BALTIMORE - Two state attorneys general say pending Internet gambling legislation will undermine their states' authority to regulate the industry.
Florida's Bill McCollum and Maryland's Doug Gansler wrote just that to two members of the House Committee on Financial Services. House Resolution 2046, Gansler and McCollum say, will replace state regulations of Internet gambling with a federal licensing program.
"H.R. 2046 would throw open the doors of the United States and allow for the greatest expansion of legalized gambling in American history," Gansler said. "This attempt to divest the states of their gambling enforcement power is sweeping and unprecedented.
"We oppose this proposal, and any other proposal that hinders the rights of States to prohibit or regulate gambling by their residents."
The letter, which can be found here, was written to committee chairman Barney Frank (D-Mass.) and ranking member Spencer Bachus (R-Ala.).
H.R. 2046, also called "Internet Gambling Regulation and Enforcement Act of 2007," was introduced in April and is still in its infancy. It would create the Internet Gambling Licensing Program, to be governed by the Director of the Financial Crimes Enforcement Network.
Also, it prescribes requirements for the licensing of Internet betting and shields activities involving investment banking, payment and transaction processing and financial transactions from liability if they are conducted properly.
States, Indian tribes and sporting leagues would be allowed to prohibit Internet gambling licenses.
McCollum and Gansler call the bill a threat to last year's Unlawful Gambling Enforcement Act, which was passed after heavy urging from 49 state attorneys general. It allowed regulation of Internet gambling to remain on the state level.
An opt-out portion of the legislation that allows states to keep Internet gambling illegal is not effective, in that opt-outs do not preserve the right of states to place conditions on legal types of gambling and will likely be challenged before the World Trade Organization.