By Andrew Beyer

Saturday, July 25, 1998; Page E01

An adult sits at his personal computer, accesses the Internet and engages in an on-line activity that hurts nobody. But the government disapproves of what he is doing and charges him with a crime that carries a fine and a prison sentence.

This may sound like a human-rights horror story. But the scenario could happen in America, if a Senate measure that makes betting on the Internet a criminal offense becomes law.

The Internet Gambling Prohibition Act, championed by Sen. Jon Kyl (R-Ariz.), was offered as an amendment to a large appropriations bill. The bill, which also includes new efforts to control obscenity in cyberspace, is "the most serious effort to date to regulate the Internet," said Robert Weich, legal counsel to the American Civil Liberties Union. Although this is an issue with important ramifications, it provoked little controversy in the Senate, and the Kyl amendment passed by a margin of 90 to 10. Few lawmakers want to be seen as pro-gambling, and few want to oppose anything that is wrapped in save-the-children rhetoric.

Because the House has already passed its version of the appropriations bill without a gambling amendment, the final decision on the Internet gambling issue will be made in a House-Senate conference committee. It is unlikely that many lawmakers will speak up for gambling there, too.

Given the anti-gambling sentiment on Capitol Hill, leaders of the horse racing industry consider themselves lucky that they weren't damaged too much by the final version of the Kyl bill. The original draft of the bill would have devastated the sport, but the bill passed Thursday carves out some important exemptions for parimutuel wagering and allows other gray areas in existing law to remain gray.

The principal federal law that governs interstate gambling, the Wire Act of 1961, has long been outdated, and it left unclear the legality of such modern innovations as "cybercasinos" as well as much of the simulcast and telephone betting that has become standard at racetracks.

Kyl's bill is explicit: "It shall be unlawful for a person knowingly to use the Internet or any other interactive computer service to place, receive or otherwise make a bet or wager with any person." It is intended to target the rapidly growing on-line gambling industry: bookmakers who accept wagers on sporting events and operations that offer casino-type games.

It seems a bit hypocritical for political leaders to get moralistic about gambling when the biggest, most intrusive gambling operators are the state governments that offer lotteries. And the current efforts to restrict betting on the Internet seem inconsistent, too. If a resident of Nevada -- a state where casino gambling is legal -- wants to bet a hand of "virtual blackjack" on his computer instead of doing so at Caesars Palace, what's wrong with that? Even the Justice Department was dubious about the prohibition. When asked for an opinion on the Kyl bill, L. Anthony Sutin, acting assistant attorney general, wrote: "It may be . . . hard to explain why conduct that is not a federal crime in the physical world suddenly becomes subject to federal criminal sanction when committed in cyberspace."

Why? Because we've got to protect children, that's why. Kyl and the other backers of this bill repeatedly evoke the image of children getting addicted to gambling via computer. "Children can access Internet gambling sites on the family computer, wager with Mom's credit card, click the mouse and bet the house," Kyl declared. Of course, if youths borrow the family credit card they can find plenty of other ways to get into trouble, but the possibility of children's misbehavior is supposed to be grounds for controlling the behavior of responsible adults.

Of course, trying to control what happens on the Internet is an exercise in futility. The U.S. will not be able to police bookmakers in Australia or cybercasinos in Costa Rica (though proponents of the bill suggest that Internet service providers could be forced to block access to all illegal gambling sites.) Nor will the U.S. be able to jail foreigners who run on-line gambling operations. But it can punish bettors. Under the terms of the Kyl bill, the adult who sits at his personal computer, accesses the Internet and places a bet is subject to a three-month prison sentence and a $500 fine.

Kyl hadn't been thinking about the horse racing industry when he drafted his bill, but its original language was so broad that it seemed to ban interstate simulcasting as well as the transmission of basic wagering information by computer. The American Horse Council and leaders of the industry made their case to Kyl and his staff and did an effective job, so that the final version carves out plenty of exceptions for the parimutuel business and leaves other issues ambiguous. "Given the circumstances," said Jay Hickey, president of the American Horse Council, "I think racing's future options have been protected as well as possible."

It will be illegal for a horseplayer in one state to send a wager via computer to a racetrack in another state. But the legislation does permit "a closed-loop subscribed-based service that is wholly Interstate," which seems to open plenty of possibilities. (A Marylander could bet a race at Hollywood Park if his wager is initially transmitted to Laurel Park's computer.) The Kyl bill does not address the practice of some off-track betting operators to accept telephone-wagering accounts from people in states where telephone betting is not legal. So racing fans should not be affected too much by this legislation -- unless the Gambling Police bust down the door to see if they're making any illicit computer wagers.