July 26, 2006

Outlook dims in Senate for online gambling bill

By Peter Kaplan and Thomas Ferraro

WASHINGTON (Reuters) - Prospects have dimmed for swift U.S.
Senate passage of a bill to outlaw most forms of Internet
gambling as industry trade groups and lawmakers raise
objections, congressional sources said on Wednesday.

Efforts to move a House-passed measure through the Senate
have run into opposition from lobbyists representing casino
owners and horse- and dog-racing interests in recent days. Some
Republican senators have broken ranks and placed "holds" on it,
the sources said.

"The House-passed bill is not going to pass the Senate,"
said one source who is knowledgeable about the legislation,
adding that changes must be made to win sufficient support.

The industry is a major contributor to some congressional
campaigns and sources said opposition could stir up new trouble
among senators such as Republicans Jim Bunning and Mitch
McConell of Kentucky or Democrat Harry Reid of Nevada.

The bill would prohibit most forms of Internet gambling and
make it illegal for banks and credit card companies to make
payments to online gambling sites.

The Republican-backed measure has been criticized by some
as an election-year appeal to the party's conservative base.

Supporters of a crackdown on Internet gambling say
legislation is needed to clarify that a 1961 federal law
banning interstate telephone betting also covers an array of
online gambling.

Backers of the legislation, led by Arizona Republican Sen.
Jon Kyl, have been trying to build support and resolve
differences as the Senate focuses on other legislative matters
and gets ready for a month-long break.

However, congressional aides said some Republican senators
have placed holds on the bill, and that Democratic senators may
eventually do so as well depending on how talks proceed.

The bill was not among the priorities outlined by Senate
Majority Leader Bill Frist, a Tennessee Republican, during a
session with reporters on Tuesday in which he laid out measures
he hopes to wrap up before the August vacation.

Any member of the Senate may place a secret "hold" on
legislation, which prevents it from being brought up for a vote
until concerns about the measure are resolved.

One aide said concerns had been voiced by representatives
of casinos as well as horse-racing tracks, dog tracks and
lotteries about limited exemptions in the bill.

So far in 2006, the casino and gambling industry has given
more than $6.4 million to federal candidates, according to the
nonprofit Center for Responsive Politics. That amount places it
30th among the more than 80 industries tracked by the

"There is always a chance that differences can be resolved
and the Senate could vote before the August recess, but not a
very good one at this point," one aide said.

In order to win support, Kyl may have to amend the Senate
bill and ask House lawmakers to revisit a similar amended
version, other sources said.

Supporters could take up the bill when the Senate
reconvenes in September. But it would be difficult to work out
changes in time for members of Congress to return to their
districts to campaign before the November elections.