Could Online Gambling Be Banned?

Just in time to become the prime topic at the upcoming 2nd Annual World
Internet Gaming Summit, a Congressional panel has voted to amend the federal
ban on interstate betting to include online gambling.

The House Judiciary subcommittee on crime has voted unanimously to OK an
update of the Wire Act of 1961, which bans interstate wagering. The amendment
would make it clear that the law applies to the Internet and other modern
communications (read wireless) as well as telephone lines.

“This legislation is badly needed because there are a great many offshore
sites that are sucking billions of dollars from American households,” said
Rep. Bob Goodlatte, the Virginia Republican who sponsored the bill.

The measure would allow law enforcement agents to take down U.S. sites found
in violation, or stop credit-card payments to sites operating outside of the

No doubt the pending legislation will be discussed at length at the gaming
conference March 21 and 22 in Miami. Experts from the fields of gaming, law,
regulation, and government are expected to speak.

Many of the estimated 1,400 gambling Web sites are based outside the United
States and thus are out of reach of local and state regulators. The
amendments to the bill would allow federal agents to obtain a court order
requiring credit-card companies and other payment services to cut off
transactions with the sites if the gambling sites could not be shut down

Online gambling sites took in an estimated $2.2 billion in revenues in 2000,
and could collect $6.4 billion by 2003, according to one study reported by

Fantasy-sports leagues, state lotteries and off-track betting on horse or dog
racing would not be affected by the bill, which now moves to the full
Judiciary Committee.

Casinos in the U.S. have been looking for ways to better incorporate online
gaming into their operations, particularly following the events of Sept. 11,
which caused travel to places such as Las Vegas to decline.

In fact, Las Vegas saw a 2.3 percent decline in visitors in 2001, to 35
million, the first decline in annual visits since 1982, according to the Las
Vegas Convention Visitors Authority. In September 2001, the number of
visitors dropped 14.1 percent compared to the previous month; visits since
then have largely recovered.

Nevada has passed a law that could allow existing bricks-and-mortar casinos
to set up online operations.

A ban on online gaming would affect more than just home-based blackjack and
virtual slot machine players; companies like West Greenwich, R.I.-based
-GTECH Holdings Corp. might also be impacted. GTECH supplies
or operates lotteries for about 80 customers in 36 countries (it operates
nearly three-quarters of all U.S. lotteries), according to Hoovers.

GTECH’s Dreamport unit offers gaming systems for entertainment markets, and
its GameScape unit provides gaming consulting services. GTECH’s Europrint/IGI
operation offers interactive and promotional games, while the company’s UWin!
division supplies Internet wagering systems.

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