Speakers Suggest More Study on Internet Gambling

Legislators from around the country were urged June 2 to study existing regulations in the United States and around the world before they alter their policy statement on Internet gambling.

The National Council of Legislators from Gaming States, during a meeting in Boston, took testimony during a two-hour hearing on Internet gambling. NCLGS, a pro-states' rights organization, for almost seven years has been opposed to Internet gambling on the grounds it interferes with the ability of states to regulate gaming within the borders.

Florida Sen. Steven Geller, president of NCLGS, said emerging technology and other issues have led the organization to consider re-establishing its position on Internet gambling. Congress currently is considering legislation that would stymie Internet gambling by outlawing use of credit to make bets.

Testimony taken at the hearing varied from outright opposition to Internet gambling to a call for Congress to form a commission to study the issue before it passes any laws. The pari-mutuel horse racing industry, meanwhile, has the only legal form of Internet wagering thanks to a 2000 amendment of the Interstate Horseracing Act that legalized account wagering across state lines.

The Department of Justice has argued interstate wagering on racing is prohibited under the federal Wire Act; the National Thoroughbred Racing Association and its lobbyists disagree with that assessment.

"This is not a question," said Greg Avioli, senior vice president of legislation and corporate planning for the NTRA. "It is in fact the law today. Don't be afraid of Internet gambling. The U.S. government will not be able to prohibit it or limit it to intrastate only. People would rather be legal than not be legal."

Legalization of Internet gambling has appeal in some quarters because the bets could be taxed; a member of Congress suggested such a plan during an April subcommittee hearing in Washington, D.C. Speakers noted countries such as Australia and Great Britain have had some success in legalizing the practice, and that even in the U.S., Oregon does so through its multi-jurisdictional betting hubs used by account wagering companies.

NCLGS members were particularly intrigued with testimony from Bill White of Global Cyber, a company that has developed a patented system to regulate Internet gambling. White said the protocol would establish where a gambler is located and deny access to online gaming if necessary, enable taxation of Internet gambling, help prevent problem gambling, and provide transparency for regulators.

"What's wrong with Internet gambling is the absence of regulation," White said. "What's wrong is you legislators and regulators can't get control of Internet gambling."

Judy Patterson, senior vice president and executive director of the American Gaming Association, a commercial casino trade group, said a study commissioned by the AGA suggested that a Congressional study commission is needed to tackle the issue. The AGA remains neutral on Internet gambling but does support the study, she said.

Patterson discussed the results of an AGA-commissioned survey of 552 Internet gamblers that revealed "confusion" by players. Only 19% of those surveyed realize, or are willing to admit, that online gambling is illegal in the U.S., the study showed.

In addition, the study indicated 55% of those surveyed believe online casinos find ways to cheat players, and 46% said they believe other people who bet online find ways to cheat.

Other Internet gamblers are taking a proactive approach. Testimony revealed that about 20,000 online poker players have formed an alliance to lobby Congress and protect their interests.

NCLGS will accept testimony on Internet gambling through Sept. 1. Geller said it's possible the organization could adopt a revised policy during its winter meeting in early 2007.