Senate Votes to Ban Internet Gambling
Dateline: 07/27/98
On Thursday July 23, 1998 , The Senate voted overwhelmingly 90 to 10 to try to shut down the billion dollar Internet gambling industry, calling it addictive, a corrupting influence on the young, and a source of crime growing out of control. The Bill by Sen. Jon Kyl, R-Ariz, was included as an amendment to a $33.2 billion spending bill covering the Commerce, Justice and State departments in fiscal 1999, starting Oct. 1. The Senate passed the overall spending bill on a 99-0 vote. In the House, neither the spending bill nor an Internet gambling ban measure has reached the floor, but it is expected to sweep through the House and be signed into law by President Clinton this year.
"Internet gambling is unregulated, accessible by minors, addictive, subject to abuse for fraudulent purposes like money laundering, evasive of state gambling laws -- and already illegal at the federal level in many cases," said Sen. Jon Kyl, R-Ariz., chief sponsor of the measure. Unchecked, Internet gambling revenues could reach $10 billion by 2000, Kyl warned.
As many as 140 gambling sites have sprung up on the Internet in recent years, and more than $600 million was wagered online last year on sports alone. A 10-fold increase in just one year, according to the Justice Department. Most of the sites are operated by businesses based overseas, which lobbied against Kyl's measure.
Although Kyl's provision does not detail enforcement procedures, he said he anticipates that federal law enforcement officials would carry out its requirements by identifying Web sites that provide illegal gambling and seeking court orders enjoining such activity and requiring Internet service providers to "pull the plug" on access to those sites. This would mean that the service providers would need to install filtering software to block customer access to cybergambling.
If it becomes law the gambling ban would be the most far reaching internet legislation since the Communications Decency Act of 1996. That Bill which barred indecent and “offensive” materials on the net, was ruled unconstitutional by the U.S. Supreme Court last year.
Under the provision, individual gamblers could be imprisoned for three months and fined $500. Businesses running gambling sites could be imprisoned for four years and fined $20,000 or three times the amount of bets accepted.
Supporters of the bill argue that the ban is necessary because of the difficulty of trying to regulate “Virtual Casinos”. The easy access and anonymity for bettors makes it possible for youngsters who get their hands on a parent's credit cards to run up debt, they claim.
Representatives of states that have refused to legalise games of chance expressed concern that residents cannot be prevented from signing in and placing wagers on sporting events or the turn of a card in virtual casinos operated from locations thousands of miles away. A recent State Department report also criticised foreign Internet gambling operations in places like Antigua for providing a haven for money launderers.
Sue Schneider, a spokeswoman for the Internet gambling industry, assailed the Senate for placing "a blockade around the U.S." while other countries, such as Australia, permit cyberspace gambling. She also noted with disdain that Senators chose to carve out exceptions for lotteries and parimutuel betting. "It's really not prohibition; it has exceptions," said Schneider, who chairs the Interactive Gaming Council.
The Bill contains exceptions that would allow states to conduct lotteries over the Internet. In addition, off-track betting on horse and dog races would be permitted as long as wagers are placed on subscriber-based computer systems that are not accessible to the general public.
Also permitted under the measure are the popular sports "fantasy" or "rotisserie" leagues, in which fans create their own roster of professional athletes and bet on how well their teams will do. However, the fees that Internet sites charge for using these sites could not be used to pay off bets.
Others opposed to the Bill include the ISP Consortium, a Minneapolis-based organisation that represents 300 internet service providers worldwide. “We adamantly oppose the idea of turning ISPs into Traffic cops” said Justin Newton, public policy director of the group. “It is technologically impossible to track all the content that travels over the online services.”
Next week I will share with you some of my thoughts about online casinos.