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Tony Batt

Senator Kyl Expects Gambling Legislation to Pass

26 September 2003

WASHINGTON, DC -- Despite opposition of the mainstream casino industry, a Senate bill to restrict Internet gambling is likely to pass Congress this year, said the senator who introduced the legislation.

Sen. Jon Kyl, R-Ariz., said Thursday he is willing to talk to gambling lobbyists but pointedly noted that the industry's support is not essential to his bill's passage.

"One way or another, we're going to get a bill," Kyl said. "I hope (the casinos) can see their way clear to help us out."

Unlike mainstream casinos, the Indian gambling industry generally supports Kyl's bill, which passed the Senate Banking Committee by a 19-0 vote on July 31. The Kyl bill would allow tribal reservations to maintain technological links for bingo and other forms of gambling.

But the bill also would prevent states from legalizing online wagering within their borders. This restriction would violate states' rights, said Frank Fahrenkopf, president of the American Gaming Association.

"This can easily be fixed by including language which would say gambling must be legal in states where the (Internet) gambling transmission is coming from," Fahrenkopf said.

So far, no state has legalized Internet gambling. But online wagering has mushroomed from $445 million in bets six years ago to projected wagers of $4.2 billion this year on more than 1,800 offshore Web sites.

Fahrenkopf said states, not the federal government, should decide if they want to legalize Internet gambling.

States retain that option in an Internet gambling bill that the House passed 319-104 on June 10. Both the House bill and the Senate bill would prevent the use of credit cards, checks and electronic fund transfers for online wagering.

Fahrenkopf said the casino industry could support an earlier version of the Kyl bill, which mirrored the legislation passed by the House. But after the Department of Justice complained that the House bill would expand Internet gambling, the Senate Banking Committee changed Kyl's bill to prohibit states from legalizing online wagering.

Fahrenkopf said the Justice Department misread the House bill and overreacted.

After meeting with Kyl on June 23, Fahrenkopf sent a letter to the senator on Sept. 9 laying out the industry's objections to the Senate bill. The primary objection is the absence of a provision in the House bill that would preserve a state's option to legalize Internet gambling.

Fahrenkopf said he hopes to follow up with a meeting next week with Kyl's staff.

"I'm not optimistic, but I'm not pessimistic," Fahrenkopf said. "If you go back and look at the original bill, we would not oppose that legislation."

But Kyl acknowledged that if he gives the casinos what they want, he could lose the support of tribal gaming interests.

"It's a problem, and frankly, I thought that we were working with the casinos and then it appears that maybe they were not willing to work with us, " Kyl said.

"So you know, it may be necessary to choose (between tribal gambling interests and mainstream casinos)."