*AV*---Remember the discussion on SBET vs USAG for online gaming and our belief that it was a matter fo time before they cracked down? Well, it took longer than I expected but:
Net gambling dealt a blow
By Courtney Macavinta
Staff Writer, CNET News.com
May 12, 1999, 5:00 p.m. PT
A proposal to put cybercasinos out of business
cleared a hurdle in the Senate today.
Sen. Jon Kyl's (R-Arizona) Internet Gambling
Prohibition Act was unanimously passed by the
Technology, Terrorism, and Government
Information subcommittee. The next step is a full
Senate Judiciary Committee vote.
Kyl's bill would include the Internet under the
existing law prohibiting the use of any wire
communication for accepting interstate or foreign
wagers, which the Justice Department estimates
was a $600 million industry in 1997. Cybercasino
operators would face fines up to $20,000 and four
years in prison for violating the act, and Net casinos
based on Indian reservations would be prohibited.
The bill also includes a controversial provision that
could put Net service providers on the hook for
illegal sites on their networks.
The prohibition on Net gambling would not apply
to "closed-loop," subscription-based gambling
services, fantasy sports leagues, overseas sites,
state lotteries, powerball, horse racing, or online
sports pools--as long as the activity is legal in the
states where the online bettor is participating.
"[ISPs] shall not be liable under any federal or state
law if, in a reasonably expeditious manner, the
provider removes or disables access to the
material," the bill states.
In other words, if the law passed and an ISP came
across an illegal gaming site, it would have to
remove the site or face legal sanctions. Similar
provisions in other laws have been criticized by
ISPs, which worry they will be forced to police
their networks.
Still, proponents of the bill--many of whom sit on
the subcommittee that cleared it today--say
legislation is necessary to protect consumers.
"There are no effective means to stop children from
gambling on the Internet," Sen. Richard Bryan
(R-Nevada), who cosponsored the bill, said in a
statement. "[This legislation] will prevent
unscrupulous Internet sites from ripping off potential
gamblers."
However, the legislation would not hinder casinos
in Bryan's home state from luring new customers to
their brick-and-mortar establishments.
"The bill would not ban hotel-casinos from
advertising or offering popular 'how-to' or
'play-only' options on their Web sites," he noted.
Last year the Senate voted 90-10 to add a ban
against online gambling onto a spending bill, but the
ban didn't clear the full Congress.
Online gaming trade groups have long held that the
United States would be better off regulating the
industry than banning it, because many sites are
based overseas and outside regulators' reach.
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