Tuesday, October 10, 2006

The US Congress has passed tough new federal restrictions on online
gambling, including measures that prohibit US gamblers from using credit
cards, cheques and electronic fund transfers to settle online wagers. The
move came just hours after Peter Dicks, former chairman of Sportingbet, the
British internet bookmaker, was freed by a New York court, signalling defeat
for Louisiana's attempt to enforce its law against online gambling and
increasing doubts about the ability of individual US states to prohibit the
practice. But thanks to the new legislation, pushed through Congress by
Republican senators, relief for the industry proved to be short-lived. "This
enforcement provision provided by this bill will go a long way to stop these
illegal online operations," said Jon Kyl, Republican senator for Arizona,
who led the push for action together with Bill Frist, Senate majority leader
and a possible Republican presidential candidate in 2008. "Congress has
grappled with this issue for 10 years, and during that time we've watched
this shadowy industry explode," Mr Frist said. "For me, as majority leader,
the bottom line is simple: internet gamble is illegal." While the measures
strengthen the legal armoury against online gambling in the US, it remains
far from clear how they will be enforced. Pragmatists argue that any attempt
to stamp out online gambling is futile, given the difficulty of preventing
individuals placing bets with foreign websites in the privacy of their own
homes. Some credit card companies and banks have lobbied for regulation
rather than prohibition, fearing that the financial services industry could
be held responsible for handling illegal online bets.

The US casino gambling industry, irked at the loss of gambling dollars to
foreign internet companies, also favours regulation, allowing it to compete
in the market legally.

Almost all online bookmakers are based outside the US, many of them in the
UK, where internet betting is legal. In the absence, until recently, of any
serious attempt to enforce laws against the industry, the US has grown into
the world's largest online gambling market.

The most explicit legal threat posed to the industry until Friday was a
patchwork of state laws prohibiting online gambling, such as the one used by
Louisiana to pursue Mr Dicks. But the measures agreed by Congress
significantly increases the legal deterrent against internet betting in the
US by establishing a clear, nationwide law against the practice.

The bill, passed a day before Congress goes into recess for midterm
elections, followed years of pressure for action from Christian conservative
groups and other gambling foes. The new measures were attached to an
unrelated bill aimed at enhancing port security.