High Stakes

The war on Internet gambling proceeds on several fronts. At the federal level, the Internet Gambling Prohibition Act, championed by Sen. Jon Kyl (R-Ariz.), passed the Senate as an amendment to an appropriations bill by a 90-10 vote in August. But the legislative clock may run out before a bill gets to President Clinton's desk this year. Companion bills haven't reached the House floor and aren't scheduled for a vote. (See "Bet Noire," December 1997.)

Bernie Horn, political director of the National Coalition Against Legalized Gambling, says anti-gambling activists "are in the position that anti-smoking activists were 30 years ago." He expects gambling opponents will succeed more rapidly by adopting the tactics of anti-smoking groups, particularly by emphasizing gambling as a public health problem fueled by "compulsive gamblers." Demonizing casinos and other gambling outlets is likely to be part of the plan as well.

As with tobacco, the states want a larger role in regulating the vice. Indiana Attorney General Jeff Modissett has sent a cease-and-desist letter to the Internet gambling service Rolling Good Times On-Line (www.rgtonline.com), saying, "If you are promoting or conducting gambling operations with Indiana residents, I demand that you cease these activities immediately." Missouri and Minnesota similarly claim jurisdiction over out-of-state companies, citing the federal Wire Communications Act, which prohibits the transmission of gambling information over telephone wires.

Meanwhile, the Pennsylvania legislature is considering a bill that would make the very act of betting by computer illegal. Another bill would prohibit only the "business of betting," targeting "virtual casinos." To enforce this law effectively, Pennsylvania authorities would need to prosecute companies in other states or perhaps in other countries, potentially violating the U.S. Constitution's Commerce Clause. At press time, hearings were being held on both bills.

This war on betting won't end anytime soon, since states are determined to "create and ensure the viability of a source of state revenue"--the lotteries they operate. That assessment came not from a free market think tank but from U.S. Assistant Deputy Attorney General Kevin V. DiGregory, in testimony before Congress earlier this year.