nline gambling is big e-commerce business. More than 5 million Americans pay debts to Internet casinos and online gambling sites using credit cards, electronic fund transfers, wire transfers, checks and money orders. Virtual casinos are already illegal in the U.S., but soon a law could be in place also making it illegal for credit card companies, banks and other financial institutions to send payments to online casinos at their customers' request.

The Senate is considering legislation to block companies from making payments to Internet gambling sites. The House passed similar legislation on October 2, 2002, and if it passes in the Senate, a bill could reach the President's desk in 2003.

Lawmakers want a law of this nature in place for many reasons, some of which include the fact that Internet gambling poses a threat to minors because it enables them to more easily mask their age and identity than they can at land-based casinos; it provides another avenue of debt and addiction for compulsive gamblers; and faceless offshore Internet casinos hosting rigged games cannot be regulated by the U.S.

The global online gambling industry is expected to bring in an estimated $6 billion in 2003, with 12 million customers around the world fueling these sales, according to Christiansen Capital Advisors and reported by The New York Times. In 1995, only 24 online casinos were in operation. Now there are nearly 1,800, and almost all are located outside the United States.

There already have been efforts to stop making payments to Internet gambling sites, led largely by New York State Attorney General Eliot Spitzer, major credit card companies MasterCard and Visa, and eBay's online payment division PayPal. All of those companies have stopped sending payments to these types of businesses.

PayPal's method of payment was accepted at more than 85% of the gaming Web sites, but when eBay acquired the company, it ended PayPal's services to these sites.

Spitzer began his anti-online gambling campaign in June 2002, when Citibank was the first to agree to block these types of transactions. Many other credit card issuers have implemented blocking mechanisms, including American Express, Providian, Bank of America, Fleet, Direct Merchants Bank, MBNA and Chase Manhattan.

Spitzer recently enjoyed another victory when 10 more banks, including USAA Federal Savings Bank and Wells Fargo Financial Bank, signed an agreement with him to block cardholders from using their credit cards for online gaming transactions.

And as a result of efforts by Spitzer and other payment companies, online gambling businesses already are shifting their marketing to other places where it is legal, such as Asia and Europe.

They also are exploring other ways for customers to make payments without going through banks, such as using e-cash, which stores electronic funds on a user's computer and transfers those funds over the Internet, and debit cards from foreign banks.

If the proposed legislation becomes law, these types of payment methods will be illegal in the U.S.

Lawmakers who have argued against the legislation believe regulation is a better solution to the problem, so funds being paid to casinos will continue to be traceable and taxable. Otherwise, black markets could emerge, which often create opportunities for money laundering by organized criminals.