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Hill stymied by online gambling

While some members of Congress are still determined to restrict this fast-growing corner of cyberspace, others are struggling just to crack down on NCAA betting.

WASHINGTON--When Congress failed last year to restrict online gambling, there were about 700 sites on the Web. Now there are twice as many.

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 Senator bets online gambling won't win
Jon Kyl, senator, R-Ariz.
With that increase in mind, Sen. Jon Kyl, R-Ariz., and Rep. Bob Goodlatte, R-Va., have said they will reintroduce their online gambling legislation this Congress, albeit with possible adjustments to improve the chance of final passage after last year's legislation fell just short.

The number of online gambling sites comes from a new report by Bear Stearns, which also points out that enthusiasm for passing legislation to ban online gambling may be waning in Congress.

Goodlatte counters that claim. "We're working with the (Bush) administration and our supporters" but will introduce new legislation shortly, he said. Goodlatte noted that in the last Congress the Clinton administration opposed the bill, but Bush's Attorney General, John Ashcroft, was a strong supporter of Kyl's bill when he was in the Senate last year.

Goodlatte said he also is working with Rep. Jim Leach, R-Iowa, who has reintroduced a bill that would prevent the use of credit cards and other means to pay online gambling sites.

Kyl and Goodlatte feel a sense of urgency on the issue because of the explosive growth of online gambling. But to some market analysts, it's just another way to make money.

"This is becoming a real opportunity," said Bear Stearns analyst Marc Falcone. "There is a great deal of potential, and it is evidenced by the number of sites that are sprouting up."

Falcone was pessimistic about the chances of Kyl and Goodlatte to pass a bill this Congress.

"I get the impression most legislators realize how difficult it would be to ban online gambling from every computer in the United States," he said.

Adding to the pessimism is a Public Citizen report issued last week that says the gaming industry gave $3.9 million to political parties last year, a 70 percent increase from the previous cycle.

Goodlatte said urgency to pass legislation has increased. He added that he isn't concerned with the amount of money given to political parties by the gaming industry because he has the support of legislators in Las Vegas and Atlantic City, who don't want to see gaming dollars go abroad.

"I think my colleagues are more receptive because the problem is growing," he said. Offshore online gambling sites are "sucking money out of this country." He said that for the first time state lottery revenues are down, attributing the loss to more people gambling online.

Betting via the Web
As the nation becomes engrossed in the National Collegiate Athletic Association (NCAA) basketball tournament, the power of the gambling lobby is becoming clear, some argue.

Reps. Lindsey Graham, R-S.C., and Tim Roemer, D-Ind., have said they will press forward this week with legislation banning betting on college sports after seeing no action in the Senate from leading advocates Sam Brownback, R-Kan.; John McCain, R-Ariz.; Patrick Leahy, D-Vt.; and John Edwards, D-N.C. The legislation is backed by the NCAA but failed to pass last Congress.

Although the legislation seeks to ban all betting on NCAA athletics, it is becoming seen as an online gambling bill because of the rapid rise of betting on amateur athletics on the Web. In fact, Tuesday a federal judge froze the U.S. assets of two online gambling sites operated by BBF International because the company was using the NCAA trademark as part of its gaming operation on college games. The NCAA had filed suit March 16, a day after filing a similar suit against online gambling operator SBG Global.

Graham said last week that his bill faced an uphill battle for passage.

"The influence of money to both parties last year after this bill got a hearing was immense, and it mattered," he said.

That was the consensus of Public Citizen in its report issued March 15. According to the report, the gaming industry contributed $2.3 million to Republicans in the 1999-2000 election cycle and $1.6 million to Democrats, with most of the money going to congressional fund-raising committees.

The American Gaming Association, which coordinated much of the fund raising, said it would make "no apology" for using legal means to share its members' views with Congress.