Legislation to outlaw online gambling suffers setback

Benjamin Grove

Friday, Sept. 16, 2005 | 11:21 a.m.

WASHINGTON -- A senator who has long led a charge to outlaw Internet gambling has suffered another defeat -- for now.

Gambling Web sites have flourished in the last decade as Sen. Jon Kyl, R-Ariz., has sought to ban it, exploding from roughly 20 sites 10 years ago to more than 2,000 today, he said.

"The amount of money was relatively insignificant back then," Kyl said on the Senate floor as he sought to attach an anti-Internet gambling amendment to a Justice Department spending bill. "Now it is hundreds of billions of dollars. It is incredible."

Kyl's legislation aimed to curb Internet gambling by requiring banks and credit card companies to refuse payments to online gambling sites.

Kyl explained: "When some Internet gambling sites in Aruba, for example, submits the bill to Master Charge or Bank of America and says, Joe Blow here gambled away $1,000 of his money, put it on the credit card, and you now owe that to our Internet gambling site in Aruba, the bank or credit card company says, 'No. That was against the law. We are not paying.' "

But Kyl met a road block on Thursday when Sen. Barbara Mikulski, D-Md., noted on behalf of a colleague that the nature of his legislation was not in order on the appropriations bill.

An unnamed senator objected to Kyl using the spending bill as a vehicle, Mikulski said. Kyl sought to learn who the senator was so that he could work out a compromise with the objecting lawmaker. But Mikulski said she did not know.

Kyl vowed to continue his effort.

"There should be no reason we cannot move forward," Kyl said. "We will be back."

Kyl spokesman Scott Montrey said he could not confirm if Kyl intended to pursue the bill further this year. The Senate has a full agenda that includes finishing spending bills, responding to Hurricane Katrina and filling two Supreme Court vacancies.

Internet gambling is technically illegal in the United States, according to the Justice Department, but bettors are not prosecuted. Most websites are based off-shore beyond U.S. control. State attorneys general cannot enforce state laws, either, because the Internet is without state borders, Kyl said.

Critics lament that there is no way to regulate or tax the booming Internet gambling industry, which netted an estimated $4 billion last year. Kyl said the proliferation of sports betting also threatens the integrity of athletic events.

Kyl also argues that Internet gambling is especially dangerous for children. He quoted a Harvard University professor who said Internet gambling is the "crack cocaine of gambling."

"It is so addictive," Kyl said. "There is no supervision."

The American Gaming Association, the nation's top trade group representing traditional casinos, has long been wary of Internet gambling, primarily because the AGA strongly advocates that states be allowed to regulate all gambing within their borders.