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Next: Federal Department of Internet Gambling?

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Paul Bedard,Washington Secrets,Gambling,Lindsey Graham,Peter King,Justice Department,George Soros,Sheldon Adelson

A war over online gambling is about to spill out in Congress as opponents move to restore a long-standing Internet gambling ban and block Uncle Sam from creating a sprawling new federal department to police the web.

Rep. Jason Chaffetz, R-Utah, and Sen. Lindsey Graham, R-S.C., plan to introduce legislation next week to challenge two bills introduced earlier this session that would either create an “Office of Internet Poker Oversight” in the Commerce Department or a broader “Office of Internet Gambling Oversight” in Treasury.

Those bills, also sponsored by Republicans, were inspired by states eager to cash in on gambling and the Justice Department’s abrupt December 2011 move to re-interpret the 1961 Interstate Wire Act that effectively banned Internet gambling.

Without informing Congress beforehand, Justice reinterpreted the law to outlaw only sports gambling, opening the door for states to legalize online gambling and lottery games.

In addition to dividing Republicans, the legislation has split the casino community. Backing online betting is Democratic donor and casino investor George Soros. The American Gaming Association also hired former Obama campaign manager Jim Messina to help on the issue.

GOP donor and casino owner Sheldon Adelson is fighting it, concerned that online wagering will take jobs from traditional betting parlors, hurt small casinos not in Las Vegas and Atlantic City, and be harmful to some. He has even created a coalition to kill it, The Coalition to Stop Internet Gambling.

Other critics, like Ken Blackwell, a prominent legal and family advocate, noted that casinos are already heavily regulated and that legalizing online betting would bring those rules to the Internet. That, he warned, would “create a brand new form of government internet content cops and destroy the sort of openness that’s on the web.”

In addition, a legislative critic of the gambling legislation said that federal officials would have to track consumer online spending in order to police who is allowed to bet.

And some fear that online gambling will be used for money-laundering purposes.

New York Rep. Peter King’s pro-betting bill would create a federal set of controls and fight underage and compulsive gambling. His measure would create the "Office of Internet Gambling Oversight" in the Treasury Department.

The bill from Texas Republican Rep. Joe Barton focuses on poker and would creating a new regulatory office in Commerce called the “Office of Internet Poker Oversight.”

Paul Bedard, the Washington Examiner's "Washington Secrets" columnist, can be contacted at pbedard@washingtonexaminer.com.