With Congress currently in the process of creating legislation designed to combat illegal Internet gambling, the banking industry has joined the effort by enacting measures to thwart the use of credit cards in illegal Internet wagering.

Late last month, Citibank, the nation's largest credit card issuer, announced it would work with the New York state attorney general to block online gambling transactions with its credit cards.

Citibank is not the only financial institution that has taken action against Internet gambling. Other banks that have taken steps similar to Citibank include Bank of America, Fleet, Direct Merchants Bank, MBNA and Chase Manhattan Bank.

Internet gambling, a $4 billion-per-year industry, often acts as a catalyst for steep credit card debts and habitual gambling behavior. Since credit cards are the primary means for placing bets, gamblers have little comprehension of the amount or extent of their wagers. Additionally, online gambling is readily accessible by minors.

Citibank intends to block credit-card transactions that are identified as online gambling, effectively cutting off those offshore Internet sites' primary line of credit. Action by financial institutions could prove to be the most effective way to curb the use of illegal gambling sites because the sites often are operated offshore, outside the enforcement sphere of state authorities.

Citibank's decision to stop illegal online transactions could have a debilitating impact on the offshore Internet gambling industry. As of January 2002, Citibank had 33 million active cardholders. Citibank's cardholders have more than $99.5 billion in credit, and they account for more than 12 percent of the nation's credit card market. In addition to blocking transactions for illegal gambling, Citibank also has agreed to donate $100,000 to organizations that battle gambling addictions and $400,000 to nonprofit organizations that counsel families that have been affected by compulsive gambling.

Currently, two bills have been proposed to combat Internet gambling. The Combating Illegal Gambling Reform and Modernization Act (HR. 3215) sponsored by Rep. Bob Goodlatte, R-Virginia, would prohibit Internet gambling companies from accepting wagers that cross state lines. HR. 3215 recently has been approved by the House Judiciary Committee. The Unlawful Internet Gambling Funding Prohibition Act (HR. 556) sponsored by Rep. James Leach, R-Iowa, intends to prevent the use of certain bank instruments for unlawful Internet gambling. HR. 556 has been approved by the Committee on Financial Services. Both HR. 3215 and HR. 556 currently are awaiting a vote by the House.

The NCAA has vigorously supported both bills.