Bill to ban internet gambling passes House, PartyGaming stock hit hard

A US House of Representatives subcommittee on Wednesday approved a bill that would ban Internet gambling, estimated to be a $12 billion (6.5 billion pound) industry.  Previous attempts to pass such bills have encountered obstacles over the past few years and most experts believe the same will happen again. The bill also interferes with a decision ruled by the World Trade Organization in favor of the tiny Caribbean nation of Antigua that claimed US efforts to curb internet gambling have harmed their own lucrative online gaming industry.   The legislation would update and expand an existing federal law to cover all forms of interstate gambling within the United States, and would bar a gambling business from accepting payment in the form of credit cards, checks, wire and Internet transfers. It would also prohibit gambling on an estimated 2,300 Internet gambling sites. Shares of some British-based gaming companies fell on news that the bill had progressed another step. PartyGaming Plc (PRTY.L: Quote, Profile, Research) and 888 Holdings (888.L: Quote, Profile, Research) tumbled about 5 percent each on the London Stock Exchange. The bill was approved on a voice vote by the House Judiciary subcommittee on crime. It will go to the full committee for consideration. However, it remains unclear whether the legislation will reach floor votes in the House and Senate. Congress has a relatively short schedule this year because of the November congressional elections. "Virtual betting parlours have attempted to avoid the application of United States law by locating themselves offshore and out of our jurisdictional reach," said Rep. Bob Goodlatte, a Virginia Republican who wrote the bill. The offshore companies use Internet sites that are "unlicensed, untaxed and unregulated," he said. Under US law, interstate gambling over telephone wires is illegal and other gambling is banned unless regulated by the states.