Kyl Bill Meets Death Again

U.S. Sen. Jon. Kyl's, R-Ariz., latest effort to prohibit Internet gambling in the United States has failed.

Kyl was trying to get his Unlawful Internet Gambling Enforcement Act of 2005 attached to an appropriations bill (something he succeeded in doing in 1998), but an unidentified senator this morning raised a point of order on the basis that the measure should go through the Banking and Finance committee rather than be included in appropriations legislation. Urged by his colleagues, Kyl reluctantly agreed to the point of order, essentially killing his most recent effort to get his bill passed.

More than eight years into his bid to pass an online gambling prohibition bill, Kyl launched his latest campaign last week by requesting a placeholder for the appropriations bill. While he acknowledged that the forthcoming amendment was related to online gambling, he held the specifics close to his chest.

Kyl's legislation would require banks and credit card companies to block payments to online Internet gambling sites. Some banking institutions, he said, are already voluntarily blocking such transactions.

Sen. Barbara Mikulski, D-Md., acknowledged that it was a Democrat who filed objected to including the amendment, but said she did not know specifically who it was. The mystery Democrat did not respond to Kyl's request to come forward so that the concerns could be addressed.

Perhaps the biggest momentum killer was a letter on behalf of the American Bankers Association, America's Community Bankers and Visa--breaking a silence on the issue held by the banking industry since 2001.

The letter, which was sent to Senate leadership and to Kyl, urged the Senate to vote against the amendment on the grounds that the Senate Banking committee hadn't been given the opportunity to review the legislation and give input on it.

The three banking institutions also said they are willing to work with Kyl to get some form of regulation for the Internet gambling industry passed, but they are concerned that many problems could arise with the current bill.

The Senate and the House of Representatives have individually passed similar bills in previous sessions, but haven't agreement on a single, identical piece of legislation.

The U.S. Justice Department maintains that laws prohibit interstate gambling apply to the Internet and Americans, in the absence of U.S.-licensed operators, have turned to offshore gambling Internet sites as an alternative.

Kyl has already vowed to continue his efforts.

"We will proceed with this," Kyl said during today's Senate hearing." It will become law at some point at some time. There should be no reason why we can't move forward on this."

Despite Kyl's determination, however, Washington insiders feel it will be at least a few months before further action is taken on his bill.

With the letter from the banking industry in the public domain, the Kyl bill will almost surely have to come out of the Senate Banking Committee, and sources say the issue isn't likely to be a high priority for the committee.

Click here to view a copy of the banking institutions' letter to the Senate.