Net Gambling Ban Stalls in U.S. House

The burgeoning online gambling industry won a political victory Monday when a bill to ban online casinos failed to pass the U.S. House of Representatives. A similar bill has already been passed in the Senate.

Although lawmakers voted 245-159 in favor of the measure, it fell 25 votes short of the two-thirds majority needed for approval, according to special floor rules under which it was considered. The Internet Gambling Prohibition Bill would have banned the sale of lottery tickets online, online casino games, and online wagers on sporting events. Exempted from the bill were horse racing, greyhound racing, and jai alai.

In an eleventh hour move, the Clinton administration announced its strong opposition to the legislation, saying that the law appeared designed to protect certain forms of Internet gambling that currently are illegal while “opening the floodgates for other forms of illegal gambling.”

Bill Would Block Access

The bill’s sponsor, Rep. Robert Goodlatte (R-Virginia), said he hoped the House leadership would “honor the will of the majority” and bring the bill up for another vote — this time under normal rules requiring only a simple majority for passage. If the bill eventually passes, it would bar U.S. gambling businesses from receiving or placing bets online and require U.S. Internet service providers to block access to gambling sites.

The proposed law would make it a federal crime — punishable by up to four years in prison and fines of $20,000 (US$) or more — to operate a Web site that accepts wagers from Americans.

Both pro-gambling Internet entrepreneurs and anti-gambling social groups worked to block the bill Monday. Groups in favor of the proposed law included the commercial casino industry, the National Association of Attorneys General and the Christian Coalition.

Opening the Floodgates

In a statement, the Office of Management and Budget (OMB) said it objected to the measure because of loopholes that would allow betting on dog and horse racing from home, potentially allowing children to place wagers. The U.S. Department of Justice (DOJ) had also opposed the measure because of the exemptions.

Rep. Bill Tauzin (R-Louisiana) said he had similar concerns last week, but allowed the measure to come to the floor after Rep. Goodlatte inserted a provision in the bill stating that the measure would not legalize gambling activities that are currently outlawed.

Daily Gamblers

Major sports associations and the brick-and-mortar gambling industry strongly backed the measure, hoping to eliminate any online competition. Currently, there are about 700 online gambling sites, a business that is predicted to grow from $1.1 billion in 1999 to more than $3 billion by 2002, according to a recent industry report.

A phone survey of Internet users by the Pew Internet & American Life Project found that 1 million Americans gamble online each day and that 4.5 million have gambled online at least one time.