Place Your Bets for a Casino Battle Royale

Seven weeks to go before the National Gambling Impact Study Commission is supposed to report to Congress, and all bets are off. The commission, which has been deliberating for two years, appears poised to recommend a controversial moratorium on gambling expansion; it also may call for more regulation of both Internet gambling and the rapidly expanding Indian casino market. But the odds of implementing these measures are long, to say the least. Four of the commission's nine members are unhappy with the moratorium, which they say would be perceived as a permanent ban on growth. And except in the case of Indian casinos (which are regulated through the Department of the Interior), any resulting regulations would have to be approved by state legislatures -- the very people the commission considered describing as "addicted to the revenue" from state-sanctioned gambling.

In addition, say some observers, the commission is looking more and more like a stablehand closing the barn door when the horse is just grazing in the yard. Even though the commission is likely to recommend a cooling-off period, analysts say the industry is already lukewarm at best. The reason: Gambling expansion has slowed in recent years. The public is losing interest, lottery ticket sales are flat for the first time in three decades, and expansion was a nonstarter in several state ballot boxes last November. Even the gambling mecca itself, Las Vegas, is trying to remake itself as a "family" destination. One area where analysts are still bullish: Indian casinos. The success of the Mohegan Sun and Foxwoods Casinos in Connecticut has Merrill Lynch calling the state "the hottest gambling market in the country." But attempts by the federal government to regulate gambling on Indian lands are likely to result in fierce opposition. In fact, you can bet on it.