Internet ban piggybacks its way to the White House

In a surprise move, the US Congress voted to approve a ban on many forms of online gambling, passing the legislation attached to a major port security bill. News of the development triggered a major international reaction as investors fled the online gaming sector.

The legislation, buried inside the Safe Port Act, makes it illegal for banks or credit card companies to process transactions involving illegal online casinos, theoretically starving impacted businesses of the revenues they need to continue operations.

President Bush is expected to the bill into law at some point in the next few weeks.

The market reaction was quick in coming. The Guardian reports "carnage" in the online gaming sector today as investors are hurrying to withdraw their money from companies which do substantial business in the North American market.

The Senate vote surprised many Washington observers, who had expected another postponement in what has been a long and drawn out process.

Arizona Republican Jon Kyl, who co-authored the bill was in a jubilant mood after the legislation passed Saturday. Kyl and fellow Republicans have portrayed the vote as necessary to protect children who might otherwise be victimized over the Internet by unscrupulous web site operators. "If Congress had not acted, gamblers would soon be able to place bets not just from home computers, but from their cell phones while they drive home from work or their Blackberries as they wait in line at the movies," said Kyl.