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Leading senator to revive anti-Net gambling bill

Republican Jon Kyl of Arizona will reintroduce a watered-down Internet Gambling Prohibition Act, but some push for regulation, not prohibition.

An influential lawmaker is expected to revive the Internet Gambling Prohibition Act this week.

Sen. Jon Kyl (R-Arizona) will reintroduce the bill in time for his Technology, Terrorism, and Government Information subcommittee's hearing on Net gambling tomorrow.

But Kyl has drastically paired down the legislation, according to a draft of the bill obtained by CNET News.com. For starters, Kyl will likely drop a provision would have slapped "casual" bettors with $500 fines and three months in prison for just one roll of the cyber dice.

Last year the Senate voted 90-10 to add a ban against online gambling onto a spending bill, but it didn't clear the full Congress.

Meanwhile, observers say an emerging Australian model does a better job with the issue of online gambling, seeking to regulate rather than prohibit the widespread practice.

"Australia is going to collect taxes and truly protect consumers. The Kyl bill is under guise of consumer protection, but that is not going to be net effect," according to Sue Schneider, chair of the Interactive Gaming Council, which opposes a ban on Net gambling.

Kyl's bill would include the Internet under the existing law prohibiting the use of any wire communication for accepting interstate or foreign wagers, which the Justice Department estimates was a $600 million industry in 1997. Cybercasino operators would face fines up to $20,000 and four years in prison for violating the act, and Net casinos based on Indian reservations would be prohibited.

According to the draft, however, the prohibition would not apply to "closed-loop" subscription-based gambling services, fantasy sports leagues, overseas sites, state lotteries, powerball, horse racing, or online sports pools--as long as it is legal in the states where online bettor is participating.

"They've managed to get every type of exception in there--I'm not sure it should be call the 'Internet Gambling Prohibition Act' anymore," said Schneider. "But they took the casual bettor provision out, and that is a good sign,"she added.

Still, Schneider, who attended the Casino and Gaming Conference and 1999 Gaming Forum Gaming in Australia last month, observed that "Australians are using same standards for land-based gambling by doing background checks, checking the solvency of companies, and testing the [fairness] of the games."

Kyl's gambling hearing is stacked with witnesses that oppose Net wagers. The list includes Wisconsin attorney general James Doyle, representing a state that has cracked down on cybercasinos, National Football League executive vice president Jeff Pash, on behalf of an organization that supported last year's bill; and the National Collegiate Athletic Association's director of agent and gambling activities, Bill Saum.