June 12, 2003 – The U.S. House of Representatives passed legislation this week that would protect the rights of states and territories to license and regulate online gambling, Delegate Donna M. Christensen said Thursday.
The primary aim of the proposed Unlawful Internet Gambling Funding Prohibition Act is to curtail illegal offshore online gambling, Christensen said in a release. Toward that end, it would prohibit the use of charge cards, checks and other financial instruments "to place bets on the Internet using companies that are not licensed under state, territorial or federal law," she said
The bill was amended to specify that nothing in it infringes on states' rights. Enactment of the measure "would mean that the territory could go ahead and license Internet gambling, because it protects the rights of states and territorial governments to regulate gambling within their borders," Christensen said.
The bill passed the House by a vote of 319-104 and now goes to the U.S. Senate for consideration.
In July of 2001, the 24th Legislature by a vote of 11-3 approved licensed Internet gambling in the Virgin Islands. A month later, Gov. Charles W. Turnbull signed the measure into law, making the territory the second U.S. jurisdiction — after Nevada — to authorize online gambling and placing its regulation in the hands of the Casino Control Commission.
The legislation awarded half of the master franchise to VI Technologies, formed by St. Thomas businessmen Nick Pourzal, Michael Bornn and Tom Colameco; and the other half to St. Croix Internet Gaming Group LLP, of which Paul Arnold is a principal. Last November, the Casino Control Commission adopted Internet gaming rules and regulations to make it possible for companies to host gambling Web sites from St. Croix.
The Bush administration has publicly upheld a Clinton administration opinion that Internet casino gambling is illegal under existing federal law. However, Attorney General Iver Stridiron issued an opinion that it is legal as long as bets are placed in areas where gaming is lawful, and provided that participants are of legal age.
V.I. Solicitor General Frederick Handleman has said the ambiguity of federal laws on Internet gambling could place the territory in a position to be "grandfathered in" if the territory legalizes online gaming and the U.S. government later declares such gambling illegal.
Advocates have said that Internet gambling will bring billions of dollars into the Virgin Islands treasury as a percentage of the money wagered. Online sports wagering, casino, bingo and lottery sites were projected to attract $6 billion in bets this year, up from $4.1 billion last year and $3 billion in 2001, according to the industry research firm Christiansen Capital Advisers. More than half of the wagers are from the United States.
The governor of Nevada signed a bill in June of 2001 allowing the industry in that state, and observers said the outcome there would likely determine whether the V.I. government can clear the legal hurdles of bringing the industry to the territory.
Earlier national debate about the legality of Internet gambling hinged on the Wire Act of 1960, which prohibits the use of "a wire communication facility for the transmission in interstate or foreign commerce of bets or wagers or information assisting in the placing of bets or wagers on any sporting event or contest."
Eileen Petersen, Casino Control Commission chair, noted last fall that the 5th Circuit Court of Appeals had recently ruled that online gambling does not violate the Wire Act where no sports bets are involved. "This further strengthens the position by the Legislature that we should proceed," she said.
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