Senate panel votes to ban Net gambling

Friday, June 18, 1999 | 6:07 a.m.

The bill updates a 38-year-old statute that prohibits wagering by the use of telephone and other forms of wire communications.

Sen. Jon Kyl, R-Ariz., the bill's sponsor, noted that online gambling revenue has doubled in just one year.

Sen. Richard Bryan, D-Nev., is a co-sponsor of the bill.

The take from online gambling is projected to reach $10 billion dollars by 2001, he said.

The bill carries exemptions for the horse racing and dog racing industries, which use electronic systems. It also allows for state lotteries and "fantasy sports" leagues run on the Internet.

Kyl urged fellow senators to stop Internet gambling before it gets too big.

Nevada gambling lobbyists said the legislation protects casinos that participate in pari-mutuel betting networks, as well as the Megabucks network of shared payoff slot machines.

It also would not ban casinos from advertising on the Net or offering "play only" games on their Web sites.

But otherwise, it would become a crime to operate virtual casinos and sports books. Businesses that do could be fined at least $20,000 and their principals sent to prison for four years.

Individual gamblers would not be targeted for prosecution, a change Kyl made in his bill at the urging of the Justice Department.

Bryan characterized the online betting ban as a consumer protection. It is impossible to determine whether Internet games are rigged, he said.

Internet industry officials estimate there are some 400 to 600 online casinos.