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House to Vote on Bill to Curb Online Gaming

Although Internet wagering is illegal in the U.S., the effort faces an uphill battle as millions try their hand at the $12-billion business.

July 11, 2006|Jim Puzzanghera | Times Staff Writer

WASHINGTON — After nearly a decade of trying, Congress appears ready to deal with Internet gambling, a phenomenon that has grown dramatically in recent years as millions of people from college students to retirees log on to play poker or wager on sporting events.

The House is set to vote today on a measure -- part of the Republican leadership's election-year "values" agenda -- designed to choke off the flow of U.S. money to poker and other gambling sites, most of which are based overseas, because Internet gambling is illegal in the United States.

But emblematic of Congress' attempts to deal with other problems caused by the Internet and new technologies, the efforts to block online gambling face an uphill battle.

Revenue at Internet gambling sites has quadrupled since 2000 to $12 billion a year worldwide, said Rep. Robert W. Goodlatte (R-Va.), one of the bill's main sponsors. Of that annual total, between $4 billion and $6 billion comes from the U.S.

"There are hundreds and hundreds of these illegal, unregulated, untaxed offshore sites that are sucking billions of dollars out of the country," he said. "This is really the worst form of gambling that you can have -- all the ills that come from gambling without any of the regulations."

The American Gaming Assn., a trade group representing the casino industry, has estimated that there are 2,500 Internet gambling sites.

The legislation would make it illegal for banks and credit card companies to make payments to these sites. It also allows law enforcement officials to force Internet service providers to remove links to the websites.

Many major credit card companies already refuse to process such payments. Opponents of the bill, including online gambling sites and a new group representing U.S. poker players, noted the growing popularity of Internet gambling and predicted that people would continue to sidestep laws.

"If they want to engage in online gaming, they're going to find a way to do so," said Mike McComb, director of marketing for Betmaker.com, a gambling website based in Costa Rica.

Cracking down on illegal Internet gambling would seem a sure bet for the Republican-controlled Congress. But since the first bill was introduced in 1997, attempts to pass restrictions have been repeatedly foiled for a variety of reasons, including the involvement of now-disgraced lobbyist Jack Abramoff, who represented an online lottery and campaigned heavily against such a measure, as well as quarrels inside the gaming industry over the scope of regulatory legislation.

After the Abramoff corruption controversy exploded last year, Goodlatte and other supporters of gaming restrictions used the revelations to try to push the legislation through again. Goodlatte successfully urged members of the House Judiciary Committee in May to pass the bill as a way to expunge the "smear" of the Abramoff scandal.

Late last month, House Speaker J. Dennis Hastert (R-Ill.) included the bill in the House Republican American Values Agenda. The legislation is supported by many conservative advocacy groups, including the Family Research Council and the Christian Coalition, which view it as necessary to keep children from gambling.

The bill also is backed by major sports leagues and the horse-racing industry because it contains special exemptions. Online fantasy sports leagues are allowed, as are state lotteries, if they can technically limit participants to those within state boundaries. Horse racing is not covered under the bill; Goodlatte said it was regulated by a separate law passed in 1978.

The exemptions have led to opposition from the Traditional Values Coalition, another conservative advocacy group.

"How, with a straight face, can you say you oppose gambling and then say it's OK to have lotteries and it's OK to have horse racing?" said Andrea Lafferty, the group's executive director.

The American Gaming Assn. is officially neutral on the bill, although it supports a proposal by Rep. Jon Porter (R-Nev.) to set up a congressional commission to study Internet gambling.

Internet gaming has not cost U.S. casinos money, and a recent poll for the gaming association showed that online gamblers visit casinos more often than average Americans, said Holly Thomsen, the group's spokeswoman.

Internet gambling also has led the recent surge in popularity of poker -- from televised tournaments featuring professionals to games in college dormitories -- and the bill should not apply to online poker sites, said Michael Bolcerek, president of the Poker Players Alliance, which was formed at the start of the year and has 30,000 members.

"People watch these great players, and then they go online on a free site or even a paid site, and they learn how to play for nickels and quarters," he said.

Bolcerek and some top professional poker players have visited several House lawmakers, playing a few hands with them to show that poker is a game of skill, not chance, and should not be regulated.

Goodlatte said the strong opposition by many offshore Internet gambling sites showed that the legislation would be effective.

But McComb, whose Costa Rica-based sites allow people to gamble not only on casino games but on the outcome of TV reality shows, said online gaming was too popular to stop.

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