Kyl’s Pro-UIGEA letter

Here is a letter written by Senator Jon Kyl (R-AZ) and Representative Spencer Bachus (R-AL) sent to the US Congress during the week of April 24th, 2008. It is analyzed in the article "A Reader for Kyl’s Letter."

Dear Colleague:

For the past year, the Internet gambling lobby and its congressional supporters have worked hard to gut the Unlawful Internet Gambling Enforcement Act of 2006 (“UIGEA”). Most recently, Representatives Barney Frank and Ron Paul introduced H.R. 5767, which would prohibit federal agencies from issuing any regulations that would give effect to UGIEA.

The Frank-Paul bill’s prohibition on issuing Internet gambling regulations would eliminate the most effective enforcement tool available for stopping illegal online gambling. The bill would result in the de facto repeal of federal and state gambling control laws and would likely result in a massive expansion of gambling on the Internet.

We urge you not to be deceived by the claims of the Internet gambling interests. During this Congress alone, offshore Internet gambling enterprises have paid millions of dollars to lobbyists in an effort to overturn UIGEA. For example, according to a recent Roll Call article, those trying to thwart UIGEA are “shelling out eye-popping sums for K Street’s top talent” (3/31/08, “Internet Gambling Ban Back on Table”).

The Internet gambling industry, which was making billions of dollars a year taking illegal bets from Americans, was furious when UIGEA was enacted into law after a decade of congressional debate and development. To enforce existing federal and state laws banning Internet gambling, UIGEA required the government agencies with the relevant knowledge and expertise — the Federal Reserve and the Department of Treasury, in consultation with the Department of Justice — to issue regulations to enforce existing federal and state laws that make Internet gambling illegal. Immediately after Congress passed UIGEA, many online gambling outfits closed their doors because of the prospect that existing laws would finally be strongly enforced.

Now, in an effort to recapture billions of dollars in illicit profits, Internet gambling interests are trying to convince Congress that the regulations will be ineffective. But, if the regulations mandated by UIGEA will be ineffective against illegal online gambling, why are Internet gambling interests spending millions of dollars to effectively repeal UIGEA?

The reason: UIGEA is already beginning to cripple them. The Annenberg Public Policy Center, which conducts the annual National Annenberg Survey of Youth, found that weekly Internet gambling among college-aged youth declined nearly 75% between 2006 and 2007, falling from 5.8% to 1.5% just one year after the enactment of UIGEA. Internet gambling is highly addictive, as it brings the casino into the home and office, and it is particularly attractive to minors and young adults. While no law enforcement is perfectly effective, the Annenberg data shows that passage of UIGEA, which called for financial regulations to enforce Internet gambling prohibitions, has already significantly reduced the prevalence of Internet gambling in the United States, even though regulations required to fully implement the law have not been finalized.

Please oppose any efforts to rollback UIGEA or to delay finalization of the regulations.

Jon Kyl
Ranking Member
Senate Judiciary Committee

Spencer Bachus
Ranking Member
House Financial Services Committee Subcommittee on Terrorism, Technology and Homeland Security