Although the Bush administration generally supports efforts to cut off money transfers to and from illegal Internet gambling businesses, Deputy Assistant Attorney General John Malcolm said the Justice Department is concerned about criminal provisions in online wagering bans proposed by Sen. Jon Kyl, R-Ariz., and Rep. Jim Leach, R-Iowa.

Malcolm told the Senate Banking Committee the department is concerned the bills would not cover bets placed over the telephone. He also said both bills would carve out exemptions for Internet service providers and require law enforcement authorities to prove the illegality of Internet wagers.

Pressed for a commitment by Sen. Paul Sarbanes, D-Md., Malcolm acknowledged the department did not participate in crafting the Leach bill, which passed the House Financial Services Committee last week by voice vote.

"When is the Department of Justice going to get involved?" a clearly exasperated Sarbanes asked. "Why can't we get you to participate in a solution?"

The committee chairman, Sen. Richard Shelby, R-Ala., agreed with Sarbanes and said he hoped the Justice Department "gets to work sooner rather than later."

Sen. Christopher Dodd, D-Conn., complained the Justice Department is not cooperating with Congress on Internet gambling.

"We're moving rather rapidly here, and the fact that you weren't involved in the House draft is troublesome," Dodd said.

Malcolm apologized and acknowledged the Justice Department has been remiss in not being more responsive to Congress on Internet gambling. But his comments drew a response from the committee chairman.

"I can't imagine this Justice Department, under any circumstances, headed by our former colleague, (Attorney General) John Ashcroft would oppose this legislation," Shelby said.

In 1998, then-Sen. Ashcroft, R-Mo., said, "Gambling is a cancer on far too many families in the United States."

Kyl, who has been the Senate's leading supporter of an Internet gambling ban, told the committee his bill is "virtually identical" to the Leach bill, which would outlaw the use of credit cards, wire transfers or any other bank instruments to pay for online wagers.

Kyl noted the Internet gambling industry has grown from about two dozen Web sites in 1995 to about 2,000 sites generating revenues estimated to approach $5 billion this year.

Of the eight witnesses who testified at Tuesday's hearing, only Frank Catania, a former director of the New Jersey Division of Gaming Enforcement, urged the committee to oppose the prohibition of Internet gambling.

Even if the Kyl bill becomes law, Catania said, that will not stop Internet gambling in the United States.

A better approach, Catania said, would be a bill introduced last week by Rep. John Conyers, D-Mich., that would establish a federal commission to study the feasibility of allowing states to regulate Internet gambling.

"If we had a regulated system here, U.S. players would not be looking offshore," Catania said.

Malcolm disagreed, saying gamblers would still be attracted to offshore Web sites even if Internet gambling is regulated in the United States.

Frank Fahrenkopf, president of the American Gaming Association, said the casino industry has remained constant in opposing Internet gambling because, he said, the technology necessary to provide appropriate regulatory and law enforcement oversight does not now exist.

Bill Saum, director of agent, gambling and amateurism activities for the National Collegiate Athletic Association, said the Kyl bill is not the total answer to the problem of gambling on college sports, but "is part of the equation."

After the hearing, Saum said the Internet gambling ban and efforts to prohibit Nevada sports books from taking bets on college games are both important to the NCAA but he declined to state a preference.

In its latest misstep, the U.S. Justice Department has asked a Louisiana federal court to dismiss a lawsuit brought by casinocity.com that challenges the government's crackdown the past year on advertising by Internet casinos.

There is an ancient Chinese proverb about gambling and goes like this: "If you must play, decide upon three things at the start: The rules of the game, the stakes and the quitting time.”

A U.S. trade official, speaking on condition that she not be identified, confirmed that a WTO panel had issued a final report that was "largely unchanged" from its preliminary ruling against the U.S. ban one month ago.

Since they couldn't go after the offshore operations directly, prosecutors started threatening to go after companies that aid and abet those offshore bookies. That could mean anybody who accepts advertising from offshore betting parlors, including the search engines.

Last June, Deputy Assistant Attorney General John G. Malcolm sent a letter to media trade groups warning that their members could be breaking the law by accepting ads for gambling sites. Meanwhile, Raymond W. Gruender, the U.S. attorney for the Eastern District of Missouri, has convened a grand jury in St. Louis that is issuing subpoenas to companies that do business with the online gambling industry.

Michelle Carinci, in an interview with The Canadian Press, said the website is already being used to create a database of potential on-line gamblers.

This was as a result of regulatory changes made by the Canadian Pari-Mutuel Agency last year allowing Internet wagers on horse racing.

Allen Lichtenstein, general counsel for the American Civil Liberties Union of Nevada, called the subpoenas and notice letters an "intimidation tactic to go after the messenger," rather than prosecute the online gaming sites that the Department of Justice alleges are violating the law.