Future of Internet gambling bill murky

Laurence Arnold

Thursday, July 13, 2000 | 4:03 a.m.

WASHINGTON - Two key Republican lawmakers say a House bill to outlaw online casinos will not inadvertently expand other gambling on the Internet, but their assurances may not be enough to gain passage.

Skeptics maintain the legislation would help some gambling interests reach bettors through home computers, particularly horse racing. Those critics, plus others who say the bill would unfairly restrict state lotteries and unwisely regulate the Internet, could scuttle a movement that appeared to be gaining momentum when the Senate approved an Internet gambling bill last year.

The House bill is designed to stop the growth of Web sites that allow people to wager money on casino games through their home computer, regardless of whether casinos are legal in their state. A vote could come early next week.

Lobbyists for pari-mutuel betting - wagers placed on horse racing, dog racing and jai alai - argued successfully for an exemption to permit existing interstate activities like simulcasting. The Justice Department opposed the exemptions.

"Simply stated, the department does not understand why the pari-mutuel wagering industry should be allowed to accept bets from people in their homes, when other forms of gambling have rightly been prohibited from doing so," Deputy Assistant Attorney General Kevin DiGregory told a House committee.

Rep. Chris Cannon, R-Utah, called the bill "a well-meaning attempt to regulate a pernicious vice (that) will actually allow gambling into America's homes."

Attempting to stem the criticism, two Republican congressmen this week agreed on additional language to specify the bill is not intended to permit activities that now are illegal.

Reps. Bob Goodlatte of Virginia, sponsor of the legislation, and Billy Tauzin of Louisiana, chairman of the House Commerce subcommittee on telecommunications, hope their agreement clears the way for passage.

"This compromise is a huge step toward preventing runaway gambling on the Internet," said Tauzin, who got involved after a Commerce Committee hearing in June exposed concerns about the bill.

Tauzin's spokesman, Ken Johnson, said the compromise seeks to avoid the controversy over the use of the Internet for betting on horse races. "There are growing indications that this dispute may end up in court," he said, "and we're not going to pick the winners and losers."

The River City Group, a consulting group for the online gambling industry, said in a recent report that gambling is offered by nearly 700 Internet sites. The report projected Internet gambling will grow from $1.1 billion in 1999 to $3 billion in 2002.

Most agree Internet gambling as commonly practiced is already illegal under the 1961 Wire Communications Act, which was written to cover sports betting over the telephone. They say the new bill is necessary to leave no doubt that Internet gambling remains illegal even when computers communicate by something other than phone lines.

The bill prohibits anyone who runs a gambling business to place or receive a wager online. Enforcement would be challenging, however, because most Internet gambling outlets are located outside the United States.

Some critics are loath to see any government regulation of the Internet, while others are unhappy that an exemption allowing sales of state lottery tickets over the Internet was removed by the House Judiciary Committee.

"Today no states have lotteries online, and this bill takes that option away in the future," Florida Gov. Jeb Bush wrote in a letter to his state's lawmakers. "While I am no fan of gambling, I see this bill as a violation of states' rights."

The bills are S. 692 and H.R. 3125.