Internet gambling ban criticized

Tuesday, July 28, 1998 | 8:27 a.m.

"It's going to happen," says Kerry Rogers, a Las Vegas Internet gambling pioneer. "The other countries are already doing it."

Rogers and other Internet gambling experts say such gambling generated $500 million to $600 million in revenues last year, and the concept can work if implemented carefully and correctly.

"It depends on how they go about it," says Anthony Cabot, a Las Vegas attorney who specializes in Internet gambling issues.

If the government carefully negotiates treaties with foreign countries on Internet gambling, and puts economic pressure on those who refuse to ban the practice, Internet gambling might become a minimal problem, he said.

If the United States tries to bully other countries, the ban will not work, Cabot said, adding, "What the United States has to do is realize that they cannot police the Web."

Those on both sides of the issue agree a final resolution is anything but near.

"We're in the fourth inning of a nine-inning game," says Sue Schneider, chairwoman of the Interactive Gaming Council.

The Senate last week passed a bill sponsored by Sen. Jon Kyl, R-Ariz., to prohibit Internet gambling. Though the bill passed by a wide margin - 90-10 - its eventual fate is far from clear.

The Kyl bill was attached to appropriations legislation that must be passed by the House by Sept. 30. But it's unclear whether the House will retain the Kyl amendment as part of the appropriations bill.

The bill would bar the use of the Internet for the transmission of wagers. It would impose fines up to $20,000 and a four-year prison sentence on people who run Internet gaming sites. It would fine gamblers the greater of a multiple of their winnings, wagers or $500. And it would require Internet service providers to block access to Internet sites where technically possible and economically feasible.

The Justice Department has already criticized the legislation as overbroad, noting in a recent letter on the issue that, "extending federal jurisdiction to cover mere bettors would be both unnecessary and unwise. ... Federal resources should be spend targeting large gambling operations and other more serious offenses."

The bill's main effect seems to require the U.S. secretary of state to begin negotiating treaties with foreign countries that would require citizens of those countries to respect U.S. Internet gambling laws.

Ban opponents hold that even if treaties are signed with most of the world's nations, there will always be one or two safe-haven countries where Internet gaming is allowed. And that means American gamblers will always have someplace to turn to place their bets.

"The whole enforceability issue continues to be a big question," Schneider said.

"You can't give somebody extraterritorial jurisdiction without having the extra territory agree to it," Rogers added.