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Cloud still hanging
over online gaming

Jan 13, 2004 7:29 AM

So, just what is the status of Internet gaming and where is it headed, according to the National Council of State Legislators from Gaming States (NCLGS)? Well, the answer is a diverse one.

"Though illegal in the United States, Internet gaming is alive, well and elusive," former New Jersey Assistant Attorney General Frank Catania said during a panel session at the NCLGS winter meeting held over the weekend at Harrah’s Resort & Casino.

"I am an advocate of interactive gaming regulations," said Catania, who has been involved in gaming both as an attorney and legislator for the past decade. "The Internet raises public policy issues, but it needs to be regulated. If not, it will go underground."

Catania suggested that states with the strictest regulations on gaming should dictate policy on how to handle Internet wagering.

"The United Kingdom is preparing to revamp its entire Internet gaming system," Catania said. "By 2005 all gaming, including sports betting, is expected to be placed under one regulatory agency. The British operators would not stop licensees from taking bets from U.S. citizens, even though Internet gambling is illegal here. The fear is that would prevent any revenue from coming to the States."

Keith Kizer, a high-ranking official in the Nevada attorney general’s office, noted that federal legislation has slowed down off-shore betting, even though Internet gambling is illegal when originating from the U.S.

"In July, the Senate Banking Committee approved legislation to ban credit card and other types of electronic payments to offshore casinos," Kizer said. "The ban carries criminal penalties of up to five years in prison for violators."

The bill adds more teeth to the original 1961 Wire Act, which prohibits all forms of gaming except for pari-mutuel wagering in all but four states, one of which is Nevada.

"Internet gaming is in limbo as far as legislation is concerned," Kizer said. "We regulate gambling to get revenue for the state. One possible way would be through Intranet wagering, which would come from within the state. You could also call it convenience gambling. Intranet would eliminate going through the federal process, but nobody has pushed for it."

Toni Cowan, legal counsel to the Nevada Gaming Commission, painted a bleak picture regarding international cooperation over Internet gaming.

"It’s unlikely we’re going to get it," Cowan bluntly said. "We’re moving to a global economy, which is the very nature of the Internet. There is no parallel in history to the type of technology we are looking at in the Internet."

Cowan would also like to see the term "cyberspace" erased.

"The Internet is like a spider’s web," she said. "When you try to legislate against it, you get caught up in so many international laws that often provide problems of enforcement. Our figures have found that over 80 percent of Internet gaming comes from the U.S."

Rev. Tom Grey, spokesman for the National Coalition Against Legalized Gambling, actually found some friends at the meeting in taking a stand against Internet wagering.

"The Internet is the third rail of gambling," Grey said. "Australia is 10 years ahead of the U.S. in Internet gaming and they put a moratorium on it. There is nothing but negative baggage coming from the Internet. Tell me, how many jobs is the Internet providing?"

Grey offered a solution to the Internet situation.

"Do nothing," he said. "It’s illegal."