Gambler's Web.

• Author: Bell, Tom W.
• Position: Online betting can't be stopped - and why Washington shouldn't bother trying

Why online betting can't be stopped - and why Washington shouldn't bother trying.

When Angel - mother, wife, and self-described "patriotic Italian-American" - feels like unwinding, she heads to the bingo parlor. But Angel (not her real name) avoids the local church's game: She doesn't like the smoke, and besides, "The crowd can get pretty vicious at Immaculate Mary's when the callers are inadequate."

Nor does she fly to Atlantic City or Las Vegas. "I'm not against that personally," she explains on her Web site. "The coffee boys in Caesar's are very buff. They can serve me in their little togas anytime. But road trips don't go over real well when you're a Mommy. You sorta hafta stay home and take care of things, capice?"

For Angel, the nearest bingo parlor waits on just the other side of an Internet connection. Like an increasing number of Americans, she loves the convenience and fun of online gaming. "If I choose to be a chooch and spend my money here unwisely, it's my choice," she writes. But if a potent coalition of lobbyists and politicians gets its way, neither Angel nor any other American will have the legal right to make that choice.

Though it defies exact measurement, all studies of the Internet gambling market agree that it's growing explosively. It more than doubled from 1997 to 1998, according a widely cited report by economist Sebastian Sinclair, with the number of gamblers increasing from 6.9 million to 14.5 million and revenue jumping from $300 million to $651 million. By 2001, Sinclair predicts, 43 million Internet gamblers will generate $2.3 billion in revenue. Estimates of the number of gaming Web sites vary from 250 to 1,000, ranging from online casinos to sports betting sites to lotteries, tournaments, bingo games, and sweepstakes.

Not surprisingly, the old boys' network of licensed, land-based gambling businesses does not welcome competition from this worldwide digital network. They aren't losing much money to it yet. But they will soon, and they know it.

So do their political patrons. Politicians relish the taxes that pour in from tightly regulated casinos, parimutuel tracks, and similar operations - some $3.7 billion in 1997. Net gambling, by contrast, pays virtually no taxes.

What's more, the government itself owns a share of the gambling market, with 37 states and the District of Columbia sponsoring lotteries. Those lottos earned $14.9 billion in 1997, in part by offering the worst odds of any common form of gambling. They consequently have the most to fear from online competition.

The gaming industry helps politicians fight off another sort of competitor: candidates who campaign against them. The industry's federal campaign contributions increased 447 percent during the 1990s. Its soft money and PAC contributions hit nearly $6.3 million in the 1997-98 election cycle, more than double the $2.6 million it gave in the previous nonpresidential cycle. It spent even more at the state level, the locus of most U.S. gambling policy, giving more than $100 million in donations and lobbying fees to state legislators from 1992 to 1996.

Unsurprisingly, some politicians want to restrict Internet gambling. Sen. Jon Kyl (R-Ariz.) claims that online gaming lets you "click the mouse and bet the house." His response - the Internet Gambling Prohibition Act of 1999, whose penalties include fines of up to $20,000 and four years in prison - would send a different message: "Use e-mail and go to jail."

By their plain language, several federal statutes already outlaw Internet gambling. The Federal Interstate Wire Act prohibits using interstate communications to run a gambling business. The Organized Crime Control Act of 1970 makes it a federal crime to engage in a gambling business illegal under state law. The federal Travel Act, as read broadly by the courts, criminalizes all interstate communications meant to facilitate the distribution of gambling proceeds. If Net gambling is unhindered nonetheless, this suggests not that the police lack the authority to stop it but that they lack...