WILL KYL FOLLOW GOODLATTE FORMULA ON INTERNET GAMBLING CARVE OUTS?

1 September 2006

It's a gamble - trying to reduce opposition to an online gambling ban by sliding around the exemptions issue

Whilst there are doubts that U.S. legislators will have enough time and support in the current Congressional season to get the latest attempt to prohibit online gambling approved, the Las Vegas Gaming Wire made some cautionary points on the issue this week.

In an article which took an objective look at the previously abortive US banning attempts (there have been six of these in the past decade) the Wire reports that prospects appear bleak that the Senate will pass a prohibition bill when it returns after Labour Day for the final weeks of the 109th session of Congress.

Frank Fahrenkopf, president of the American Gaming Association which has expressed support for a Congressional study of online gaming, seems to agree when he is quoted as saying: "When the Senate comes back, there is going to be an awful lot on their plate, and I'm just not sure what kind of priority is going to be given to this gaming legislation."

The Wire goes on to quote an anonymous source who says that despite the busy session Sen. Jon Kyl is to launch a further attempt at a ban, trying to remove language from the House bill that would amend the 1961 Wire Act so that it would outlaw using the Internet to place bets across state lines.

By doing this, Kyl hopes to avoid contentious debate on carve-outs for industries like horse racing and address concerns of the horse racing industry, thus removing holds on the bill in the Senate. If Senate Majority Leader Bill Frist calls for a vote on Kyl's streamlined version within the first two weeks after Labour Day, advocates of the ban are confident the House would quickly follow with its approval.

Then the modified bill, which would ban the use of credit cards and other bank instruments for Internet gambling payments, could be sent to the president's desk.

Kyl has apparently declined to comment on these reports and an e-mail to his office was not returned.

Frist spokeswoman Carolyn Weyforth said Frist would like the Senate to vote in September on the bill approved by the House. "Given the overwhelming House vote, we expect Senator (Harry) Reid to cooperate in this effort to prevent underage and illegal gambling," Weyforth said.

Reid, the Democratic leader and a former chairman of the Nevada Gaming Commission, has said he opposes Internet gambling because he does not think it can be effectively regulated. But it's not clear if he would support the House bill.

His office issued a rather oblique reply, saying: "Senator Reid would not object to a congressional study on online gaming," according to spokesman Jon Summers. This would seem to indicate support for Rep Jon Porter's popular attempt to carry out a Congressional study of the subject before passing legislation.

Joseph Kelly, a business law professor at State University of New York College in Buffalo who has written regulations for online gambling sites in Antigua, said Congress may be more receptive to an Internet gambling study than a ban.

"A study might make a lot more sense," Kelly said. "More and more, the (land) casino industry is supporting regulation as opposed to prohibition of Internet gambling, which has become impossible."

The Wire points out that the House and Senate never have managed to pass an Internet gambling ban during the same two-year session of Congress. Meanwhile, the Internet gambling industry continues its exponential growth. It has gone from 30 offshore Web sites taking in $30 million in bets in 1996 to a $12 billion industry with more than 2 300 Web sites this year.

Online Casino News courtesy of InfoPowa

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