Might this be a reason for the stock price of late?
Net gambling ban
heads for Senate floor
Committee approves Kyl bill on eve
of panel's report on gambling's impact
By Mike Brunker
MSNBC
June 17 — Adding to the likelihood that Congress will pass legislation banning Internet gambling by year's end, the Senate Judiciary Committee on Thursday approved a bill by Sen. Jon Kyl that would prohibit most forms of online wagering. The 16-1 vote came on the eve of a special blue-ribbon panel's report on the impact of increasing gambling in the United States, which includes a call for laws to prevent online casinos and sportsbooks from catering to Americans.
Wagering on Web is risky business
Online betting on horses hits home
States strive to regulate betting
Risky bottom line for cyber casinos
U.S. companies eye Web casinos in Australia
Find Books
Bargain Books
Bestsellers
Recommended
Books in the News
Under the bill, operators of online casinos and sportsbooks would face up to four years in prison and fines of up to $20,000 or the amount wagered, whichever is greater.
THE LONE COMMITTEE member opposing the so-called Kyl bill was Sen. Russ Feingold, D-Wis.
No companion bill has been introduced in the House, although several Republicans have said they plan to do so soon.
The House bill apparently was held up in deference to the report by the National Gambling Impact Study Commission, which has been examining the effects of the rapid growth of gambling in the United States for nearly two years.
Losing bettors sue credit card companies
The commission, which will present its final report to Congress and President Bill Clinton on Friday, was deeply divided on many issues. But the diverse panelists buried their differences on the issue of Internet gambling, which they agreed should be banned.
Opponents of Internet gambling argue that the offshore sites cannot be regulated and are dangerously seductive to children and compulsive gamblers.
INDUSTRY SAYS REGULATION POSSIBLE
The Interactive Gaming Council, a group that represents the burgeoning online gambling industry, argues that Internet gambling would, in fact, be easier to regulate than brick-and-mortar casinos, since software records each transaction.
They also have argued that security measures could effectively exclude underage and problem gamblers.
In addition to challenging the assertions of proponents of a ban on Internet gambling, regulation of the industry also could generate significant taxes, the council argues. Internet gambling is estimated to be a $600 million-a-year industry skyrocketing to as much as $3 billion by the year 2002, according to industry analysts.
Kyl's bill was approved 90-10 by the Senate last year, but Congress adjourned before the House could vote on its version of the legislation.
When Kyl, R-Ariz., reintroduced his bill this year, he eliminated a controversial provision that would have for the first time subjected bettors to criminal penalties.
BETTOR PROVISION DROPPED
The so-called casual bettor provision was dropped from the Internet Gambling Prohibition Act, “to address concerns raised by the Department of Justice,” Kyl said during a March hearing. “Such betting will, of course, still be the subject of state law.”
If such a provision had not been dropped, anyone entering an office pool by e-mail to pick the winner of a sports event could have faced federal prosecution.
Supporters of Kyl's bill said the removal of the casual gambler provision does not significantly weaken it.
Bernie Horn, of the National Coalition Against Legalized Gambling, described the penalty as “an unnecessary irritant.”
“The penalty against individual bettors was not something that anyone was going to enforce,” he said. “It was just there on the theory that most people obey the law.”
In a written analysis of the bill last year, the Justice Department said the casual bettor provision would penalize conduct that would not be illegal if done via the telephone.
‘UNNECESSARY AND UNWISE'
It called the bill's language “unnecessary and unwise” and said that even if the Kyl bill became law, enforcement “is not likely to be a priority.”
The provision would have subjected Internet gamblers with up to three months in prison and fines of $500. Instead, the bill now concentrates its prosecutorial firepower on operators of online casinos and sports books, who would face up to four years in prison and fines of up to $20,000 or the amount wagered, whichever is greater.
The bill, which would extend the federal ban on interstate gambling on sports by telephone or wire to most other forms of gambling, including technologies that use no wires. It contains exemptions for state lotteries, horse racing and sports fantasy leagues.
Despite the stiff penalties, Kyl said during the March hearing that the primary enforcement action in the bill would be simply “pulling the plug” on any site that a court determines is soliciting illegal bets.
Some of the bill's original language was altered to provide protection for internet service providers and telephone companies, Kyl said.
PROTECTION FOR SERVICE PROVIDERS
If the removal of gambling sites “can't be done technically or it's not economically not doable then (ISPs and phone companies) would be excused from that liability,” Kyl said. “While it might not be perfect and it might not end up putting anybody in jail, at least it would, in most cases, prohibit the transmission of this illegal activity into the United States.”
The addition of an exemption for fantasy sports leagues on the Internet was enough to garner the support the Major League Baseball Players Association, which had previously opposed the bill.
But the issue is still a dicey area for some. “There is some disagreement among attorneys general about whether fantasy sports leagues are illegal,” Wisconsin Attorney General James Doyle testified at a March hearing on the bill. That exemption in Kyl's bill “may run afoul of some state laws, but that is for the states to decide,” he said.
The removal of the penalty for bettors does not entirely answer questions about enforcement of the bill should it become law.
“An attempt to ban Internet gambling is really doomed to futility,” said Tom W. Bell, a professor at Chapman School of Law who analyzed the issue for the Cato Institute. “That's one reason we're going to see legality because you just can't stop it effectively. Gambling is very popular in the U.S., and there's every reason to believe its popularity will carry over onto the Internet.”
ENFORCEMENT QUESTIONS
The Department of Justice also indicated that authorities will be unable to shut down Web gambling sites that operate from foreign countries.
The fact that “some form of gambling is legal in virtually every state ... diminishes our ability to persuade a foreign country that gambling must be vigorously combated,” the department wrote in last year's analysis.
But Bill Saum, the NCAA's director of agent and gambling activities, said in March that even though operators of online casinos and sports books could stay out of the reach of authorities, the bill is important.
“If nothing else, it is sending the message that this is illegal,” he said. “Our college students, when they turn on their computers, see this and think it must be legal.”
MSNBC's Brock Meeks and The Associated Press contributed to this report.
|
