US Prohibition Effort Fails Again in 2000

18 December 2000
All efforts to federally ban online gaming in the United States, for now, are dead. The 106th Congress adjourned Friday without any of the bills that would have targeted the industry being passed.

Not only did no bill get passed this year, any future bill will have to be reintroduced in Congress.

The bill with the best chance for passage in 2000, Rep. Bob Goodlatte’s Internet Gambling Prohibition Act, failed to get enough votes to pass earlier this year. Reports out of Washington indicated that Goodlatte and Sen. Jon Kyl, whose Senate companion bill passed in November 1999, were trying to get the bill attached to an appropriations bill, however, their time ran out before such a motion could be taken into consideration.

Along with the Goodlatte/Kyl bill failing in the House, two additional House measures failed to gain enough support. H.R. 5020 would have amended the Wire Act to prohibit Internet gambling without exemptions. Unlike the Kyl bill, H.R. 5020 wouldn't have held internet service providers liable. A third bill, the Internet Gambling Funding Prohibition Act, was introduced in May, but failed to make it out of committee after it had been amended. Eventually, one of the bill's sponsors, Rep. John LaFalce, pulled his support of the bill.

Many speculate that 2000 was the year to get it done for Goodlatte and Kyl, and that the effort’s support will continue to dwindle in 2001. The American Gaming Association (AGA), should it back out of its stance of favoring prohibition, could get the ball rolling down the regulatory side of the hill. A recent AGA meeting last week in Las Vegas brought about speculation that the association may withdraw its support of the ban.

Fueling rumors of a potential shift in the AGA’s position is the fact that Nevada casinos are recognizing the potential of the Internet as a vehicle to bring in more players. In particular, Harrah’s and MGM Mirage in recent months announced the launching of play-for-free casinos at their company websites. The chairmen of both of these companies, Philip Satre and Terry Lanni respectively, sit on the AGA’s board of directors.

While the future of the prohibition effort is unclear, the states of New Jersey and Nevada could soon find themselves in a footrace to legalize Internet gaming. Regulators and legislators for the two states held meetings this year in an effort to learn more about the regulatory and security sides of Net betting. Since the two meetings, congressmen from both states have indicated that they are preparing to introduce regulatory legislation in coming months.

New Jersey may soon see a bill by Assemblyman Tony Impreveduto that will allow land-based casinos to offer online gaming services. Meanwhile Nevada Assemblywoman Merle Berman is working on a bill that would legalize and regulate Internet gambling in her state.

Speculation is that the state which acts first will reap huge financial dividends.

As for the chances of a federal prohibition bill passing, Senator Kyl has said on a few occasions that the longer they go without getting it done, the harder it’s going to get.

Senator Richard Bryan, D-Nev., one of the Kyl bill’s biggest supporters, agrees. "I believe next year (2001) Internet gambling will have reached critical mass,” said Bryan back in November, “and there is very little likelihood to get prohibition."