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The Internet offers cheap and easy access to a vari-

ety of gambling services, bringing competition to an

industry that has long operated under highly restrictive

licensing practices.  Thanks to the Internet, gamblers no

longer have to fly to Las Vegas to play the slots, drive

to the nearest authorized track to play the horses, or

even walk to the corner store to play the state lotto.

Consumers can now play those and other games at home via

the many Internet sites--well over 100 and growing--that

offer gambling services.5

Americans have already shown that they support the

nascent Internet gambling industry.  Analysts calculate

that of the $1 billion in revenues that Internet gambling

generated in 1997, about $600 million came from the United

States.  Online casinos will have worldwide revenues of

some $7.9 billion by the year 2001, $3.5 billion of it

coming from U.S. consumers.6

Because the Internet offers bettors instant access to

overseas gambling sites and relative safety from prosecu-

tion, online gambling will grow regardless of what lawmakers

and prudes want.  Futility, however, seldom bars bad public

policy.  So it remains quite uncertain how quickly con-

sumers will enjoy legal Internet access to new gaming services.

The Prohibitionist Lobby

A variety of political forces pushes for a ban on

Internet gambling.  Left-wing activists have shown no

interest in defending consumers' rights to assemble and

speak on the Internet about gambling.  And conservatives,

while nominally in favor of free markets, make notable

exceptions for activities that, like gambling, smack too

much of the pursuit of happiness.  Since neither Democrats

nor Republicans will defend Internet gambling as a matter

of principle, lobbyists have rushed into the vacuum.

A number of powerful lobbies have financial reasons

to favor a ban on Internet gambling.  The established,

offline gambling industry has huge sunk and overhead costs

that nimble new competitors might prevent it from recover-

ing.  The incumbent industry also brings very deep pockets

to the political process; it contributed nearly $7 million

to candidates in the 1995-96 elections.7   Lobbyists for the

offline gambling industry do not openly demand the prohi-

bition of Internet gambling.  They have, however, objected

that Internet gambling unfairly escapes heavy regulation8

and have already demonstrated their power to shape legis-

lation banning Internet competition.9