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Gambling regulator in the works

A newly formed group of gaming law attorneys are working on what could be the first body designed to monitor online gambling.

Brick-and-mortar casinos tend to generate healthy profits, but they also are heavily regulated in an effort to keep the businesses on the straight and narrow. A newly formed working group would like to do the same for Net gambling--for the same reasons.

After meeting at a little-known legal conference last month, a group of gaming law attorneys have banded together to hammer out what could ultimately be the first body designed to license, review, and monitor online wager operations located in areas of the world where the practice is legal. At the very least, the so-called International Internet Gaming Association (IIGA) will draft a list of voluntary guidelines to which online casinos could agree to adhere.

The group came together at the privately held "International Symposium on Internet Gambling Law & Management,'' sponsored by the journal, Gaming Law Review, which about 300 people representing 25 countries attended November 12-13 in Washington. Participants listened to regulators, attorneys, and gambling experts who discussed the current laws around the world that regulate Net wagering. Software makers and gaming companies also discussed new cyber-betting technologies and e-commerce security issues. Apparently, FBI agents wearing badges were also part of the crowd.

Despite the revenue potential of online casino games, sports betting, horse-racing sites, lotteries, or bingo, the U.S. gaming industry has been operating in uncharted territory that is nonetheless governed by the states. In the past year, state attorneys general in Wisconsin, Missouri, and Minnesota have waged legal battles against online betting sites inside and beyond their borders. Corporate officers for virtual casinos have even been indicted for accepting bets from patrons who live in states were the practice is outlawed. On the other hand, across the globe in places like Australia, the practice is being legalized and regulated, making it even harder to keep gambling out of jurisdictions where it is illegal.

When Congress picks up next January it may consider the Internet Gambling Prohibition Act to federally ban online gambling. In the meantime, the International Internet Gaming Association will wade in the murky legal waters to figure out a feasible way for gambling to legitimately and legally exist on the Net. The IIGA likely will work with the Interactive Services Association's 35-member Interactive Gaming Council, which has been lobbying to derail the federal legislation and already has a self-regulatory policy.

"In order to get a gaming license you have to go through a very thorough screening process, and if there is a hint that you have ties with organized crime, you will never get a license," said Joseph Kelly, the conference chair and associate professor of business law at the New York State University College at Buffalo. "Everybody at the symposium shared the concern that if you operate an Internet casino in a country [where] it is legal, how does anyone know that the game is on the level?"

The working group will try to help the online gambling industry establish trust among consumers and law enforcement that Net casinos are playing fair and following the business and civil codes.

"One major point is to possibly set up an all-powerful Net gambling board to review all Internet operators who chose to be regulated and licensed. They won?t do it because they're saints. It's because it's good business in the long run," said Kelly, who wrote the chapter "Internet Gaming Law" for the third edition of International Casino Law.

The first proposals from the working group are expected to be announced at the next Net gambling conference in June.