Internet betting ban bill closer to a vote

Benjamin Grove

Wednesday, March 13, 2002 | 11:06 a.m.

WASHINGTON -- Legislation that bans Internet gambling -- with minor exceptions -- cleared an important hurdle Tuesday, but still faces a tough road to final passage.

Lawmakers on the House Judiciary subcommittee on crime passed the bill by voice vote, sending it back to full committee for further consideration. A full committee meeting has not been scheduled. The Senate has not voted on the legislation.

The bill, advocated by long-time cyber casino foe Rep. Bob Goodlatte, R-Va., is opposed by the American Gaming Association, the industry's top lobby group.

Rep. Jim Gibbons, R-Nev., also intended to formally withdraw his support for the bill today.

Much of the casino industry opposes Internet gambling, with some big exceptions like MGM MIRAGE and Station Casinos Inc., which are investing in the industry. The American Gaming Association and Gibbons pulled their support for Goodlatte's bill this week in part because the legislation appears to allow horse racing and other gambling forms to offer Internet gambling, which would be unfair to "brick and mortar" casinos.

Goodlatte's bill would technically allow a gaming company to launch an Internet gambling site, if the state of its operation could guarantee that no bettors outside the state would use it; and guarantee that minors would not use it. But those guarantees likely would make it difficult, perhaps impossible, for a state to allow a gaming company to operate its site.

Future technologies may make it easier for Internet gambling site operators to verify bettor information, Goodlatte said.

Internet gambling has been interpreted as illegal under the 1961 Wire Act, which banned bet making by telephone. But it is not clear that the act covers Internet gambling, Goodlatte said. And Internet gambling site operators are almost never prosecuted under the act.

Gibbons was an original co-sponsor of the legislation last year, when it called for a simple ban on Internet gambling.

But Goodlatte has tinkered with his legislation. The current bill appears to allow horse-racing operations to offer Internet wagers. It also would allow lotteries to offer Internet ticket buys if the state could guarantee buyers were in the state and not minors. The bill also would allow Indian tribes to offer Internet gambling if both the website operation and the bettor were on the reservation, Goodlatte aides said.

Goodlatte sidestepped a reporter's question about whether he needed the support of the influential gaming industry to muster full House support for the bill. He still hopes to win the backing of the industry and Nevada lawmakers.

"We're going to continue to work with all these groups," Goodlatte said after the committee meeting.

Goodlatte has sought to forge a compromise on legislation aimed at outlawing the fast-growing Internet gambling industry. About $1.6 billion was wagered online last year, subcommittee chairman Rep. Lamar Smith, R-Texas, said.

Goodlatte said Internet gambling is unregulated, offers no protections to prevent minors from gambling, offers a dangerous 24-hour outlet to gambling addicts nationwide, and provides organized crime a venue to launder money.

The bill in its current form seeks to outlaw Internet gambling sites from operating, but does not seek to punish bettors.

AGA President Frank Fahrenkopf said Goodlatte's bill was no longer the best legislation to address Internet gambling.

"We certainly have no problems with meeting with Congressman Goodlatte, but there are still some major problems with this bill," Fahrenkopf said.