Lawmakers Battle Over Web Gambling

(AP)  A small bipartisan group of lawmakers wants to let states regulate and tax Internet gambling, even as others in Congress renew efforts to ban the burgeoning form of wagering.

Rep. John Conyers, D-Mich., introduced legislation Wednesday that would pave the way to legalizing Internet gambling in states interested in licensing, overseeing and collecting taxes from the growing industry.

"Just as outlawing alcohol did not work in the 1920s, current attempts to prohibit online gaming will not work, either," said Conyers, the ranking Democrat on the House Judiciary Committee.

In a series of votes since 1998, large majorities in the House and Senate have voted to outlaw gambling over the Internet. Disputes over how to define illegal gambling, what forms of wagering to exempt and how to enforce a ban have prevented Congress from agreeing on legislation.

Opponents of Internet gambling are resuming their campaign, and the House Financial Services Committee is considering legislation that would prohibit the use of credit cards, checks and electronic fund transfers to pay for online betting transactions.

Internet gambling has exploded. Christiansen Capital Advisors, which studies the gambling industry, estimates that online wagering worldwide will top $6 billion this year and $10 billion in 2005.

But leaders of the long-running effort to ban Internet gambling say it cannot be effectively regulated.

Rep. Bob Goodlatte, R-Va., said he doubts that an online casino would ever be able to distinguish a bet placed legally in a state that regulates Internet gambling from a bet placed illegally in a state that bans it.

The Conyers bill would create a commission to study such questions.

A British online trading company, Sportingbet PLC, estimated that U.S. states could have collected $1.4 billion in 2002 by taxing Internet gambling as they do real casinos.

MGM Mirage Inc., the largest operator of Las Vegas Strip hotels, last year became the first major U.S. gambling company to open an online casino, based in and regulated by the Isle of Man off the British coast.

Because the current legal status of Internet gambling in the United States is hazy — some site operators have been prosecuted under the 1961 Wire Communications Act, written to cover sports betting via telephone — MGM's online casino does not yet accept bets from the United States.

MGM Mirage spokesman Alan Feldman said the Conyers proposal is a welcome indication that some lawmakers have open minds about how technology and the public appetite for gambling have evolved.

"This is deserving of a good debate here in the United States," he said. "Let's look at technology today, where the industry stands today, and what the public is doing. There are hundreds of thousands of Americans who go online every day and wager millions of dollars."

The American Gaming Association, which represents commercial casinos, continues to support a ban on Internet gambling "as it exists today," while holding out the option of backing a system in which online casinos are regulated and taxed.

But Nevada Sen. Harry Reid, the No. 2 Democrat in the Senate, said late last year that online gambling is still "ripe for cheating" and should be banned.

By Laurence Arnold