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Accord reached to curb Net gambling

Floor vote could come as early as next week; odd alliances created

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WASHINGTON — A tentative deal has been reached in the House of Representatives on a bitterly fought bill to ban most forms of gambling on the Internet, clearing the way for a floor vote as early as next week.

The bill attempts to curb one of the fastest-growing activities on the Internet, wagering on casino-style games and sporting events. Industry analysts say there are more than 700 unregulated wagering sites on the Web, generating more than $1.2 billion annually in bets, with more sites appearing every day and the amount wagered doubling annually.

The legislation has created a number of odd alliances and has fattened the bank accounts of some of the most powerful lobbying and law firms in Washington. Evangelical Christian groups have lined up with horse track operators and liquor store owners to support the bill. Republican governors have joined with online sports bookies and operators of cyber casinos based in Antigua and Belize to try to kill it.

The measure, strongly backed by major sports leagues and the Nevada gambling industry, is an attempt to halt the rapid growth of online betting on casino-style games and professional and college sports by anyone with access to a personal computer, modem and credit card. The big Nevada casinos have put their money and considerable lobbying clout behind the bill to try to crush a competitive threat to their billion-dollar desert palaces.

The bill's sponsor, Rep. Robert Goodlatte, R-Va., engineered the compromise with fellow Republicans to move the bill, which had stalled in a fight over the treatment of horse racing and state lotteries. The measure, similar to one passed by the Senate late last year, is scheduled to be debated on the House floor next week. The bill's sponsors says the chance for passage in the House appears good.

Sue Schneider, chairman of Interactive Gaming Council, said that should the bill become law, it would be virtually unenforceable because technology is moving so rapidly and operators of Internet betting sites are more resourceful than would-be cybercops. The answer is not an ill-conceived ban, Schneider said, but legalization and regulation, as in 50 other countries.

Proponents of the bill disagree. The measure would require Internet service providers, like America Online, to block access to gambling sites. But service providers would not be liable for failure to do so. Compliance would be monitored by the Justice Department and state attorneys general.

The bill is supported by horse-racing interests, who successfully lobbied for an exemption from the bill's prohibition on computerized gambling. It would allow them to continue to build nationwide closed-circuit betting networks to compensate for declining attendance at racetracks.

The Justice Department opposed the exemptions.

"Simply stated, the department does not understand why the parimutuel wagering industry should be allowed to accept bets from people in their homes, when other forms of gambling have rightly been prohibited from doing so," Deputy Assistant Attorney General Kevin DiGregory told a House committee.

Rep. Chris Cannon, R-Utah, called the bill "a well-meaning attempt to regulate a pernicious vice (that) will actually allow gambling into America's homes." Opponents of the bill are well financed and aggressively represented as well. The opposition is led by the Interactive Gaming Council, an association of dozens of online betting parlors. The bill is also opposed by many governors, who see the Internet as an ideal way to increase lottery ticket sales. They are supported by technology firms, which lobbied unsuccessfully for the bill to allow computerized-in-home lottery sales.

Some conservative groups oppose the bill because of the horse-racing exemption; libertarians object to government regulation of what they consider a private vice.

President Clinton has not taken a formal position on the legislation. Vice President Al Gore opposes the bill, citing the horse racing exemption and what he considers the unwarranted federal intrusion on freedom of commerce on the Internet.

Gov. George W. Bush of Texas has no position on the bill, an aide said, although many of his colleagues have opposed it not only because of diminished lottery sales but also because they say it is as an infringement of states' rights.

Goodlatte's bill, the Internet Gambling Prohibition Act of 1999, closely resembles the Senate bill sponsored by Sen. Jon Kyl, R-Ariz., which passed by last November on a voice vote.

Goodlatte struck his deal on the bill with Rep. Billy Tauzin, R-La. In addition to the exemption to betting on horses, the bill also exempts betting on greyhounds and jai-alai. The horse racing exemption, he said, will not expand computerized betting because some types of computer-linked parimutuel betting are already legal under horse-racing and interstate gambling laws passed in 1961 and 1978.

"This bill does not legitimize any unlawful activity or expand the scope of otherwise lawful activity," Goodlatte said. "It simply bans a great many forms of gambling on the Internet: sports betting, more than 700 cybercasinos and the sale of lottery tickets in people's homes."


On the Net: www.house.gov/goodlatte/netgambling.htm