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Double or nothing: new bills to regulate Internet gambling

© Alan Kotok

Internet gambling has become one of the new social issues attracting legislative interest, but like so many issues involving the Internet, making the law work as intended promises to be a challenge. Gambling, once seen as some kind of distant evil, is now found on most street corners in the form of state lotteries, and in casinos found in increasing numbers of localities. But attaching any form of electronic medium to gambling has long been a no-no in American law.

The current prevailing legislation, the 1961 Federal Interstate Wire Act, makes it illegal to knowingly use electronic communications to engage in the business of betting. Congress aimed the law at bookies and casinos taking bets over the telephone or teleptype, those in the business of gambling, not necessarily the individual gambler. This same interpretation seems to apply to the law's enforcement with the Internet: gambling over the Internet as an individual is okay, just don't put a gambling business on the Internet.

Despite the increasing popularity of gambling, many people find it troubling that any one can engage in gambling with nothing more than a computer and modem. The free availability of gambling over the Internet, among other reasons, prompted Congress to establish the National Gambling Impact Study Commission in 1996. The group, made up of nine commissioners represented a range of opinion on the issue; it included religious conservative James C. Dobson and J. Terrence Lanni, CEO and chairman of the MGM Grand casino.

Commission recommendations

The commission recommended as a general rule to leave gambling enforcement to the states rather than the Federal government, but on the subject of Internet gambling it made an exception because Internet gambling crosses state lines. The group expressly recommended that Federal law prohibit Internet gambling beyond any current licenses. It also recommended that the Department of Justice development enforcement strategies aimed at not only gambling sites, but the infrastructure that supports Internet gambling, including ISPs, credit card providers, funds transfer companies, and wireless communications systems.

The ability of gambling to hook minors also got the commission's attention. The group recommended that states not permit expansion of gambling into homes through any kind of technology, and also prohibit the expansion of betting through financial accounts. The commission focused as well on the money angle. It recommended making illegal any wire transfers to known gambling sites and the banks that support them. And the commission called for new legislation stating that any credit card debts incurred while gambling on the Internet are deemed unrecoverable.

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