[House Report 104-440]
[From the U.S. Government Publishing Office]
104th Congress Rept. 104-440
HOUSE OF REPRESENTATIVES
1st Session Part 1
_______________________________________________________________________
NATIONAL GAMBLING IMPACT AND POLICY COMMISSION ACT
_______
December 21, 1995.--Ordered to be printed
_______________________________________________________________________
Mr. Hyde, from the Committee on the Judiciary, submitted the following
R E P O R T
together with
DISSENTING VIEWS
[To accompany H.R. 497]
[Including cost estimate of the Congressional Budget Office]
The Committee on the Judiciary, to whom was referred the
bill (H.R. 497) to create the National Gambling Impact and
Policy Commission, having considered the same, report favorably
thereon with an amendment and recommend that the bill as
amended do pass.
TABLE OF CONTENTS
Page
The Amendment.................................................... 2
Purpose and Summary.............................................. 4
Background and Need for Legislation.............................. 4
Background................................................... 4
The Hyde Substitute.......................................... 6
Specific Issues.............................................. 7
Federal Jurisdiction..................................... 7
Appointment of the Commission............................ 8
Information Gathering.................................... 8
Budget Considerations.................................... 9
Hearing.......................................................... 9
Committee Consideration.......................................... 11
Vote of the Committee............................................ 11
Committee Oversight Findings..................................... 12
Committee on Government Reform and Oversight Findings............ 12
New Budget Authority and Tax Expenditures........................ 13
Congressional Budget Office Estimate............................. 13
Inflationary Impact Statement.................................... 14
Section-by-Section Analysis...................................... 14
Agency Views..................................................... 16
Changes in Existing Law Made by the Bill, as Reported............ 16
Dissenting Views................................................. 17
The amendment is as follows:
Strike out all after the enacting clause and insert in lieu
thereof the following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``National Gambling Impact and Policy
Commission Act''.
SEC. 2. ESTABLISHMENT OF COMMISSION.
There is established a commission to be known as the National
Gambling Impact and Policy Commission (in this Act referred to as the
``Commission'').
SEC. 3. MEMBERSHIP.
(a) Number and Appointment.--
(1) Generally.--The Commission shall be composed of 9
members, appointed from persons specially qualified by training
and experience to perform the duties of the Commission, as
follows:
(A) three appointed by the Speaker of the House of
Representatives;
(B) three appointed by the majority leader of the
Senate; and
(C) three appointed by the President of the United
States.
(2) Consultation before appointment.--Before the appointment
of members of the Commission (including to any vacancies), the
appointing authorities shall consult with each other to assure
that the overall membership of the Commission reflects a fair
and equitable representation of various points of view.
(3) Timing of appointments.--The appointing authorities shall
make their appointments to the Commission not later than 60
days after the date of the enactment of this Act.
(b) Designation of the Chairman.--The Speaker of the House of
Representatives and majority leader of the Senate shall designate a
Chairman and Vice Chairman from among the members of the Commission.
(c) Period of Appointment; Vacancies.--Members shall be appointed
for the life of the Commission. Any vacancy in the Commission shall not
affect its powers, but shall be filled in the same manner as the
original appointment.
(d) Initial Meeting.--No later than 60 days after the date on which
all members of the Commission have been appointed, the Commission shall
hold its first meeting.
(e) Meetings.--The Commission shall meet at the call of the
Chairman.
(f) Quorum.--A majority of the members of the Commission shall
constitute a quorum, but a lesser number of members may hold hearings.
SEC. 4. DUTIES OF THE COMMISSION.
(a) Study.--
(1) In general.--It shall be the duty of the Commission to
conduct a comprehensive legal and factual study of--
(A) gambling in the United States, including State-
sponsored lotteries, casino gambling, pari-mutuel
betting, and sports betting; and
(B) existing Federal, State, and local policy and
practices with respect to the legislation or
prohibition of gambling activities and to formulate and
propose such changes in those policies and practices as
the Commission shall deem appropriate.
(2) Matters studied.--The matters studied by the Commission
shall include--
(A) the economic impact of gambling on the United
States, States, political subdivisions of States, and
Indian tribes, both in its positive and negative
aspects;
(B) the economic impact of gambling on other
businesses;
(C) an assessment and review of political
contributions and their influence on the development of
public policy regulating gambling;
(D) an assessment of the relationship between
gambling and crime;
(E) an assessment of the impact of pathological, or
problem gambling on individuals, families, social
institutions, criminal activity and the economy;
(F) a review of the demographics of gamblers;
(G) a review of the effectiveness of existing
practices in law enforcement, judicial administration,
and corrections to combat and deter illegal gambling
and illegal activities related to gambling;
(H) a review of the costs and effectiveness of State
and Federal gambling regulatory polity, including as it
relates to Indian gambling;
(I) an assessment of the effects of advertising
concerning gambling, including--
(i) whether advertising has increased
participation in gambling activity;
(ii) the effects of various types of
advertising, including the sponsorship of
sporting events;
(iii) the relationship between advertising
and the amount of the prize to be awarded; and
(iv) an examination of State lottery
advertising practices, including the process by
which States award lottery advertising
contracts;
(J) a review of gambling that uses interactive
technology, including the Internet;
(K) a review of the extent to which casino gambling
provides economic opportunity to residents of
economically depressed regions and to Indian tribes;
(L) a review of the effect of revenues derived from
State-sponsored gambling on State budgets; and
(M) such other relevant issues and topics as
considered appropriate by the Chairman of the
Commission
(b) Report.--No later than 2 years after the Commission first
meets, the Commission shall submit a report to the President and the
Congress which shall contain a detailed statement of the findings and
conclusions of the Commission, together with its recommendations for
such legislation and administrative actions as it considers
appropriate.
SEC 5. POWERS OF THE COMMISSION.
(a) Hearings and Subpoenas.--
(1) The Commission may hold such hearings, sit and act at
such times and places, administer such oaths, take such
testimony, receive such evidence, and require by subpoena the
attendance and testimony of such witnesses and the production
of such materials as the Commission considers advisable to
carry out the purposes of this Act.
(2) Attendance of witnesses.--The attendance of witnesses and
the production of evidence may be required from any place
within the United States.
(3) Failure to obey a subpoena.--If a person refuses to obey
a subpoena issued under paragraph (1), the Commission may apply
to a United States district, court for an order requiring that
person to appear before the Commission to give testimony,
produce evidence, or both, relating to the matter under
investigation. The application may be made within the judicial
district where the hearing is conducted or where that person is
found, resides, or transacts business. Any failure to obey the
order of the court may be punished by the court as civil
contempt.
(4) Service of subpoenas.--The subpoenas of the Commission
shall be served in the manner provided for subpoenas issued by
a United States district court under the Federal Rules of Civil
Procedure for the United States district courts.
(5) Service of process.--All process of any court to which
application is to be made under paragraph (3) may be served in
the judicial district in which the person required to be served
resides or may be found.
(b) Information From Federal Agencies.--The Commission may secure
directly from any Federal department or agency such information as the
Commission considers necessary to carry out the provisions of this Act.
Upon request of the Chairman of the Commission, the head of such
department or agency may furnish such information to the Commission.
(c) Detail of Government Employees.--Any Federal Government
employee may be detailed to the Commission without reimbursement, and
such detail shall be without interruption or loss of civil service
status or privilege.
SEC. 6. COMMISSION PERSONNEL MATTERS.
(A) Compensation of Members.--Subject to the limitation provided in
subsection (e), each member of the Commission who is not an officer or
employee of the Federal Government shall be compensated at a rate equal
to the daily equivalent of the annual rate of basic pay prescribed for
level IV of the Executive Schedule under section 5315 of title 5,
United States Code, for each day (including travel time) during which
such member is engaged in the performance of the duties of the
Commission. All members of the Commission who are officers or employees
of the United States shall serve without compensation in addition to
that received for their services as officers or employees of the United
States.
(b) Travel Expenses.--Subject to the limitation provided in
subsection (e), the members of the Commission shall be allowed travel
expenses, including per diem in lieu of substance, at rates authorized
for employees of agencies under subchapter I of chapter 57 of title 5,
United States Code, while away from their homes of regular places of
business in the performance of services for the Commission.
(c) Staff.--
(1) In general.--The Chairman of the Commission may, without
regard to the civil service laws and regulations, appoint and
terminate an executive director and such other additional
personnel as may be necessary to enable the Commission to
perform its duties. The employment of an executive director
shall be subject to confirmation by the Commission.
(2) Compensation.--Subject to the requirements of subsection
(e), the executive director shall be compensated at the rate
payable for level V of the Executive Schedule under section
5316 of title 5, United States Code, the Chairman of the
Commission may fix the compensation of other personnel without
regard to the provisions of chapter 51 and subchapter III of
chapter 53 of title 5, United States Code, relating to
classification of positions and General Schedule pay rates,
except that the rate of pay for such personnel may not exceed
the rate payable for level V of the Executive Schedule under
section 5316 of such title.
(d) Procurement of Temporary and Intermittent Services.--The
Chairman of the Commission may procure temporary and intermittent
services under section 3109(b) of title 5, United States Code, at rates
for individuals which do not exceed the daily equivalent of the annual
rate of basic pay prescribed for level V of the Executive Schedule
under section 5316 of such title.
(e) Limitation.--No payment may be made under the authority of this
section except to the extent provided for in advance in an
appropriation for this purpose.
SEC. 7. TERMINATION OF THE COMMISSION.
The Commission shall terminate 30 days after the date on which the
Commission submits its report under section 4.
purpose and summary
H.R. 497 would establish a national commission to study the
impact of gambling. The nine-member commission would conduct
the study over a two-year period. The bill specifies a number
of topics that the Commission will study encompassing many
aspects of gambling. At the conclusion of its study, the
Commission will make recommendations as to any appropriate
changes to gambling policy. After completing its study, the
Commission will terminate its existence.
background and need for the legislation
Background
The Commission on the Review of the National Policy Toward
Gambling published the federal government's last national study
of gambling in 1976. Since that time, legalized gambling has
grown exponentially. According to the American Gaming
Association (AGA), some form of legalized gambling now exists
in 48 of the 50 states. Thirty-six states and the District of
Columbia now have state lotteries--rapid growth from the one
state lottery begun by New Hampshire in 1963. The AGA reports
that in 1994, Americans made more than 125 million visits to
casinos. In short, legalized gambling is now a significant
social and economic force in this country.
Under current law, most gambling operations are regulated
by state law, either through state-sponsored gambling like
lotteries or through state regulation of private gambling
operations. The opponents of gambling claim that in legislative
battles in the states, those who gambling have vast amounts of
money to spend on lobbying, whereas the opponents usually do
not. As a result, the opponents say, the voices of those
favoring gambling drown out those who oppose gambling. In these
forums, supporters of gambling typically argue that legalized
gambling will provide jobs and generate tax revenues. These
claims of painless revenue generation can be attractive
politically.
Legalized gambling may have negative effects. These effects
include increased crime in the areas around gambling
establishments and increased incidence of compulsive gambling.
At its hearing on H.R. 497, the Committee heard testimony about
the human costs resulting from problem gambling. All of these
problems have ripple effects--for example, negative effects on
family members and family life, increased criminal justice
costs, increased welfare costs, and lost productivity. The
Committee also heard economic analysis about the negative
effects of gambling on other businesses. For example, gambling
opponents argue that the number of restaurants in Atlantic
City, New Jersey dropped dramatically after the advent of
casino gambling because the casinos drew money out of those
businesses. All of this testimony revealed the social costs of
gambling that may go uncounted.
At the hearing, gambling proponents countered that any
increased crime surrounding gambling operations is nothing more
than the natural result of the increased number of people in
the area. They argued that a similar effect occurs around other
entertainment attractions. Likewise, they contended that
gambling operations do not draw dollars out of surrounding
businesses more than any other entertainment business does.
Finally, supporters of gambling acknowledged the existence of
problem gambling, but contended that the industry is making
efforts to address it.
Debates over whether to legalize various forms of gambling
in the states do not end the issue--other facets of gambling
also contribute to the overall picture. Gambling operations run
by Indian tribes have grown rapidly since the passage of the
Indian Gaming Regulatory Act, a federal law passed in 1988.
Many state government officials feel that, under this law, they
do not have sufficient control over Indian gambling operations
within their states and that Indian gambling operations have
negative side effects on surrounding areas. On the other hand,
the Indian tribes that have decided to undertake gambling
operations generally feel that those operations have provided
unprecedented economic opportunity to their members. Indian
tribes, for example, have used gambling revenues to build
houses, schools, roads, water and sewer systems, and health
care facilities for their people.
Illegal gambling operations also exist on a remarkable
scale. At its hearing, the Committee listened to testimony from
a former mob bookmaker from Chicago now turned government
informant. This informant testified about the vast size of
illegal gambling operations. He also testified that illegal
gambling operations welcome new forms of legalized gambling
because they teach more and more people to gamble thereby
increasing the number of illegal gamblers. Given that
testimony, illegal gambling must be treated, along with
legalized gambling, as part of one large interrelated issue.
The testimony about the social costs and problems
associated with gambling operations, as well as the testimony
about the positive effects of gambling raise serious questions
that should be thoroughly examined by an unbiased body. As a
result, the Committee believes that there should be a
comprehensive study of the impact of gambling nationwide. The
tremendous growth of all forms of gambling is a national issue.
Once the Commission completes its study, policymakers at all
levels of government will have access to a broad array of
information so that they can make the best possible judgments.
The Hyde substitute
Notwithstanding the demonstrated need for a study, a number
of groups raised concerns about the language of H.R. 497 as
introduced. In an effort to improve the bill, Chairman Hyde
drafted an amendment in the nature of a substitute which
addressed several of the issues raised by critics. At the
markup on November 8, 1995, the Committee adopted the Hyde
substitute by voice vote and rejected all other amendments to
the substitute.
Initially, H.R. 497 established a nine-member Commission,
with one member required to be a Governor of a State. This
requirement caused some concern among various groups who felt
that they, too, should have a specific Commissioner appointed
to safeguard their respective interest. The Hyde substitute
deletes the language that specifies that a Governor must be on
the Commission. The appointing authorities may choose any nine
members whom they believe will do the best and most effective
job. Rather than dictate the actual makeup of the Commission,
the Hyde substitute adds language requiring the appointing
authorities to consult with one another to guarantee that the
overall makeup of the Commission will reflect a fair and
equitable representation of various points of view.
The Hyde substitute modifies several areas of study
included in the original bill to assure the most thorough
results possible. For example, some Committee members expressed
concern that some types of gambling would not be part of the
Commission's study. The substitute clarifies that the
Commission is to study all forms of commercial gambling,
including state lotteries, casino gambling, pari-mutuel
betting, and sports betting. The substitute also adds language
to focus the Commission's attention on the effect revenues
derived from State-sponsored gambling may have on State
budgets.
Other critics of the bill, especially representatives of
Indian gambling, feared that the Commission would not study
positive economic effects of gambling. Although they do not
object to a careful review of the overall economic impact,
these groups believe that gambling generates substantial
revenue and many positive effects for Indian tribes. The Hyde
substitute adds language to ensure that both the positive and
negative economic aspects of gambling will be considered. It
also adds language to further guarantee that the Commission
will study the extent to which casino gambling provides
economic opportunity for economically depressed regions and
Indian tribes.
The section of the bill directing the Commission to study
whether the States, rather than the Federal government, should
regulate Indian gambling also trouble Indian gambling
operators. These groups relied on the Indian Gaming Regulatory
Act of 1988, 25 U.S.C. Sec. 2701 et seq., as well as the
Supreme Court's decision in California v. Cabazon Band of
Mission Indians, 480 U.S. 202 (1987), to bolster their claim
that the regulation of Indian gambling is a matter exclusively
within the jurisdiction of the Federal government. The Hyde
substitute narrows the language, but takes into account both
the States' interests and the Indians' concerns. Specifically,
it directs the Commission to review the costs and effectiveness
of State and Federal gambling regulatory policy, including as
they may relate to Indian gambling.
Critics also questioned the requirement that the Commission
only study the political contributions of gambling businesses
and promoters. The Hyde substitute clarifies that the study of
political contributions will include all contributions that
influence public policy on gambling, not just those of gambling
operators.
Members of the Committee expressed particular concern about
the issue of advertising about gambling activities. The Hyde
substitute adds detailed language directing the Commission to
assess the impact gambling advertising may have including:
whether participation in gambling has increased due to
advertising, the effects of various types of gambling
advertising, the relationship between advertising and the
amount of the prize to be awarded, and an examination of state
lottery advertising practices.
Witnesses at the hearing expressed interest in the spread
of gambling through interactive technologies. The Hyde
substitute adds language requiring the Commission to review
interactive gambling, specifically gambling on the Internet.
The Hyde substitute shortens the period for the
Commission's study. The substitute makes the report due two
years after the Commission's initial meeting, rather than
three. The Committee believes this is a much needed study, and
this modification will expedite the Commission's efforts.
Moreover, shortening the time period for the study will reduce
the costs involved.
Finally, the Hyde substitute adds section 6(e) and related
language, to clarify that the salaries and travel expenses
authorized in H.R. 497 should not be construed as entitlements.
This change assures that the Committee's responsibilities under
the budget resolution are not altered because of this bill.
Other technical and conforming changes were also made in the
Hyde substitute.
Specific issues
Federal jurisdiction
Some critics of H.R. 497 have argued that because of the
Tenth Amendment, Congress has no power to establish the
Commission. This argument fails for several reasons. The
critics based this argument on the premise that this Commission
would regulate gambling and that the regulation of gambling has
traditionally been a state matter. H.R. 497 empowers the
Commission to conduct a study--it does not empower the
Commission to regulate gambling in any way. Federal regulation
of gambling is not in issue at this time.
The nationwide phenomenon of gambling involves many aspects
of interstate commerce. For example, many gamblers cross state
lines to travel to gambling operations. That alone is enough to
bring gambling within the interstate commerce clause. In
addition, insofar as the bill relates to Indian gambling, it
falls within the power of Congress to regulate commerce with
the Indian tribes.
Gambling, and the public corruption that has come with it
in some instances, implicate a variety of federal criminal
statues. Moreover, Congress has enacted numerous criminal and
civil statues directed specifically at gambling, including
gambling ships, 18 U.S.C. Sec. Sec. 1081-84; Indian gambling
operations, 18 U.S.C. Sec. Sec. 1166-68; lotteries, 18 U.S.C.
Sec. Sec. 1301-07; obstruction of state investigations of
gambling, 18 U.S.C. Sec. 1511; interstate transportation of
wagering paraphernalia, 18 U.S.C. Sec. 1953; racketeering, 18
U.S.C. Sec. 1961 (including state crimes relating to gambling
within the definition of ``racketeering activity''); and the
Interstate Horse Racing Act, 15 U.S.C. Sec. Sec. 3001-07. The
Committee is not aware of any instance in which any of these
statutes has been held to exceed the power of Congress to
regulate interstate commerce. In short, gambling is within the
legislative jurisdiction of Congress under Article I of the
Constitution.
Even is gambling were not so clearly within the interstate
commerce power, Congress would have the authority to pursue a
study. Given its broad oversight authority, Congress can look
into any matter least for the limited purpose of determining
whether it is properly within its legislative powers.
Appointment of the Commission
As discussed above, the Hyde substitute adds language that
requires the appointing authorities (i.e., the President, the
Majority Leader of the Senate, and the Speaker of the House of
Representatives) to consult together to ensure that the overall
makeup of the Commission reflects as fair and equitable
representation of various points of view. In doing so, the
Committee expects that the authorities may consider for
appointment representatives of various interested groups
including, gambling proponents and opponents, state gambling
regulators, federal and state prosecutors, Indian gambling
operators, professionals who treat compulsive gamblers, casino
operators, activists who have opposed gambling referenda, state
lottery officials, and representatives of non-gambling
businesses in areas around gambling operations. The foregoing
list is meant to be illustrative of the types of people who
might be appointed. Inclusion in the list does not mean that a
member of that group must be appointed, nor does the failure to
mention a particular interest group mean that its
representatives should not be considered. In short, the
appointing authorities should use their best judgment to bring
about a fair and equitable commission.
In addition, the Committee hopes and expects that in making
their appointments to the Commission, the Majority Leader of
the Senate and the Speaker of the House of Representatives will
follow the longstanding custom of allowing the respective
Minority Leaders to make one of the three appointments allotted
to each body.
Information gathering
Section 5(a) of the Hyde substitute provides for a general
subpoena power. As with all such general subpoena powers,
normal restrictions on the subpoena power, including
privileges, shall apply. See, e.g., United States v. Calandra,
414 U.S. 338, 346 (1974) (``the grand jury's subpoena is not
unlimited * * * [the grand jury] may not itself violate a valid
privilege, whether established by the Constitution, statutes,
or the common law.'') If the recipient raises objections to the
subpoena, the Commission may litigate them in federal district
court in a civil enforcement proceeding.
Section 5(b) of the Hyde substitute provides that the
Commission may seek relevant information from federal agencies
and that the agencies ``may'' provide such information. The
bill is introduced provided that the agencies ``shall'' provide
the information. The Department of Justice was concerned that
the mandatory language might require it to turn over sensitive
law enforcement information to the Commission. See Agency Views
Section, below. For that reason, the Hyde substitute changed
the wording from ``shall'' to ``may.'' However, the Committee
intends that federal agencies should fully cooperate in
providing relevant information to the Commission except for the
law enforcement information described and other categories of
information protected by law.
Budget considerations
Section 5(c) provides that federal government employees may
be temporarily detailed to work for the Commission. In the same
spirit of cooperation, the Committee considered placing
language in the substitute that would have allowed federal
agencies to provide to the Commission office space, technical
assistance, and the like. Because of fears that such language
might be construed as creating new budget authority, the
Committee did not add it. However, it the extent that it is
feasible within the existing budgetary framework, the Committee
intends that federal agencies should provide such assistance to
the Commission, particularly when such assistance can save
money for the government as a whole.
Likewise, the Committee inserted section 6(e) and related
language into the substitute to clarify that the salaries and
travel expenses authorized are not entitlements for budget
purposes. Rather, they are subject to appropriations being made
in subsequent appropriations acts.
hearing
The full Judiciary Committee held a hearing on H.R. 497 on
September 29, 1995. Testimony was received from 15 witnesses,
including eight members of Congress. The Committee received
additional material submitted by 15 individuals and
organizations.
At the September 29 hearing, the first panel of witnesses
consisted of the eight members of the Senate and House of
Representatives, including Congressman Frank Wolf of Virginia,
the principal sponsor of H.R. 497 in the House. Congressman
Wolf testified about the rapid proliferation of gambling in the
United States and the harmful side effects associated with this
growth. He explained that he believed an objective study by a
national commission would benefit all citizens.
The Nevada delegation, Congressman John Ensign,
Congresswoman Barbara Vucanovich, Senator Richard Bryan and
Senator Harry Reid, testified regarding the positive effects
the gambling industry has had on the State of Nevada and other
states. They expressed the view that a federal study is an
unnecessary waste of government resources because the states
can conduct their own studies. Congressman Frank LoBiondo,
whose district includes Atlantic City, New Jersey, testified
concerning the strict controls his state places on the gambling
industry and argued that the individual states are the best
entities to conduct gambling studies.
Senator Richard Lugar of Indiana, a sponsor of the
companion Senate legislation, testified that he believed
communities embrace gambling as a quick fix to budget problems
without having all the necessary facts, and he further noted
that the recent growth of gambling via the Internet has broad
federal implications. Senator Paul Simon of Illinois, also a
sponsor of the Senate legislation, testified as to the negative
effects gambling has had on states, including the corruption of
some state legislatures.
The second panel consisted of one person, Mr. William
Jahoda, a former member of the Chicago mob turned Federal
informant. He testified as to the involvement of organized
crime in illegal gambling operations and contended that any
expansion of State-controlled gambling inevitably results in an
increase in the market share of illegal gambling operations
because such expansions teach more people to gamble. However,
Mr. Jahoda also noted that, to the best of his knowledge,
organized crime does not control legalized gambling operations.
The third panel consisted of representatives of six
interested parties. The first to speak was Mr. Paul Ashe,
President of the National Council on Problem Gambling. He
testified as to the prevalence and demographics of compulsive
or problem gambling, as well as the treatment and support
services which are available. He stated that the American
Medical Association, American Psychiatric Association, and
other medical groups, all recognize pathological gambling as a
health issue. Mr. Frank Fahrenkopf, Jr., President and Chief
Executive Officer of the American Gaming Association, testified
that he felt that regulation and studies of gambling should be
left to the states and contended that the Federal government
had no jurisdiction over this issue. Mr.. Fahrenkopf
acknowledged the issue of problem gambling and stated that the
industry is making efforts to address the problem through
public education and corporate training programs. Mr. Tom Grey,
Executive Director of the National Coalition Against Legalized
Gambling, testified as to his group's grassroots efforts to
halt the spread of gambling throughout the country. Economics
Professor Earl L. Grinols of the University of Illinois
summarized the main economic issues involved in gambling,
including employment rates, revenue shares, social costs, and
other externalities. Mr. Richard G. Hill, Chairman of the
National Indian Gaming Association, testified about positive
effects gambling operations have had for Indian tribes,
including economic development, job creation and tribal self-
sufficiency. He stated that his group does not object to a
fairly conducted study, provided that all forms of commercial
gambling are studied, not just Indian gambling. The final
witness was Mr. Jeremy Margolis of Altheimer & Gray, a former
federal prosecutor and the former director of the Illinois
State Police Department during the enactment of the Riverboat
Gambling Act in Illinois. Mr. Margolis testified that he
believes there is no relationship between casino gambling and
street crime.
committee consideration
On November 8, 1995, the full Committee met in open session
and ordered H.R. 497 favorably reported, as amended, by a voice
vote, a quorum being present.
vote of the committee
The following roll calls occurred during Committee
deliberations on H.R. 497 (November 8, 1995):
1. An amendment by Mr. Frank to the Hyde amendment in the
nature of substitute to add additional items to be studied by
the Commission. The amendment was defeated by a vote of 4 to
25. [See attached Rollcall No. 1]
rollcall no. 1
Subject: H.R. 497, National Gambling Impact and Policy
Commission Act--Frank amendment to the Hyde substitute adding
additional items to be studied and reported on by the
Commission. Defeated: 4 to 25.
------------------------------------------------------------------------
Ayes Nays Present
------------------------------------------------------------------------
Mr. Moorhead............................. ........ X .........
Mr. Sensenbrenner........................ ........ X .........
Mr. McCollum............................. ........ X .........
Mr. Gekas................................ ........ X .........
Mr. Coble................................ ........ X .........
Mr. Smith (TX)........................... ........ X .........
Mr. Schiff............................... ........ X .........
Mr. Gallegly............................. ........ ........ .........
Mr. Canady............................... ........ X .........
Mr. Inglis............................... ........ X .........
Mr. Goodlatte............................ ........ X .........
Mr. Buyer................................ ........ X .........
Mr. Hoke................................. ........ X .........
Mr. Bono................................. ........ X .........
Mr. Heineman............................. ........ X .........
Mr. Bryant (TN).......................... ........ X .........
Mr. Chabot............................... ........ X .........
Mr. Flanagan............................. ........ X .........
Mr. Barr................................. ........ X .........
Mr. Conyers.............................. ........ X .........
Mrs. Schroeder........................... ........ ........ .........
Mr. Frank................................ X ........ .........
Mr. Schumer.............................. ........ ........ .........
Mr. Berman............................... ........ ........ .........
Mr. Boucher.............................. ........ X .........
Mr. Bryant (TX).......................... ........ X .........
Mr. Reed................................. ........ X .........
Mr. Nadler............................... X ........ .........
Mr. Scott................................ ........ X .........
Mr. Watt................................. ........ ........ .........
Mr. Becerra.............................. ........ ........ .........
Mr. Serrano.............................. X ........ .........
Ms. Lofgren.............................. X ........ .........
Ms. Jackson Lee.......................... ........ X .........
Mr. Hyde, Chairman....................... ........ X .........
------------------------------
Total.............................. 4 25 .........
------------------------------------------------------------------------
2. An amendment by Mr. Frank to the Hyde amendment in the
nature of substitute to strike the compensation provision for
the members of the Commission. The amendment was defeated by a
vote of 6 to 24. [See attached Rollcall No. 2]
rollcall no. 2
Subject: H.R. 497, National Gambling Impact and Policy
Commission Act--Frank Amendment to strike the compensation
provision for the commissioners. Defeated: 6 to 24.
------------------------------------------------------------------------
Ayes Nays Present
------------------------------------------------------------------------
Mr. Moorhead.............................. ........ X ........
Mr. Sensenbrenner......................... ........ X ........
Mr. McCollum.............................. ........ X ........
Mr. Gekas................................. ........ X ........
Mr. Coble................................. X ........ ........
Mr. Smith (TX)............................ ........ X ........
Mr. Schiff................................ ........ X ........
Mr. Gallegly.............................. ........ ........ ........
Mr. Canady................................ ........ X ........
Mr. Inglis................................ ........ X ........
Mr. Goodlatte............................. ........ X ........
Mr. Buyer................................. ........ X ........
Mr. Hoke.................................. ........ X ........
Mr. Bono.................................. ........ X ........
Mr. Heineman.............................. ........ X ........
Mr. Bryant (TN)........................... ........ X ........
Mr. Chabot................................ X ........ ........
Mr. Flanagan.............................. X ........ ........
Mr. Barr.................................. ........ X ........
Mr. Conyers............................... ........ X ........
Mrs. Schroeder............................ X ........ ........
Mr. Frank................................. X ........ ........
Mr. Schumer............................... ........ ........ ........
Mr. Berman................................ ........ ........ ........
Mr. Boucher............................... ........ X ........
Mr. Bryant (TX)........................... ........ X ........
Mr. Reed.................................. ........ X ........
Mr. Nadler................................ ........ X ........
Mr. Scott................................. ........ X ........
Mr. Watt.................................. ........ ........ ........
Mr. Becerra............................... ........ ........ ........
Mr. Serrano............................... ........ X ........
Ms. Lofgren............................... X ........ ........
Ms. Jackson Lee........................... ........ X ........
Mr. Hyde, Chairman........................ ........ X ........
-----------------------------
Total............................... 6 24 ........
------------------------------------------------------------------------
committee oversight findings
In compliance with clause 2(l)(3)(A) of rule XI of the
Rules of the House of Representatives, the Committee reports
that the findings and recommendations of the Committee, based
on oversight activities under clause 2(b)(1) of rule X of the
Rules of the House of Representatives, are incorporated in the
descriptive portions of this report.
committee on government reform and oversight findings
No findings or recommendations of the Committee on
Government Reform and Oversight were received as referred to in
clause 2(l)(3)(D) of rule XI of the House of Representatives.
new budget authority and tax expenditures
Clause 2(l)(3)(B) of House rule XI is inapplicable because
this legislation does not provide new budgetary authority or
increased tax expenditures.
congressional budget office cost estimate
In compliance with clause 2(l)(3)(C) of rule XI of the
Rules of the House of Representatives, the Committee sets
forth, with respect to the bill, H.R. 497, the following
estimate and comparison prepared by the director of the
Congressional Budget Office under section 403 of the
Congressional Budget Act of 1974:
U.S. Congress,
Congressional Budget Office,
Washington, DC, November 17, 1995.
Hon. Henry J. Hyde,
Chairman, Committee on the Judiciary,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 497, the National
Gambling Impact and Policy Commission Act.
Enacting H.R. 497 would not affect direct spending and
receipts. Therefore, pay-as-you-go procedures would not apply
to the bill.
If you wish further details on this estimate, we will be
pleased to provide them.
Sincerely,
Paul Van de Water
(For June E. O'Neill, Director).
Enclosure.
congressional budget office cost estimate
1. Bill number: H.R. 497.
2. Bill title: National Gambling Impact and Policy
Commission Act.
3. Bill status: As ordered reported by the House Committee
on the Judiciary on November 8, 1995.
4. Bill purpose: This bill would establish a commission to
study the impact of gambling in the United States. The study
would cover many issues related to gambling, including the
relationship between gambling and crime and the cost and
effectiveness of state and federal gambling regulatory policy
on Indian gambling. The commission, consisting of nine members,
would have two years after it first meets to conduct the study
and to present its findings to Congress. In addition, the
chairman of the commission would have the authority to appoint
an executive director and other personnel to assist the
commission in the performance of its duties. The commission
could hold hearings and subpoena witnesses.
5. Estimated cost to the Federal Government: Enacting H.R.
497 would increase discretionary spending by about $4 million
over the next three years, assuming appropriations of the
necessary funds.
----------------------------------------------------------------------------------------------------------------
1996 1997 1998 1999 2000
----------------------------------------------------------------------------------------------------------------
Spending subject to appropriations action:
Estimated authorization level........................ 2 2 ......... ......... .........
Estimated outlays.................................... 1 2 1 ......... .........
----------------------------------------------------------------------------------------------------------------
The costs of this bill fall within budget function 750.
6. Basis of estimate: For purposes of this estimate, CBO
assumes that H.R. 497 will be enacted by January 1, 1996, and
that the estimated authorization amounts will be appropriated
for each year. We estimated outlays based on the historical
rate of spending for similar commissions.
To estimate the cost of the commission, we assumed that the
commission would hire 20 support personnel and have other costs
similar to the first commission established to study gambling
in 1974--the Commission on the Review of the National Policy
Toward Gambling. CBO estimates that the proposed commission
would cost about $4 million over the next two years. This cost
would cover per diem expenses of the commission's members,
salaries of the commission staff, travel expenses and other
administrative costs.
7. Pay-as-you-go considerations: None.
8. Estimated cost to State and local governments: None.
9. Estimate comparison: None.
10. Previous CBO estimate: None.
11. Estimate prepared by: Susanne S. Mehlman.
12. Estimate approved by: Robert A. Sunshine, for Paul N.
Van de Water, Assistant Director for Budget Analysis.
INFLATIONARY IMPACT STATEMENT
Pursuant to clause 2(l)(4) of rule XI of the Rules of the
House of Representatives, the Committee estimates that H.R. 497
will have no significant inflationary impact on prices and
costs in the national economy.
SECTION-BY-SECTION ANALYSIS
Section 1.--Short title
Section 1 provides that the short title of the bill is the
``National Gambling Impact and Policy Commission Act.''
Section 2.--Establishment of Commission
Section 2 provides that the National Gambling Impact and
Policy Commission is established.
Section 3.--Membership
Section 3 provides that the Commission shall consist of
nine persons qualified by training and experience. Three of the
members are to be appointed by the Speaker of the House, three
by the Majority Leader of the Senate, and three by the
President. Before making their appointments, the three
appointing authorities are required to consult with one another
to assure that the overall membership reflects a fair and
equitable representation of various points of view. These
appointments are to be made not later than 60 days after the
date of enactment. Section 3 further provides that members
shall serve for the life of the Commission, but if a vacancy
occurs, it shall be filled in the same manner as the original
appointment. The Commission shall hold its first meeting within
30 days after the date on which all members are appointed.
Section 4.--Duties of the Commission
Section 4 provides that it shall be the duty of the
Commission to conduct a comprehensive legal and factual study
of gambling in the United States, including State-sponsored
lotteries, casino gambling, pari-mutuel betting, and sports
betting, and to propose any changes to the policies governing
gambling that the Commission may deem appropriate. It further
sets out the matters that the Commission should study
including: the positive and negative aspects of the economic
impact of gambling; the economic impact of gambling on other
businesses; the impact of political contributions on the
development of public policy regarding gambling; the
relationship between gambling and crime; the impact of problem
gambling; the demographics of gamblers; the effectiveness of
current laws and policies in combating and deterring illegal
gambling; the costs and effectiveness of State and Federal
gambling regulatory policy; the effects of advertising
concerning gambling; gambling that uses interactive technology;
the extent to which casino gambling provides economic
opportunity to residents of economically depressed regions and
to Indian tribes; the effect of revenues derived from State-
sponsored gambling on State budgets; and other relevant issues
as determined by the Chairman. Finally, section 4 requires that
the Commission must submit its report with recommendations not
later than two years after its first meeting.
Section 5.--Powers of the Commission
Section 5 provides that the Commission may hold hearings
and subpoena testimony and materials to carry out the purposes
of the Act. This section further provides that the Commission
may serve its subpoenas throughout the United States and that
it may go to a United States District Court to enforce them.
Section 5 also provides that the Commission may obtain
information from federal agencies to carry out the purposes of
the Act and that the Commission may use employees detailed from
federal agencies.
Section 6.--Commission personnel matters
Section 6 provides for the payment of compensation and
reimbursement of travel expenses to the members of the
Commission and its staff. It further provides that the
Commission may employ temporary and intermittent staff, if
needed.
Section 7.--Termination of the Commission
Section 7 provides that the Commission shall terminate 30
days after its report is filed.
agency views
U.S. Department of Justice,
Office of Legislative Affairs,
Washington, DC, November 7, 1995.
Hon. Henry J. Hyde,
Chairman, Committee on the Judiciary,
House of Representatives, Washington, DC.
Dear Mr. Chairman: As the Committee prepares to mark up
H.R. 497, I am writing to convey the views of the Department of
Justice on this bill, the National Gambling Impact and Policy
Commission Act.
One of the duties of the Commission to be established by
the bill is to conduct a comprehensive study, which will
include an assessment of the relationship between gambling and
crime. As President Clinton recently stated in a letter to
Congressman Wolf, we support the establishment of this
commission. However, we have a concern about the provision
relating to the manner in which information for the study may
be gathered.
Specifically, Section 5(b) of the bill states that the
``Commission may secure directly from any Federal department or
agency such information as the Commission considers necessary
to carry out the provisions of this Act. Upon request of the
Chairman of the Commission, the head of such department or
agency shall furnish such information to the Commission.''
(emphasis added). We believe that this provision is too broad.
This provision appears to empower the Commission to ask for and
receive information that an agency (and specifically the
Department of Justice) is not in a position to release. Several
examples of such information come immediately to mind: comments
on or information relating to any pending or planned
investigation; grand jury materials; Title III electronic
surveillance information; information falling within the
executive privilege; etc.
Accordingly, we believe that this provision of the proposed
bill should be drafted more narrowly to take into account the
legal obligations, rights, duties, and constraints under which
the various federal agencies operate. We understand that, in
response to our concern, your substitute includes an amendment
to the second sentence of Section 5(b) replacing the word
``shall'' with the word ``may''. We support this change.
Please do not hesitate to contact me if I may be of
assistance on this or any other matter.
Sincerely,
Andrew Fois,
Assistant Attorney General.
changes in existing law made by the bill, as reported
In compliance with clause 3 of rule XIII of the Rules of
the House of Representatives, the Committee reports that the
bill, as reported, makes no changes in existing law.
HON. BARNEY FRANK'S DISSENTING VIEWS
Those who believe with Emerson that a foolish consistency
is the hobgobbin of small minds will doubtless be reassured by
this legislation that the current Republican majority is, at
least in some respects, quite large minded. Few things could be
more inconsistent with the professed principles that the
majority has claimed as its guiding lights than this proposal.
We have here a bill which, if passed, will authorize the
spending of millions of dollars by the federal government to
investigate matters which are primarily within the jurisdiction
of the states, and which could lead, if any action is taken, to
a significant expansion of government restriction on choices
made by individuals about how to spend their own money. Thus,
the principles of reducing government expenditures to
essentials, respect for the states, and reducing the tendency
of the government to intervene in people's private economic
decisions are all contravened herein.
This legislation authorizes a two year investigation by a
Commission of 9 members into gambling, a subject mostly within
the jurisdiction of the states. It does not reference to the
subject of gambling by Indian tribes, but the resolution
encompasses far more than Indian gambling, and if it were in
fact restricted simply to an investigation of the federal role
regarding gambling conducted by Indians, it would not have come
before this committee, since jurisdiction over the Indian
Gaming Regulatory Act belongs in the Committee on Natural
Resources.
As to the cost, the 9 Commissioners authorized by this
legislation will be compensated according to the legislation at
a rate of $115,700 dollars per year, prorated according to the
number of meetings they have. The legislation calls for two
years of work, and does not in any way restrict the
Commissioners' ability to have meetings. Thus these individuals
will be free to decide how much money they should make from the
federal government up to a maximum of $231,400 dollars. Of
course the Commission will also be traveling, with members
entitled to full reimbursement. It will have a staff. It will
probably pay witnesses for travel, it will pay for transcripts,
etc. Obviously millions of dollars will be spent by the federal
government on this enterprise.
And it will be millions of dollars spent primarily to
investigate matters that are now wholly within the jurisdiction
of the states. State lotteries are one of the issues covered
here. Another set of issues deals with legalized gambling
through casinos, slot machines, etc., in the states. Part of
what the Commission will investigate has to do with Indian
gaming, but the larger part will be an investigation of whether
or not state and local governments have acted wisely in
allowing private citizens to gamble with their own money in
gambling establishments run by other private citizens. I am
surprised to find that my Republican colleagues think this is
an appropriate use of federal money at a time of emphasis on
balancing the budget.
In summary, not only does this authorize an expenditure of
scarce federal dollars on matters primarily within the
jurisdiction of the states, but the thrust of the legislation
clearly reflects a view that the states have chosen unwisely by
allowing their private citizens to spend too much of their own
funds on gambling. The notion that the federal government
should rebuke the states for allowing private citizens to
gamble with their own money in privately run gambling
enterprises seems to me to be the antithesis of a respect both
for the rights of states and for individual choices about how
they should spend their own money. For us to authorize the
expenditure of millions of dollars by a federal Commission
roving around the country questioning the judgment of states on
matters that are wholly within state jurisdiction is a mistake
in my judgment, and sufficiently at variance with what I had
understood to be the Republicans' professed principles as to
thoroughly acquit them of any charge they are overly committed
to consistency, foolish or otherwise.
Barney Frank.