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From National Journal, one of the major political news outlets.

07-12-2006
JUDICIARY - House-Passed Online Gaming Ban Faces Long Odds In Senate
Bill Swindell
© National Journal Group, Inc.

The House passed legislation Tuesday that would ban most forms of Internet gambling, but the measure faces an uphill battle to make its way onto a crowded legislative calendar in the Senate.

The House voted 317-93 for the legislation, which is sponsored by Reps. Jim Leach, R-Iowa, and Bob Goodlatte, R-Va. The bill would bar banks and credit card companies from processing payments for online bets and would make it a crime for a gambling business to accept credit cards, wire transfers or any other bank instrument to process payments for illegal gaming transactions.

The House bill also would amend the 1961 Wire Act, which prohibits businesses from using wire transmissions to accept bets over state and foreign lines, and apply the gambling ban to all forms of new technology.

Sen. Jon Kyl, R-Ariz., the Senate's leading opponent of the online gambling industry, said he would prefer the chamber not amend the Leach-Goodlatte bill and instead clear the measure to send to the White House. "I hope that we can just take the House bill because it's a good bill," Kyl said.

In a Statement of Administration Policy, the White House said it supports the House bill even though it has unspecified concerns with the measure and "looks forward to working with Congress to strengthen and improve this legislation."

Proponents contend this year represents the best opportunity to pass legislation to crack down on the industry because of the political fallout from the Jack Abramoff lobbying scandal. Abramoff was instrumental in helping defeat an Internet gambling ban on the House floor in 2000."

Timing is everything now that the House has acted on a good
bill," Kyl said. "My fear has always been that these offshore outfits would get to be so wealthy from all this gambling ... that they would hire enough people to make this difficult."

Online gambling outfits, all of which are located offshore, have not been publicly active in lobbying, instead relying on a newly formed Poker Players Alliance to voice opposition. That group argues the bill would infringe on the civil liberties of millions of U.S. poker players.

On Tuesday, the National Indian Gaming Association announced its opposition to the bill, saying that it contained carve-outs for the horse-racing industry and state lotteries. But the House measure would not directly affect Indian tribes. The Leach-Goodlatte bill would not change the way states and Indian tribes regulate gambling and allows them to make online gambling legal within their borders if they found a "secure and effective" way to verify the location and age of the gambler.

Much focus in the Senate will be on Minority Leader Reid, who has been a strong congressional advocate for his home state of Nevada's gambling industry. Reid said Tuesday that he is opposed to Internet gambling, but has not taken a position on the House bill.

The American Gaming Association, which represents the U.S. gambling industry, is neutral on the House bill, even though some members such as MGM Mirage have been supporters of expanding online activities.

The association has called on lawmakers to conduct a comprehensive study on the online gambling industry before taking any action.All three Nevada House members -- Republicans Jon Porter and Jim Gibbons and Democrat Shelley Berkley -- voted against the measure Tuesday. "I am going to speak with him [Reid] in the immediate future," Berkley said.

One gambling lobbyist said he thought it unlikely that Kyl could get unanimous consent to bring the House bill up on the Senate floor and would be forced to try to attach it to another piece of legislation. The lobbyist added that Democrats might be reluctant to give Kyl a victory going into fall as he faces a competitive race against Democratic challenger Jim Pederson.