The Inevitable Return of Jon Kyl

One of I-gaming's staunchest opponents is about to be heard from again--possibly as soon as next week.

U.S. Senator Jon Kyl, R. Ariz., last week during committee hearings for the Senate Commerce Committee, asked for a placeholder for an amendment on an appropriations bill and indicated that the change would relate to "Internet wagering." Observers in Washington are speculating that Kyl will introduce his Unlawful Internet Gambling Enforcement Act of 2005 as the amendment.

The bill, which was circulated in draft form in early 2005 but never formally introduced, would make it illegal to use credit cards, wire transfers or other "instruments of banking" to fund online gambling transactions.

Unlike previous versions, the 2005 bill did not define legal and illegal online gambling activity; nor did it contain a carve-out for online race betting, an activity that has generated hundreds of millions of dollars for states in which it is currently legal. Whether Kyl will take the same approach next time around remains to be seen.

While no one outside Kyl's staff knows what provisions the next version will include, the prevailing thought among Washington insiders is that it will include language to appease the racing industry.

The bill's language on casino gambling, and subsequently the position to be taken by the American Gaming Association, are unknown.

While this wouldn't be Kyl's first attempt at attaching an I-gaming amendment to an appropriations bill--he did so successfully in 1998 with a bill that later died in the House--it appears that he is changing his approach by going through the Commerce Committee rather than the Judiciary Committee. Such a strategy could pay off in the House, where the Commerce Committee is chaired by Rep. Frank Wolf, R-Va., perhaps gambling's biggest opponent in Washington.

Gambling law expert Tony Cabot of the law firm Lewis & Roca, said the Kyl bill's chances are as good as ever, but added that a racing carve-out would create problems among the anti-gambling factions.

Another possible point of debate is the World Trade Organization's ruling that the United States has until April, 2006 to bring itself in compliance with the organization's trade policies. (That is, it must either allow I-gaming operators licensed in Antigua and Barbuda to offer certain services to U.S citizens or adopt legislation banning all U.S. operators from offering the same services.)

But in Cabot's mind, the Kyl bill does nothing to address to WTO ruling.

"The WTO decision has been singularly ignored by everyone in Washington," Cabot said. "This bill won't rectify those problems created in the WTO decision either."

Sen. Kyl has been trying for nearly eight years to pass legislation aimed at prohibiting Internet gambling

Kyl's office has declined to comment on the pending amendment.