A Quick Glance at Kyl '99

23 March 1999

The subcommittee hearing on the Kyl bill is being held today. IGN publisher Sue Schneider will be attending the hearing along with other representatives from the Interactive Gaming Council. They will be submitting written testimony but are not allowed to present verbal testimony. So far, the only witness list released has the same old stand-bys....two Attorneys General, and reps from the NCAA and the NFL. We got a hold of a draft of the bill.

We are doing a full analysis of the legislation, and as such, these points are subject to revision and re-interpretation. But some of the more key elements include:

(1) The "casual bettor" provision has been removed. Under Kyl's legislation, the placement of a bet via the internet would NOT be a federal crime.

(2) Exceptions, and lots of 'em. The prohibition would NOT apply to:
  • intrastate dial-up or password protected networks (a.k.a. a "closed-loop subscriber based service";
  • fantasy sports;
  • common pooling for parimutuel betting as long as it is legal in the states or foreign countries where the betting and racing are taking place;
  • parimutuel totes;
  • news reporting, analyses, odds, results, schedules, or categories of wagering;
  • posting of educational information on how to gamble;
  • State (but not tribal) lotteries so long as the purchases are either intrastate or are between compacted states (i.e., powerball) and made in facilities open to the general public; and
  • "any otherwise lawful bet or wager that is placed on live horse races" if authorized under federal and state law and governed by the Interstate Horse Racing Act.

(3) No proxy wagering is permitted.

(4) The bill still contains injunction provisions so that law enforcement can close down web sites.

(5) Penalties for those illegally operating a gambling business are: fines not more than $20,000 or the value of the bet, 4 years in prison, or both.

We'll update you to anything pertinent on today's meeting.