3 states may legalize online gambling

http://www.usatoday.com/money/industries/technology/2005-03-15-cyber-gaming-usat_x.htm?csp=34

3 states may legalize online gambling

By Jon Swartz, USA TODAY

SAN FRANCISCO — Undeterred by murky federal law and emboldened by a trade ruling, at least three states are edging toward legalizing online gambling, and Great Britain is on the verge of permitting its land-based casinos to take bets online from U.S. citizens.

Those are the latest assault on the federal Wire Act of 1961, which bans use of telephones to place sports bets. U.S. lawmakers have struggled for a decade to update the law, hoping to restrain the fast-growing, $10 billion-a-year Internet gambling industry.

Legal experts say that the act is narrow and hard to enforce and that it does not specifically ban casino games. The vague law has prompted online gaming overtures from:

• States Lawmakers say they are confident proposed legislation will not violate federal law, and they are willing to defend themselves in court.

“No one wants tax increases. This is a legitimate revenue maker,” says North Dakota state Rep. Jim Kasper, R-Fargo. He introduced legislation that would allow Internet poker sites to operate inside the state. It has passed the House.

Kasper says legalized Internet poker could bring in millions through taxes and fees. North Dakota’s constitution would have to be amended, he says. The state attorney general’s office, which would regulate sites, last week received a letter from the Justice Department reiterating the federal ban on all Internet gambling.

North Dakota Attorney General Wayne Stenehjem has forwarded the letter to the state Senate Judiciary Committee, which is reviewing the bills.

Illinois’ legislature is considering a bill to allow the sale of lottery tickets online to state residents 18 and older. The bill, scheduled for a Senate vote next month, could generate millions, says state Sen. John Cullerton, D-Chicago.

Georgia state Rep. Terry Barnard, R-Glennville, has proposed a similar bill. It passed the House last week.

• British Parliament. Lawmakers this year are expected to allow 137 land-based casinos in the U.K. to take online wagers from U.S. citizens. A move by such a key trading partner could undercut efforts by U.S. officials to snuff Internet gambling, says Joseph Kelly, a Buffalo State College professor who researches online gambling.

All this comes against the backdrop of a closely watched World Trade Organization gaming decision. The U.S. is appealing a WTO ruling that it violates international trade rules by allowing credit cards to be used for domestic gambling but not online bets. Much is at stake: Poker’s popularity has made online gambling huge. More than $200 million is bet on online poker daily, up from $16 million two years ago, says researcher PokerPulse.com.

Sen. Jon Kyl, R-Ariz., and Rep. Spencer Bachus, R-Ala., advocate anti-online-gaming bills.