Congress Expected To Show Its Hand On Online GamingCongress Expected To Show Its Hand On Online Gaming

As legislation moves through Congress calling for the prohibition of online gambling, opposition is growing along with a plea by some who are urging that the $12 billion Internet gaming business be regulated.

"No matter what bill Congress passes, nothing will stop online gaming," said former New Jersey gaming regulator Frank Catania in an interview Thursday. "There are 70 jurisdictions around the world operating legally and nothing is going to stop them from taking bets."

Catania, former assistant attorney general and director of the New Jersey Division of Gaming Enforcement, said the answer is to regulate online gaming in much the same way that non-Internet gambling has been regulated.

On Wednesday, the U.S. House Financial Services Committee approved a bill aimed at stopping online gaming businesses from accepting payments from U.S. citizens in states where betting is illegal. The bill now goes to the whole House for a vote. Other anti-online gaming legislation entitled "Internet Gambling Prohibition Act," has been proposed by Congressman Bob Goodlatte (R-Va). In the Senate anti-online gaming legislation has been proposed by Senators Jon Kyl (R-Ariz.) and Mark Pryor (R-Ark.).

The legislation has been supported by the National Football League and Major League Baseball as well as by other organizations. However, the senior Democrat on the House Financial Services Committee, Massachusetts Democrat Barney Frank, came out against the House legislation. "Adults are entitled to do with their money what they want to do," Frank said, according to the Reuters news service.

One online gambling company executive, David Carruthers, echoed many opponents of the proposed legislation. "Trying to shut down a multibillion-dollar industry with consumer demand that includes an estimated 8 million Americans annually is an empty legislative effort," Carruthers, CEO of BetOnSports, wrote in Thursday's Los Angeles Times.

"…This law shouldn't be applied to Internet betting. No case law or statute clearly defines where Internet bets are taking place. BetOnSports, for example, is based in Costa Rica. Our customers can place bets from anywhere that has an Internet connection. In part because of this ambiguity, no one has been prosecuted for online betting under the law."

Catania said the online gaming industry could be regulated relatively easily to protect U.S. citizens. He said he worked with the Kahnawake Mohawk Indian tribe in Canada to establish rules to protect online gamblers. Catania suggested that gaming sites could be required to be certified by regulatory bodies to conduct gambling with U.S. players. For instance, players could be required to initially limit their bets to $250 and an age limited of 18 could be established. A fund could be set aside to provide counseling for compulsive gamblers.

Operators would undergo "background checks to make sure they are fair and honest," he said, "and to make sure people are paid when they win." Catania said some states have already expressed an interest in regulating online gaming and he added that the U.S. Virgin Islands is prepared to begin some online gaming activity.

In another online gaming development, gaming executives are planning to meet next month at the Casino Affiliate Convention in Amsterdam to discuss a recent move by government agencies in Italy to block online casino websites.