Wednesday, October 28, 2020

Money laundering penalties made tougher in Ohio sports betting bill

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A bill that would legalize sports betting in Ohio was heavily changed Thursday to prevent people from using laundered money in the games.

House Bill 194 also has changes to ensure Ohio conforms with the federal Wire Act, which the U.S. Department of Justice has recently determined it can use to go after online gambling.

H.B. 194 is one of two measures wending through the Ohio General Assembly that would legalize sports betting, which the U.S. Supreme Court permitted in states in a decision about a year ago. The other measure is Senate Bill 111, which is different because regulation would be under the Ohio Casino Control Commission, rather than the Ohio Lottery Commission in HB 194.

HB 194 now specifies it would be a fifth-degree felony on the first offense and a fourth-degree felony on subsequent offenses to try to interfere with a sports betting facility’s submission of reports under the Bank Secrecy Act of 1970, the Federal Deposit Insurance Act and state banking laws. Rep. Dave Greenspan, a Westlake Republican who is a bill sponsor, said that the laws help the government trace laundered money and prevent it from getting into the gambling industry.

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“That’s already currently in Ohio law, so we just harmonized the bill,” he said.

The Wire Act is a 1961 federal law that makes it a crime to transmit or promote interstate or foreign wagering. In January, the U.S. Department of Justice issued a legal opinion saying it could use the Wire Act, in addition to the Unlawful Internet Gambling Enforcement Act, to go after online gaming activity.

Changes have been made throughout HB 194 to ensure all aspects of online sports wagering would be in Ohio, down to the computer servers, Greenspan said.

“In the whole bill, we talk about how this is an intrastate activity,” he said. “All the transactions have to be in Ohio. The Lottery Commission already has that intrastate environment. What we’re doing is conforming to rules of the Wire Act.”

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The Department of Justice change comes after years of pressure from Sheldon Adelson, a GOP megadonor and CEO of Las Vegas Sands, who has long been opposed to online gaming, according to the Washington Post.

Las Vegas Sands’ lobbyists have said they’re concerned about easy access for children to online games. The Justice Department said the legal opinion was not influenced by anyone outside the department, the newspaper reported.

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