NCPA - National Center for Policy Analysis

Regulators Target Online Gambling

April 17, 2000

Critics charge that the morals police are stepping up their efforts to rein in gambling over the Internet. But any federal actions raise serious legal questions -- since the law in this area is murky.

The 1961 Wire Act makes it illegal to use phone lines for sports bets. But it is silent on other forms of gambling, and new technologies -- such as satellite transmissions and radio waves -- are replacing phone lines.

  • More than 700 gambling sites -- offering everything from virtual poker to betting on college football games -- already exist on the Web.
  • Fifty countries now authorize Internet gambling and U.S. companies are proposing their own plans to offer the same.
  • But just last month, prosecutors used the 39-year-old Wire Act to win a conviction against a U.S. resident who offered sports betting from an Antigua-based Web site -- the first such conviction ever obtained.
  • Officials such as the chairman of the Nevada Gaming Commission predict that online wagering is here to stay and say we should understand that.

Yet a bill has been introduced in Congress to curb the practice. The legislation would make it illegal to take bets online but doesn't list penalties for individual gamblers. In addition, both Senate and House bills carve out exemptions for horse racing, dog racing and jai alai.

Proponents of regulation largely base their arguments on the government's responsibility to protect participants from themselves.

Source: Fredreka Schouten (Gannett News Service), "Regulators Begin Placing Bets on How to Limit Growing Online Gambling," USA Today, April 17, 2000.


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