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Berkley: Enforcement Act Is Already a Bust

Over the past 80 years, Las Vegas casinos have changed from dusty Western saloons with a poker table and one-armed bandits to glittering 21st-century resort destinations known around the globe. Along with this evolution, Nevada has developed the world’s foremost expertise in the regulation of the gaming industry.

As gaming in Nevada grew and diversified, regulations were designed to keep pace with technological changes and other business innovations. These rules, combined with effective enforcement, allow players to know they are getting a fair bet, protect the house against cheating and stop money laundering and other crimes.

Unlike today’s tightly regulated Nevada casinos, the Internet remains a “wild frontier” for Americans who log on to place a bet on the Web. Instead of being protected by regulations designed to prevent rip-offs, fraud and identity theft, these Americans are being left vulnerable as a result of the moralistic Unlawful Internet Gambling Enforcement Act.

This failed legislation sought to pin a cyber “tin star” to the chest of the financial industry with the idea that these companies would become the new “virtual sheriff” in town and that together, they would prevent anyone under U.S. law from taking part in any illegal online gaming.

In reality, countless Americans logged on to their computers June 1 — the day the act took effect — and placed bets over the Internet. In the time it takes to read this sentence, thousands of players from Alaska to Hawaii and across the rest of the U.S. will have participated in some form of online wagering. And these men and women will keep right on playing, knowing that the law doesn’t even make clear what is illegal gambling and what is not when it comes to the Internet.

Just as our nation learned from prohibition, when the law actually helps the bad guys instead of protecting Americans against criminals — and only makes matters worse all around — it’s time to start over.

I firmly believe adults have the right to choose how they spend their leisure time and money, and that includes the ability to participate in Internet gaming from the privacy of their own homes and computers. That is why I vehemently opposed the UIGEA when it came before Congress and why I continue to support the efforts of House Financial Services Chairman Barney Frank (D-Mass.) — and others — to replace what would be better called the Unworkable Internet Gambling Enforcement Act.

One key reason is the UIGEA’s fatally flawed enforcement mechanism. Banks and other financial institutions are required under the law to determine in each case whether a transaction is legal because it could possibly involve an activity that is considered gaming. This requirement comes despite the fact that no definition was provided of exactly what activities constitute those that are supposedly banned. And there was never a penalty intended against those placing the bet, only against the banks now tasked with policing customers to stop any and all cyberbets.

Tapping the expertise developed by Nevada’s world-class gaming regulators, and those in other states, would enable development of a new framework that would give adults the right to choose for themselves to visit a virtual casino or play in an online poker game with competitors drawn from around the planet. Every day the U.S. fails to act, we are also missing out on new business opportunities that could flow to legally authorized American operators of regulated Internet gaming ventures.

In addition, technology has dramatically improved identity verification and enhanced other protections designed to prevent those who are underage from doing on the Internet what they could not do in person during a visit to any resort casino on the Las Vegas Strip.

It’s time to let the UIGEA ride off into the sunset and to replace the virtual Wild, Wild West it has created with workable regulations designed to protect American adults — in numbers that only continue to grow — when they choose to place a bet over the Internet.

Rep. Shelley Berkley is a Nevada Democrat.

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