Dueling Bills in the Hoosier State

9 January 2003

Indiana could become only the second U.S. state to legalize Internet casinos if one member of the Legislature has his way.

For the third legislative session in a row, State Rep. Jerry Denbo (D) will introduce legislation addressing Internet gambling. In the past, Denbo sought to prohibit I-gaming, but this time he plans to put forth a simple, short piece of legislation that would create a regulatory framework for Internet casinos in the state.

Denbo's first two I-gaming bills stalled in committee. He admits the new plan will be strongly opposed, but a recent change in House leadership has him more optimistic than ever about the bill's chances. With a new Speaker, B. Patrick Bauer, in place, the outlook this year is much better.

Additionally, Denbo sits on the influential House Rules and Legislative Procedures Committee, which handles the movement of most of the important bills during the final weeks of the session.

"I really think if this bill went to the full House that it would pass and pass easily," he said.

The idea behind the bill, he said, is to get the process going, not to establish an exact way to regulate the industry.

"I will leave that up to committees of people that are a lot smarter about the issue than I am," he said. "I just don't like the idea of no regulation, and we have no control over a lot of these guys because they are offshore operators and can dodge our laws and prosecution."

One of Denbo's contemporaries, however, disagrees. On Tuesday, Sen. David Ford (R) introduced SB 71, a bill that would hold Internet services providers liable if they host online casinos or allow online casinos to target their customers. The bill passed the Senate last year, but died in the House. This year, he said, he's garnered more support.

If passed, the bill would allow county prosecutors to send a written notice to Internet service providers--such as America Online--saying that Web-based gambling is illegal in Indiana. The notice would list specific Web sites that are providing gambling opportunities and require the Internet providers to restrict their Indiana customers' access to those sites within 30 days. If the companies fail to comply, they could be charged with a Class D felony, punishable by up to three years in prison and a $10,000 fine. (Currently, illegal gambling in Indiana is a misdemeanor.) The casino operators also would face the same penalty.

The bill additionally calls for the state attorney general to maintain a list of gambling Web sites that Internet providers should block. Eventually, Ford said, Internet companies would routinely acquire new lists from the attorney general and make the appropriate changes in their software to block the sites, without an overt threat of prosecution.

''I think that 99 percent of Internet providers, like most businesses, want to be responsible and do the right thing,'' he said.

But Denbo was quick to point out that bills holding ISPs responsible for enforcement have been considered in the past on both the state and federal level and they've consistently been met with skepticism.

He also has a hard time understanding why other types of gambling are regulated to the fullest extent in the United States, but when the Internet is discussed, prohibition is usually the first answer.

"Gambling is probably the most regulated segment of government today," he said. "The controls and guidelines for river boats and other casinos are staggering. There is no reason why we can't impose a similar high standard with Internet casinos."

Ford said the intent of his bill is not to target individuals who gamble illegally.

''You really can't go after an individual in their home, nor does anybody want to do that,'' he said. ''Honestly, like so many laws, it's really a matter of saying, 'This is state policy and please observe it.' Then you hope people do.''

The Senate Economic Development and Technology Committee is scheduled to consider the bill Monday at 9 a.m.

Click here to view SB 71 as introduced.

Nobody knows where Kevin Smith came from. He simply showed up one day and started writing articles for IGN. We liked him, so we decided to keep him. We think you'll like him too. Kevin can be reached at kevin@igamingnews.com.