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Kyl Bill – Internet Gambling Prohibition Act
In 1998, Arizona Senator Jon Kyl tried to shutdown the internet gambling industry. He was motivated by the fear of the states losing gambling revenues and wanted to stamp out gambling competition.
Kyl introduced an amendment to a $33.3 billion spending bill. The amendment required Internet-service providers to ‘pull the plug’ on online gambling sites.
Kyl said: “A ban would likely be enforced by law enforcement identifying a Web site that provides illegal gambling and seeking a court order enjoining the activity.”
During two days of debate on the Senate floor, the gambling amendment’s supporters contended a ban was needed.
They argued that there was no way to regulate virtual casinos. Unscrupulous operators would be free to rig the games and cheat customers. They could even accept bets from children who managed to get their hands on their parents’ credit cards. States regulate gambling within their boundaries. However, they have no control over online gambling activity that originates elsewhere.
Lock them up!
Under the provision, individual gamblers could be imprisoned for three months and fined $500. Those running gambling sites, meanwhile, could be imprisoned for four years and fined either $20,000 or three times the value of bets accepted.
The Justice Department estimated that $600 million was bet illegally on sports alone, over the Internet last year, a tenfold increase compared to 1996.
However, the department also expressed concern about Mr. Kyl’s bill, saying: it opposes prosecuting bettors and questions the practicality of trying to prosecute foreign-based businesses.
Nevertheless, in July 1998, the bill passed the senate with senators voting 90 to 10 to ban all forms of gambling on the internet.
Done and Dusted?
So, that was that then? Ah no, not exactly. The bill still needed to pass Congress…
In July, 2000, when the Kyl Bill reached Congress, lawmakers voted 245-159 in favour of the measure…
Surely, it passed?
But no! It fell short of the two-thirds majority needed for approval, according to the special floor rules!
The main points of opposition came from industry groups who argued for regulation rather than prohibition, as well as from lawmakers concerned about the challenges of enforcing a ban on internet activities.
Another point of contention was how to implement such a ban. Banks and internet service providers were wary of the enforcement responsibilities that the bill would have placed on them; not least because of the difficulty in monitoring and blocking online transactions and internet access.
Some versions of the Kyl Bill included exemptions for certain types of online betting, such as horse racing and lotteries; this further complicated its passage.
Further efforts to shutdown internet gambling would target at the financial side of the industry.
The next plan would be to shutdown the money streams to the operators.
