[clevfan]

The case for regulation of Internet gambling
By Frank Catania
The Hill

Horse-racing fans held their collective breath this past weekend when Kentucky Derby champion Barbaro pulled up at the Preakness with a serious injury. Winning tickets and side bets were all forgotten as people focused on the tragedy at hand.

The good news is that, thanks to advances in veterinary medicine and technology, Barbaro's life may be saved.

Even as technology is used to mend Barbaro's broken bones and connect people from around the world in a shared experience like this, it is also being used for leisure activities like gambling. Whether it's betting on the Preakness or playing a game of poker, the Internet has become a major way people experience gambling entertainment.

However, members of Congress are actively debating how to limit - or even prohibit - these experiences. This week, the House Judiciary Committee is expected to mark up two bills that would make certain forms of Internet gambling and the financial transactions involved in Internet gambling illegal.

H.R. 4777, Internet Gambling Prohibition Act, would limit people's ability to use the Internet for some forms of gambling. The other measure, H.R. 4411, the Unlawful Internet Gambling Enforcement Act, would make credit-card payments and other financial transactions for Internet gambling illegal.

At a recent House Judiciary subcommittee hearing, there was widespread confusion over which activities would be banned under H.R. 4777 and which special interests had exercised their political muscle to overcome opposition to gambling to earn special treatment in the legislation. (Answer: horse racing - allowed; lotteries - allowed; fantasy sports - allowed; poker - banned; dog tracks - banned; bridge - banned; casino games - banned; bingo - banned.) However, the bill was soon approved by voice vote.

To date, the debate has focused on prohibition of Internet gambling, with little consideration of regulation. Short of completely banning the Internet, online gambling will always be available to U.S. players. And as more and more countries move toward regulation - at last count, more than 70 countries and jurisdictions regulate Internet gambling and Britain is set to pass legislation in early 2007 - the United States could be the last to cross the finish line, losing out on the economic benefits of a $15 billion industry. With regulation, U.S. players would receive added consumer protections, state governments would receive the tax revenue and job-creation benefits and off-shore companies would be brought back to the United States.

As the former director of the New Jersey Division of Gaming Enforcement, I understand that regulation is not simple, but I believe that strict regulation is the only effective means for controlling players and the environment in which they play. Regulation of land-based casinos helps prevent underage gambling and offers a way to guide problem gamblers to seek help. Regulation of Internet gambling could do the same. Furthermore, regulation allows all transactions to be tracked, audited and taxed, relieving concerns over financial impropriety, while adding much needed revenues to our public treasuries.

The bottom line is that an American who logs on to an online horse-racing site deserves the same consumer protection as someone who walks up to a window at Belmont Park, and someone who plays online poker should be treated the same as someone who bets on horse racing over the Internet. It's time Congress developed a consistent and sensible policy for Internet gambling.

Whether the gambling entertainment is online or offline, consumers deserve diligent regulators who make sure operators are honest, games are fair, winning players are paid promptly, problem gamblers are offered assistance or ultimately barred and minors are prohibited from playing.

Prohibition of Internet gambling will not provide such protections; licensure and regulation will.

Catania is a former assistant attorney general, director of the New Jersey Division of Gaming Enforcement and deputy Speaker of the New Jersey General Assembly. Josh Marshall's column will return.