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America Boldly Outlaws (and Quietly Legalizes) Internet Gambling3 May 2000
Governments around the world are responding in different ways to the explosion of gambling on the Internet:
The federal and state governments of the United States are the best examples of how lawmakers can proclaim publicly that they are outlawing betting on the Internet, while they actually are taking steps to make it legal.
Nevada was the first state to both outlaw and legalize Internet gaming. In July 1997 Gov. Bob Miller signed SB 318, creating the misdemeanor of making or accepting a bet over the Internet from a player located in Nevada. SB 318 is a significant step toward the regulation of the Internet, because it is the first statute to explicitly make Internet gambling a crime in a state, even if the operator is not within that state's territory.
But SB 318 is also important for the exceptions it carves out of its new prohibitions. Making and accepting bets on the Internet are legal if the wagers are accepted in Nevada by Nevada-licensed race and sports books and casinos.
Nevada companies are gearing up to accept bets by computers. But the State Gaming Control Board is limiting operators to closed-loop systems: players can bet from their home personal computers ("PCs"), but their modems will be connecting the players' PCs directly to the operators' computers. Bettors cannot use this system to jump to a site on the Internet.
The Board has not issued regulations allowing true Internet gaming. In fact, it is requiring that the bettor be in Nevada and that the closed-loop system be able to confirm that no bets are taken from outside the state.
Nevada is ready to go, to allow its licensees to take bets on the Internet, as soon as Congress lifts the federal restrictions on interstate wagers.
Louisiana and Illinois were the next states to act. Although the Louisiana law is poorly written, they both appear to prohibit all gambling on the Internet.
The most recent state to act, Michigan, is following Nevada in a big way. In December 1999 Gov. John Engler signed SB 562 into law. SB 562 looks like it is merely extending parts of the state's criminal law to the Internet: Computers cannot be used for stalking, making bomb threats or gambling.
But a careful reading finds that only forms of gambling that are already illegal are barred from the Internet. Michigan law now clearly allows its state lottery, racetracks, casinos and bingo halls to accept bets online.
The most interesting proposal is the Kyl bill, now working its way through the political maze in Congress. Three years ago, the "Internet Gambling Prohibition Act," authored by Sen. Jon Kyl (R.-Az), would have outlawed everything, including online magazines and casino advertisements.
Its major weakness, besides violating the First Amendment, was that it would also have made it a federal crime to merely place a bet. The U.S. Department of Justice, which does not have fond memories of Prohibition, made it clear that it did not support a law that would require knocking on bedroom doors to go after $5 bettors. So the Kyl bill had to be amended.
As this is being written, a much revised Kyl bill has passed the Senate and is pending in the House. In its present form, it outlaws all Internet gambling ... except:
Politicians may talk Prohibition, but the future clearly is partial legalization.
This article is provided by the Frank Scoblete Network. Melissa A. Kaplan is the network's managing editor. If you would like to use this article on your website, please contact Casino City Press, the exclusive web syndication outlet for the Frank Scoblete Network. To contact Frank, please e-mail him at email@example.com.
Best of I. Nelson Rose
I. Nelson Rose
I. Nelson Rose