Speaker, I would add that, again, I have been listening and listening, and there is no criticism at all of the port security. And again, rather than to take yes for an answer, we are talking about going around our committee process. The fact is, one of the reasons this bill is so good is because it was at the subcommittee level, the committee level, and then it went to the floor.

This was a long process on the port security aspect of it. Rather than just accept something coming over from the Senate at the last minute, I have enough respect for the integrity of the process of our committee that I want to replicate that when we are dealing with transit and when we are dealing with rail and working, of course, with Mr. Young. I don't want to get him nervous while he is sitting here. But it is essential that we do do it in a deliberative process.

Again, it is beyond me why, after a 6-month process where there was such bipartisanship, such working together, both here and in the Senate, that the begrudgers of the world have arrived on

the floor tonight and all they can say is there is something here that is good, though they are afraid to acknowledge it, and then they talk about something which was never part of our bill to begin with.

We dedicated ourselves to port security, and we got it done. We should be proud of that. And, again, there is a special place in life for begrudgers.

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

Mr. Speaker, I would like to thank the gentleman from New Jersey for his kind remarks about the bill, and I especially want to tell him how much it means to me that he commented on my great Irish singing voice as I was delivering my oration tonight. So, Mr. Pascrell, you are a man of great ethnic perspicacity and my admiration for you is unbounded.

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

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

Mr. Speaker will the gentlewoman yield?

First of all, I am not responsible for the germaneness rules in the Senate. Secondly, this is the bill that came back to us from the Senate.

I would just add, if the gentlewoman will yield, this is the bill that came back to us from the Senate, and I would remind the gentlewoman that unlike the transit and rail provisions, which never passed this House, the Internet gambling bill legislation did pass this House by a vote of 317-93. There was at least some nexus which was lacking with the others.

Mr. Speaker, if the gentleman will yield, I was just trying to answer the gentlewoman's question. She thought I was giving her a break.

Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days in which to revise and extend their remarks and include extraneous materials on the matter under consideration.

Mr. Speaker, I yield myself such time as I may consume. I assure the House I will not use the 14 minutes.

I also at this stage would like to commend the staff for the tremendous work they have done throughout this process. I would like to thank Mandy Bowers, Matt McCabe, Amanda Halpern, Kevin Gronberg, Diane Berry, Sterling Marchand, Kerry Kinirons, Mark Klaassen, Mike Power, and also the people on the minority staff.

In saying that, let me just say, Mr. Markey brought us into the new day, his eloquence, his soaring rhetoric brought us into the new day, but he uses the same tired arguments of yesterday, the arguments we hear time and again, the tired metaphors, the lame similes, he goes on and on.

He says Democrats were kept out of the process. Democrats were involved every step of the way, every minute, until the Internet gambling came over, which we found out about for the first time at the same time he did. Now, he may want to talk to the minority leader in the Senate and ask him why he consented to this being in, why they wanted it in. That is not my problem.

But the fact is, it is really wrong to suggest that there was any moment at all throughout the past 10 or 12 days, when at every stage of the way we ensured that the Democratic staff was there reporting back to their principals, I don't know where the gentleman from Massachusetts was. Maybe he was out buying a dog. I don't know. But the fact is if he had spoken with his staff, if he had spoken to the committee staff, if he had spoken to the ranking member, he would have known what was going on.

Also, I waited patiently for 29\1/2\ minutes listening to the opposition trying to hear one person say one negative word about the port security bill. Finally, Mr. Markey came up with his argument and he was talking about detecting radiation overseas.

The fact is, again in the spirit of bipartisanship and bicameralism, we adopted the language put forth by Senator Lautenberg in the Senate to have three pilot projects. So there we are agreeing with the Senator from New Jersey, which I guess is not good enough for the gentleman from Massachusetts.

I would also say that this legislation goes right to the heart of the issues that we are trying to address. The gentleman from Massachusetts cannot accept that.

But I will say for the other Members, certainly Mr. Pascrell, for the contributions that he made to this bill, to the ranking member, to Mr. Langevin, who has really been a leader in the whole issue of radiation portal monitors, they have been there.

So I would again say let us celebrate the fact that we are passing historic port security legislation tonight. Let us respect the fact that our committee, which is only in its second year, has passed major legislation. Let us respect the fact and acknowledge the fact that our committee paved the way. We showed the way for the Senate. We passed a bill which has been virtually intact, from the subcommittee to the committee to the House floor and now here tonight with the conference report.

And rather than begrudging, rather than saying it could have been this or it could have been that, rather than let the perfect be the enemy of the good, let's accept this good legislation, let's go forward, let us realize we made the American people far safer. And we did it because of a bipartisan effort, which should have been bipartisan right to the last moment. Unfortunately, the naysayers tried to take this over. The fact is they cannot deny the reality. This is excellent legislation that makes our country safe. We should be proud.

I urge the adoption of the resolution.

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

Mr. Speaker, I demand a recorded vote.

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.