Monday, April 6, 1998 | 10:29 a.m.
Casino operators and gambling opponents, normally at loggerheads, both support a federal crackdown on computer-linked gambling.
But interest groups representing the horse-racing industry, Indian tribes, computer businesses and even fantasy baseball leagues have stepped forward with objections, clouding the legislation's future and underscoring the wide reach of both legalized gambling and the Internet.
The horse-racing industry has raised concerns about whether the ban would affect off-track betting. Indian reservations that offer online betting are raising tribal sovereignty issues. Fantasy sports leagues are fretting that the ban could curtail their contests.
Software makers and non-casino gambling businesses formed the Committee for Freedom of the Internet and hired a major Washington lobbying firm, Preston Gates Ellis & Rouvelas Meeds. The offshore Internet companies targeted by the legislation have hired their own lobbyists to push for regulation rather than a ban.
At the very least, the objections have slowed progress of legislation that once appeared headed for clear sailing on Capitol Hill.
"On its face, it looks like good-government, election-year legislation," said Bill Jarrell, a lobbyist at Preston Gates. "But in fact it has a lot of problems and people are starting to poke holes."
Sponsors insist the legislation remains on track.
Sen. Jon Kyl, R-Ariz., the chief Senate sponsor, hopes to bring the measure to a floor vote in several weeks, said his spokesman, Vince Sollitto.
Opponents say their arguments are making headway in the House, where Reps. Bob Goodlatte, R-Va., and Frank LoBiondo, R-N.J., are leading the push for the ban.
LoBiondo, whose district includes Atlantic City, said the mounting calls to change the legislation are not a sign of weakness. "The fact that a large number of groups are coming through is a good part of our process," he said.
LoBiondo and other sponsors say the legislation simply updates the decades-old prohibition against interstate gambling. Last month, federal prosecutors twice used the 1961 wire act to charge offshore companies with illegally taking bets on professional and college sports.
Kyl's office says the legislation will make sure that the 1961 law covers "virtual" games such as on-line roulette and use of new technology like satellite communication.
"Our objective is to delay the Kyl bill," said Larry Weltman, executive vice president of Gaming Lottery Corp., which is launching an Internet casino site, "GalaxiWorld," that will not be open to U.S. players initially.
Weltman believes the federal government will eventually give up trying to ban Internet gambling and regulate it instead. By then, he said, "we will have positioned ourselves as a very attractive takeover target" for a casino company.
For now, the casino industry supports a ban on cyber-gambling. Frank Fahrenkopf, president of the American Gaming Association, said casinos might want to enter the market, but not until a regulatory system is in place.
Operators of offshore "virtual casinos" say casino companies favor a ban to stifle competition, a charge Fahrenkopf rejects. But critics of the proposed ban are making inroads on Capitol Hill with other complaints.
Some are troubled that under the proposed law, Americans sitting at their home computers could break the law by placing bets at a "virtual casino."
Nearly all the estimated 130 active cyber-gambling sites are based outside the United States in places like the Caribbean and Central America, where they operate legally.
Also affected under the bill would be Internet service providers, which could be ordered by law enforcement officials to block customer access to gambling sites. Skeptics say that sounds easy but is a thorny task.
Sponsors are drafting changes to the bill to exempt state lotteries, parimutuel betting on horse races and casinos that allow betting from their hotel rooms. Some tribes operating under the Indian Gaming Regulatory Act want an additional exemption and are pressing their case through Sen. Larry Craig, R-Idaho.
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