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Gambling in cyberspace
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July 29, 1997: 8:43 p.m. ET
Some lawmakers want to crack down on 'Net gambling before it takes off
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NEW YORK (CNNfn) - Online gambling is just a twinkle in the Internet's eye, and at least one lawmaker wants to keep that way.
Sen. Jon Kyl, R-Ariz., wants to put a stop to Internet gambling before it grows into what many people expect to be a huge industry.
Sen. Kyl joined anchor Steve Young on CNNfn's "Digital Jam," Tuesday to take discuss the fledgling industry and a laws to curb it. The following is a partial transcript:
YOUNG: I know he said that there was something like a couple of hundred sites already on the 'Net talking about gambling operations under development. What size do you put on this nascent industry right now?
KYL: It's a multimillion dollar industry now and our experts who were testifying before our subcommittee [Monday] predicted that it will be a multibillion operation very soon. That's why we need to get to it before it mushrooms out of control.
YOUNG: Senator, how many sites do you believe actually are offering gambling on the Internet right now?
KYL: I don't know exactly how many sites, and of course, it changes daily. But from the one's that we have found, and by the way, they're very professional, they're very colorful, fast-moving, very attractive and particularly to young people we think -- and that's another reason why we need to get to this problem right now.
YOUNG: To folks who've never surfed over to some of these sites, tell us the kind of gambling that they're offering.
KYL: Well, first of all they have the look of a Las Vegas-kind of casino, lots of moving parts and lights and the typical kinds of things -- Black Jack, Craps -- you see the cherries or the lemons come up on the screen just like you would if you were betting the slots.
And, the only thing that has slowed down the growth in this activity so far is that the speed with which you can turn the card up or place the bet is still a little bit slow. It may take six or eight seconds, whereas the better wants it to be virtually instantaneous. That technology is coming very quickly and again, all of these are reasons why, if we're going to prohibit gambling on the Internet, we need to get to it right away.
YOUNG: So those gamblers want more bandwidth, they want faster action.
KYL: That's right. They want it to be just as fast as it is in the real life setting and this is one of the reasons why gambling is so addictive over the Internet. If you've got to load the family up and drive to Las Vegas, Nevada or Atlantic City, there's a bit of a time lag and trouble in doing that.
But, gambling on the Internet will become very addictive because you can simply sit down any time, day or night, log on and go to it. And there's nothing to inhibit you. It's very easy and as soon as the speed improves and they're just about there, it's going to become terribly addictive.
YOUNG: And they're already offering stakes. What kind of stakes?
KYL: I can't tell you exactly what the stakes are, but this is another one of the problems. They don't have to pay off -- even if you win. They don't have to tell you what the odds are, they can change the odds. There's no regulation, there's no enforcement, which is why the experts who testified [Monday], the Attorney General's Association and others, said you can't regulate it, you've got to ban it.
By the way, the NFL, the witness from the National Football League, said the same thing. This is not something you can regulate. You've just got to prohibit it.
YOUNG: Is there any way to know who's actually running these operations if you log on to one of these sites?
KYL: Well, there's no way for you to be sure. They have a name and they have a location, but as one of our witnesses said yesterday --you can't verify that the name is actually the name of the people really behind the site. Many of them are offshore. Another reason why it's really not possible to regulate it.
YOUNG: Yes, you mean literally offshore. I actually logged onto one yesterday that was in the Bahamas. Are they typically in the Caribbean or all over the world?
KYL: Many in the Caribbean. They are all over the world but most of the ones offshore we find, are in the Caribbean.
YOUNG: I must say that maybe states have a parochial interest here. Are states concerned that state-approved gambling, otherwise known as "the lottery" will be cut into, and is that a good reason to crack down on Internet gambling?
KYL: Well, not from my perspective. There's an entirely separate reason. Some states may have that interest but frankly the states attorneys general who have testified in favor of this legislation have a very specific and very simple objection to it. It cannot be regulated, it is criminal activity if conducted in any other form, and essentially what they're saying is --make illegal on the Internet that which is already illegal if conducted in other forms. And they've said, there's no way for the states to handle it because cyberspace knows no jurisdictional boundaries. It's got to be handled by the federal government.
YOUNG: Your proposed law calls for fines and for imprisonment. Some people might think that's a little draconian.
KYL: Well, that's not for the casual bettor. There's nothing in our bill that says that you and I can't get on the Internet and make a casual bet with each other. It's only when you place a bet with one of these professional online gambling outfits that you would be subject to any kind of a fine, and that's not going to be easily enforceable, obviously.
YOUNG: I was going to ask that very question. How would you enforce this?
KYL: Well, it's not easy to enforce. It's meant to be an inhibition to demonstrate that that conduct is deemed illegal, but the real enforcement is in cutting off the website by getting the service provider to pull the plug, in effect. After a court order is obtained indicating that the activity is illegal.
YOUNG: Senator, quick question. To the best of my knowledge, you had no witnesses [Monday] advocating gambling. Were they invited and didn't attend, or were they not invited?
KYL: Well, we had, for example, Senator Richard Bryan, D-Nev., is from a state that has gambling -- regulated gambling. We also had minority witnesses. One of the witnesses was a legal expert into this area. It is correct that we did not have a representative of the online gambling industry present. They were invited to submit testimony, make any comments that they want and they're welcome to do so.
YOUNG: And as you know, they're now inviting people to bet online about whether a bill will go through.
KYL: That's right. I wouldn't consider the odds too bad though if, of course, that's not going to be illegal once our bill goes through.
But, I want to just make this point again. Nobody is preventing people from having a friendly bet. We're talking about, prohibiting the kind of conduct which can take a lot of money from people, very quickly, without any protection on their part. A kid can run up a credit card bill, in just a matter of a couple of hours, he can probably wipe out a family, and there's nothing that can be done about it today. We want to put a stop to that. 
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United States Senate
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