WASHINGTON — Dressed in one of his favorite orange pullover sweaters, Jim Leach resembles an avuncular college professor more than the influential politician he is in the House of Representatives.
It is precisely because of Leach’s moderate and cerebral persona that the casino industry has come to regard him as a more formidable foe than fire-breathing Virginia Republican Frank Wolf, a longtime and vocal gambling critic.
“I think Leach is much more effective than Wolf because he is less radical, and Jim honestly is highly respected on both sides of the aisle. He has a tremendous amount of clout,” said Frank Fahrenkopf, head of the American Gaming Association, the casino industry’s chief lobbying arm.
It is telling that Leach, a 59-year-old Iowa Republican who has served in Congress for 25 years, resists being described as a gambling critic. The term he prefers is skeptic.
There is nothing skeptical about a bill Leach has been pushing to ban Internet gambling by prohibiting the use of credit cards, checks and electronic fund transfers to pay online bets. The bill passed the House Financial Services Committee 34-18 on Oct. 31. Although it is unlikely to advance further this year, the House is expected to take a close look at it in 2002.
The casino industry would prefer to see Leach go away. Fahrenkopf claims the legislation could serve as a vehicle for a slew of anti-gambling amendments. The worst, in the industry’s view, would ban college sports betting at Nevada sports books — a measure the gambling lobby has thus far thwarted.
Other industry sources say an Internet gambling – Sg Online Casino ban would cut off a potentially lucrative new market for casinos, which have struggled since the terrorist attacks of Sept. 11.
The industry’s top executives are split on the issue. While MGM Mirage chief Terry Lanni is an aggressive advocate of Internet gambling, Tom Gallagher of Park Place and Phil Satre of Harrah’s argue that, so far, technology does not exist to provide effective regulation.
But the companies of all three executives already are operating Web sites just in case Internet gambling is legalized. The executives say they owe it to their shareholders to be prepared.
“I can respect an individual who says they are responsible to their stockholders,” Leach said. “But stockholder interest and the public interest are not synonymous.”
Unregulated gambling on about 1,400 offshore Web sites does not serve the public interest and poses a competitive threat to the heavily regulated casinos in Nevada and Atlantic City, Leach said. He also claimed Internet gambling lacks the redeeming social and entertainment aspects of bricks-and-mortar casinos.
“Las Vegas is much more than the casinos. It’s the entertainment, the spectacle, the Americana and now, frankly, even great art,” Leach said. “Las Vegas has become a great American community. Is that great American community going to be enhanced with the onslaught of Internet gambling or undercut? It’s hard for me to believe anything except that it’s going to be undercut.”
Money laundering is another specter Leach raises in his arguments against Internet gambling. One of his aides presented a scenario in which a money launderer could open accounts of $10,000 each at five Internet gambling sites with a credit card, certified check or a wire transfer. After betting a minimal amount, the money launderer then could pull clean money out of the accounts.
“Internet gambling is the perfect platform for money laundering,” Leach says.
Leach was able to attach his Internet gambling restriction onto a money laundering bill that was racing through Congress following the Sept. 11 terrorist attacks. But it was pulled out by House Republican leaders.
The normally phlegmatic Leach erupted. He ripped his own party’s leadership on the House floor and complained to the White House.
Asked if he talked to President Bush, Leach would only say, “I have had constructive conversations at very high levels.”
Leach is expanding his campaign against Internet gambling beyond Capitol Hill and the White House. On Nov. 9, he appeared at a luncheon at the Brookings Institute, a prominent Washington, D.C., think tank, to warn of the potential for identity theft on Internet gambling Web sites.
“One million Americans a day are giving their credit card information to an unregulated Internet gambling operation,” Leach said. “They have no idea who owns, who operates, who controls these sites. The potential for identity theft, which is the fastest growing financial crime in America, is extraordinary.”
The day after Leach’s bill passed the House Financial Services Committee, Rep. Bob Goodlatte, R-Va., reintroduced legislation calling for an outright ban of Internet gambling. Both Leach and Goodlatte proposed similar measures last year.
Although he supports Goodlatte’s bill, Leach said it is better to have the enforcement mechanisms he has proposed.
Leach also expressed concern that Goodlatte’s bill would be a target for special-interest groups seeking exemptions. That scenario unfolded last year when Goodlatte proposed similar legislation that included exemptions for the horse-racing industry.
The Leach and Goodlatte bills have been referred to the House Judiciary Committee, which reportedly is leaning toward Goodlatte’s approach.
One reason is that credit card companies don’t like Leach’s bill, complaining that it would place too much of a burden on them to track and void Internet gambling transactions.
Leach said he has been puzzled by these and other arguments against his bill. Although he has not made any charges, he has hinted that some lawmakers are being influenced by financial contributions from casinos, credit card companies and other interest groups.
“I consider myself politically a moderate, but I am radical on one subject, and that is the need for campaign (finance) reform,” Leach said.