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Online Gambling Could See Better Luck

7/6/09 - NPR Marketplace - View Source

A federal law passed in 2006 was supposed to put online gambling halls out of business, but one gaming group is challenging the law in court. Joel Rose explores where Congress stands on the issue.

Bill Radke: If you are one of those people who has quit betting on stocks, but you're looking for some other kind of gambling action, you might be interested in a federal court hearing this week. A U.S appeals courts will hear a challenge to a federal law passed in 2006 that was supposed to put online gambling halls out of business. Reporter Joel Rose has our story.

Joel Rose: Congress didn't exactly make online poker illegal. Most gambling sites are operated off-shore anyway, effectively outside the reach of the Justice Department. But Congress did make it illegal for credit card companies to pay out winnings.

Joe Brennan, Jr.: So they get the effect without having to go the route of making Internet gambling expressly illegal.

And that bothers Joe Brennan, Jr., chairman of the Interactive Media and Gaming Association, which is challenging the law in court. Brennan says Congress tried to carve out exceptions for legal wagering on horses and state lotteries.

Brennan: The difficulty comes for the processors, the banks and credit card companies. When they're confronted with one of these transactions, it's nearly impossible for them to tell whether the transaction is down for a "lawful" Internet gambling transaction or if it's bound for an "unlawful" Internet gambling transaction.

Banks and credit card companies are appealing to Congress to rewrite the law. House Financial Services Committee chairman Barney Frank wants legislation that would expressly legalize, regulate and tax online gambling. But so far, no dice.

I'm Joel Rose for Marketplace.

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