Revised proposal targets Internet gaming

Laurence Arnold

Friday, Nov. 30, 2001 | 10:34 a.m.

WASHINGTON -- Critics of Internet gambling are hoping that a new bill will succeed where past efforts to ban the activity have failed.

Rep. Bob Goodlatte, R-Va., on Thursday told the House Judiciary subcommittee on crime that his revised bill resolves disputes that tripped up previous legislation aimed at slowing the growth of online casinos.

The bill affirms the sovereignty of state lotteries -- some of which could someday choose to sell tickets online -- and addresses concerns by the Bush administration that activities in the real world and in cyberspace should be treated the same.

The bill also makes clear it seeks no changes to laws guiding American Indian casinos and the horse racing industry.

Lawmakers have been trying to ban Internet gambling since 1996. The task gets more difficult each year as the industry grows and major companies -- and even states -- take steps to get in on the action.

Christiansen Capital Advisors, which studies the gambling industry, estimates that gamblers worldwide wagered $2.2 billion over the Internet in 2000. It projects that figure will exceed $6 billion in 2003.

Nevada is working on regulations that would let it become the first state to allow Internet gambling. Lawmakers in New Jersey have proposed letting gamblers wager via the Internet on "real time" games being played at Atlantic City casino tables.

The House Financial Services Committee last month approved a bill by Rep. Jim Leach, R-Iowa, that would prohibit anybody engaged in "unlawful Internet gambling" from accepting payment by credit card, check or electronic transfer.

Goodlatte's bill grants law enforcement broad authority to seek injunctions against any intermediaries, including banks, that enable gambling over the Internet.

But Rep. Bobby Scott, D-Va., said both bills are flawed because they seek to punish Internet gambling operators, most of whom operate outside the United States, rather than Americans who gamble over the Internet.

That point was underscored by Assistant Attorney General Michael Chertoff in written testimony to the subcommittee.

While praising both bills as "useful," Chertoff noted that while the government could issue indictments for operators of offshore gambling operations, it might not be able to bring them to trial.

The online gambling industry itself continues to urge the U.S. government to regulate and tax their games rather than try to outlaw a global activity.

"Unlike prohibition, strict regulation will work," said Frank Catania, a former director of the New Jersey Division of Gaming Enforcement who now represents the Interactive Gaming Council.

The Senate passed Internet gambling bans in 1998 and 1999. In the House last year, an earlier version of Goodlatte's bill earned 245 votes, less than the two-thirds majority needed for passage under the rules governing the vote.