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Attempt to ban gambling on Internet gains support

WASHINGTON (BP)–A congressional effort to ban gambling on the Internet debuted March 23 with even greater support than last year.
In a hearing before a Senate subcommittee, the Major League Baseball Players Association announced it no longer objected to the Internet Gambling Prohibition Act. A spokesperson for the baseball players said she is confident the National Football League Players Association and the National Hockey League Players Association also will drop their objections.
The baseball players association chose to support the legislation because in its latest version the bill clarifies it does not outlaw fantasy sports leagues that are legal in some states and it does not penalize individual gamblers, said Marianne McGettigan of the MLBPA.
The proposal to ban Internet gambling is an updating of a 1961 law that prohibited the use of telephone facilities to receive bets or send gambling information. The bill covers sports gambling and casino games. A business that offers gambling on the Internet can be fined the amount received in bets or $20,000, whichever is greater. A prison term of up to four years also is possible.
Under the bill, an Internet website found in violation will have its service cut off. If an Internet service provider is unable to cut off service to the site, it will not be liable, said Sen. Jon Kyl, R.-Ariz., the bill’s author. Kyl also is chairman of the Judiciary subcommittee that held the hearing.
Kyl said he hopes the Subcommittee on Technology, Terrorism and Government Information will act on the bill in April.
Last year, a similar bill by Kyl passed the Senate by a 90-10 vote. A House of Representatives subcommittee approved it, but the full Judiciary Committee never acted on the legislation.
Among those testifying in support of the bill were representatives of the National Collegiate Athletic Association, the National Football League and the National Association of Attorneys General.
Their warnings included the threat Internet gambling is to young people and to the integrity of sporting events.
Sports gambling, though it is banned in 47 states, “remains a growing problem on college campuses,” said Bill Saum, the NCAA’s director of agent and gambling activities. “If left unchecked, the growth of Internet gambling may be fueled further by college students. After all, who else has greater access to the Internet? Many college students have unlimited use of the Internet, and most residence halls are wired for Internet access.
“Internet gambling offers students virtual anonymity.”
All they need is a credit card, Saum said. Representatives of credit card companies are swarming college campuses with free gifts for students who complete credit card applications, he said. Saum cited a recent survey that showed 65 percent of undergraduate students have at least one credit card and 20 percent have four or more.
A 1998 University of Michigan study of NCAA male and female athletes revealed 35 percent have gambled on sports while in college, Saum said. More than 5 percent of male athletes said they gambled on a contest in which they played, provided tips for betting purposes or took money for performing poorly in a game. Saum cited point-shaving scandals in the last year by teams at Northwestern and Arizona State universities.
“With nothing more than a credit card, the possibility exists for a student-athlete to place a wager via the Internet and then attempt to influence the outcome of the contest while participating on the court or playing field,” Saum said.
Sen. Dianne Feinstein, D.-Calif., the subcommittee’s ranking minority member, warned if Internet gambling escalates, “the threat to the integrity of our athletic events will also escalate.”
Many Internet gambling sites are designed “to resemble video games, and therefore are especially attractive to children,” said Jeffrey Pash, the NFL’s executive vice president. “Sports betting is a growing problem for high school and college students, who may develop serious addictions to other forms of gambling as a result of being introduced to ‘harmless’ sports wagering.”
Kyl cited a recent article in the American Bar Association Journal that said on-line gambling “is generating a $600-million-a-year kitty that some analysts say could reach as high as $100 billion a year by 2006.” The article also said the number of Internet gambling sites has grown from about 60 in late 1997 to an estimate of more than 260.
It is “crucial to act now,” because it will be impossible to do something about Internet gambling before long, said Ohio Attorney General Betty Montgomery.
“[W]e have yet to see the real addictive nature” of Internet gambling, “but we’re right on the verge of it,” said Wisconsin Attorney General James Doyle.
The states desire the federal government’s help against gambling on the Internet because “any single state or any combination of states can have only a limited effect in controlling the myriad of activities occurring in that medium,” Doyle said.
Sue Schneider, chairman of the Interactive Gaming Council, criticized the bill in a written statement distributed at the hearing. Schneider, who was not invited to testify, said regulation, not prohibition, was the proper long-term response to Internet gambling. IGC is the trade association representing interactive gambling operators, suppliers and consumers.
Regulation “would not be effective,” Doyle said. “There are simply too many work-arounds and too much anonymity programmed into the infrastructure of today’s Internet for any regulator to vouch for the security and identity of the Web gambling operator.”
Americans “should know that they will not be able to turn to the government for help when they lose their money to an unknown operator on the other end,” Doyle said.
When asked by Feinstein if the state attorneys general favored adding an exemption for Indian tribes to the bill, Doyle said they would “very much oppose such an exception.”
Fantasy sports, which predated the Internet, brings together fans who draft players from among existing professional rosters, thereby forming teams that exist only in their league. The standings for the league are based on a formula using game-by-game statistics compiled by the player during the real season. Some Internet fantasy leagues charge administrative fees, and some award a prize to the season champion.