Visa and the U.S

A U.S. House subcommittee met last Thursday to discuss the credit card- and financial services industries’ roles in online gambling. And from all accounts, the meeting only served to further polarize the opposing sides.

The House Financial Services Subcommittee on Oversight and Investigations was convened to examine the relationship between online gambling and financial service companies as part of a growing demand that the government limit access to Internet wagering.

Representatives from the Interactive Gaming Council, the National Association of State and Provincial Lotteries, the National Thoroughbred Racing Association, the National Collegiate Athletic Association and Visa, met before the committee to argue their cases. But the deck was stacked against the online gambling industry and the credit card companies before they even reached the meeting.

One of the key subcommittee members was Rep. James Leach of Iowa, who has sponsored a bill that would make it illegal to use checks, debit-, and credit cards to pay debts for, or receive profits from, Internet gambling.

The hearing also comes just as Rep. Robert Goodlatte is preparing to re-launch his online gambling prohibition bill. The bill received majority support in the House last year, but failed to pass because it did not receive a two-thirds vote. Goodlatte wants to ban most forms of Net wagering, and plans to include many of Leach’s financial provisions in his revised legislation.

Several issues came to the fore during Thursday’s hearing. Experts from both sides told the subcommittee that it is difficult to prevent children from accessing gambling sites, that it is difficult to regulate most casino operations, and that problem gamblers can quickly get in over their heads.

Notwithstanding, representatives from the gaming industry told the subcommittee that efforts to ban online gambling would be difficult and that the U.S. government would be better off trying to regulate the industry.

The committee was also told that efforts to prevent credit card companies from processing transactions would likely fail because of the use of alternative payment solutions such as PayPal.

Government legislation that would restrict the business practices of the credit card companies proved to be a particularly contentious issue during the hearing. Mark McCarthy, head lobbyist for Visa USA Inc, said gamblers could get around financial regulations by using online payment companies. He also added that Leach’s proposed bill would put an unreasonable burden on Visa and other financial service companies to enforce federal regulations.