WASHINGTON -- Gambling foes and industry pros recently defended their pick between two proposed rules for online gambling now being considered by Congress.
One bill would ban online gambling outright, while the other seeks to regulate the estimated $4 billion global business. The House Subcommittee on Crime, Terrorism, and Homeland Security heard comments on both Tuesday.
Congress has considered many bills to completely ban e-betting, and the latest proposal has 34 cosponsors. The other measure is the first to recognize the gambling industry's staying power and try to regulate rather than fold it.
Protection Urged
Iowa Rep. Jim Leach, a Republican, proposed the Unlawful Internet Gambling Funding Prohibition Act (H.R. 21) in January. Its supporters hope to prevent U.S. citizens from participating in a practice they consider a scourge that nurtures addiction and fosters organized crime.
"Internet gambling increases consumer debt, makes bankruptcy more likely, money laundering an easy endeavor, and identity theft a likely burden," Leach said. "The home may be considered a castle, but it should never be a casino."
The proposed bill would penalize credit card companies that let customers charge online wagers. Some subcommittee members questioned whether the ban is redundant because the Wire Act, which made betting by phone illegal in 1961, might already cover it.
The Justice Department supports Leach's bill. The estimated 1800 casino Web sites accept bets from U.S. citizens in violation of federal law, says John Malcolm, a deputy assistant attorney general.
Software to prevent electronic gambling in this country is "far from perfect and easily manipulable," Malcolm said. Even requiring ID numbers for registered authorized adults cannot stop a minor from logging on to a gambling Web site, he noted.
The subcommittee will retain the bill for a possible vote until mid-May.
Sharing the Pie
Supporters of regulating--not banning--Net gambling say some people may hate the game, but they can't stop the players.
"Americans are playing online," said William Hornbuckle, president and chief operating officer of MGM Mirage Online. "They're simply doing it offshore."
The Internet Gambling Licensing and Regulation Commission Act (H.R. 1223) would create a federal commission to establish industry standards. Unlike the popular e-betting ban, it has only three cosponsors, but it was introduced two months later, in March.
Controls would help entertainment companies use technology to ensure only authorized adults can play, said Jeffrey Modisett, a lawyer and former Indiana state attorney general.
"Because all Internet gaming transactions are recorded, it is actually easier to track problem gamblers in the cyberworld than in a brick-and-mortar casino," Modisett said.
Under regulated Internet gambling, revenues could flow stateside rather than overseas, where Caribbean accounts are flush with electronic gaming proceeds, Modisett said.
A highly regulated online gambling industry would be "clean" and financially benefit the nation, according to Modisett and Hornbuckle. Driving the industry underground will benefit the black market, Hornbuckle said.
People will use e-cash accounts and electronic transfers to offshore banks if they can't use credit cards for gaming, Modisett said.
Other Efforts
The online gambling operations of a company like MGM are overseas and effectively block Americans from participating, Hornbuckle said. Yet many less scrupulous outfits are in on the game, said Malcolm.
Most major credit card companies now voluntarily block online bets made from computers within U.S. borders. Online bill-payment service PayPal is under investigation for allowing payments to gambling sites.
A bill (S. 627) that would outlaw using credit cards and wire transfers for Web betting is now in the Committee on Banking, Housing, and Urban Affairs.
Online gambling is drawing interest, according to a survey by the Interactive Gaming Council. The organization says 55 percent of 1000 people surveyed said they would not favor prohibition.
"Prohibition may have to fail spectacularly before people accept regulations," said Dan Walsh, a government affairs manager for the Interactive Gaming Council.
Earlier proposals would have forced Internet service providers to block illegal gaming Web sites. Walsh said that would force ISPs out of business and slow Internet traffic.
Elsa Wenzel, Medill News Service
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