States legalizing online gambling?

Undeterred by murky federal law and emboldened by a trade ruling, at least three states are edging toward legalizing online gambling, and the United Kingdom is on the verge of permitting its land-based casinos to take bets online from U.S. citizens.

Those are the latest assaults on the federal Wire Act of 1961, which bans use of telephones to place sports bets.

U.S. lawmakers have struggled for a decade to update the law, hoping to restrain the fast-growing, $10 billion-a-year Internet gambling industry.

Legal experts say the act is narrow and hard to enforce, and that it does not specifically ban casino games.

The vague law has prompted online gaming overtures from: States Lawmakers say they are confident proposed legislation will not violate federal law, and they are willing to defend themselves in court.

This is a legitimate revenue maker," says Republican North Dakota state Rep. Jim Kasper of Fargo.

He introduced legislation that would allow Internet poker sites to operate inside the state.

The state attorney general's office, which would regulate sites, last week received a letter from the Justice Department reiterating the federal ban on all Internet gambling.

North Dakota Attorney General Wayne Stenehjem has forwarded the letter to the state Senate Judiciary Committee, which is reviewing the bills.

Illinois' legislature is considering a bill to allow the sale of lottery tickets online to state residents 18 and older.

A move by such a key trading partner could undercut efforts by U.S. officials to snuff Internet gambling, says Joseph Kelly, a Buffalo State College professor who researches online gambling.

All this comes against the backdrop of a closely watched World Trade Organization gaming decision.

The United States is appealing a WTO ruling that it violates international trade rules by allowing credit cards to be used for domestic gambling but not online bets.