Some lawmakers worry that an exemption in the legislation aimed at protecting legal U.S.-based gambling could expand operations like horse racing, lotteries, dog racing to the World Wide Web.
The vote banning Americans from using credit cards, checks and electronic fund transfers to pay for online betting transactions passed 319-104 on Tuesday.
"Illegal Internet gambling is no better than an offshore mail order drug business," said House Majority Leader Tom DeLay, R-Texas. Government watchdogs say more than 1,600 illegal Internet casinos could bring in more than $4 billion this year.
A vote on whether to add an exemption for "any lawful transaction with a business licensed or authorized by a state" was closer — it passed 237-186.
Supporters said that passing the ban without the exemption would practically kill horse racing — which relies heavily on credit card transactions — and that states always have had the right to regulate gambling within their own borders.
"It would restrict the day to day wagering activities of millions of horse racing fans," said Rep. Harold Rogers, R-Ky.
Opponents said the legislation's broad language opened the door to U.S.-based Internet gambling. Most Internet gambling currently is illegal in the United States.
"A carve-out for horses and dogs and lotteries and jai-alai and Lord knows what else means that people will be able to use the Internet and use their credit cards and place bets and lose a whole lot of money," said House Judiciary Chairman James Sensenbrenner, R-Wis.
It is not known when or whether the Senate will consider its version of the bill, which also has the American gambling carve-outs.
The General Accounting Office, in a report last year, called Internet gambling "a fast-growing industry" with estimated 2003 revenues of more than $4 billion. Virtually all Internet gambling operations — the GAO estimated that there are 1,800 — are based outside the United States, posing a problem for enforcement.
The House bill carries no criminal or civil penalties. House supporters were forced to take out any reference to punishment to keep it away from Sensenbrenner and his House Judiciary Committee, which successfully eliminated the carve-out for American gambling establishments in committee.
Instead, supporters introduced a new bill and zoomed it through the Financial Services committee and to the full House for passage. Supporters say they plan to place criminal penalties back into the bill once it reaches a House-Senate conference committee.