Curbing Internet Gambling

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In 1996, some 30 gambling websites were taking online bets, mostly from US customers, totaling over $30 million, according to Christiansen Capital Advisors. The gambling industry analysis firm estimates that last year, more than 1,800 gambling websites took in some $7 billion in online wagers. It projects $9.8 billion in revenue this year, and by 2010, an eye-popping $18.4 billion.

Never mind that the federal government considers Internet gambling illegal for American bettors, although federal rules are murky at best. (Internet gambling websites originate offshore and remain immune from US law.) And Congress has done very little to control the expansion of online gambling.

The last action it took was over a year ago, when the Senate Banking Committee voted to approve Internet gambling restrictions proposed by one of the gambling industry's chief opponents for the past 10 years - Senator Jon Kyl (R) of Arizona. On his website, Senator Kyl rightly notes, "Internet gambling encourages organized crime, is rife with fraud and abuse, ruins credit ratings [of the bettors], and leads many young people to amass thousands of dollars in debt on their parents' credit cards."

Kyl's bill still hasn't passed. Could it be that's because so much gambling industry money is finding its way into congressional campaign coffers? In 2004, the industry gave more than $9 million, roughly evenly split between Democrats and Republicans.

To its credit, the Justice Department has been vigilant, cracking down on companies carrying ads for gambling websites. It has also gone after banks that have allowed their credit cards to be used for online betting.

Yet the gambling industry now is fighting back - suing the Justice Department on First Amendment grounds. And some online poker sites are claiming that poker (a game now popular with teens) is a game of skill, not chance, and thus immune from even the weak federal anti-Internet gambling rules.

One change Congress ought to make: Revise the 1961 Wire Act, which prohibits placing or taking bets across state lines, to specifically include the Internet.

Federal, state, and local governments also should remain mindful of the myriad problems that gambling can cause. They need to help prevent a money-draining addiction to a belief in chance that has adversely affected the lives of so many individuals, instead of playing to special interests.