The move to ban online gambling in the U.S. last week took a step forward as the Senate Judiciary Committee in a close vote passed Sen. Jon Kyl's Internet Gambling Prohibition Act.

With just one vote opposing the measure, the bill emerged from the committee even tougher than before with new definitions and clarifications that increase penalties for online gamblers and foreclosed the possibility that the states could allow gambling online.

Lawmakers declined to propose one of nearly a dozen possible amendments drawn up by the opposition. Instead, legislators on both sides concentrated on how best to close loopholes in the law. Senators Jeff Sessions, R-Ala., and Joseph Biden, D-Del., convinced committee members to remove a provision that would have left states free to permit online gambling within their borders as well as with other states that allowed Internet gambling.

"It's a limited prohibition now," Biden told committee members. "But I don't want to promote anything that allows for that possibility."

Kyl, R-Ariz., who earlier had said that the bill "will return the control of gambling to the citizens of each state," said his bill underscored current law that allows Americans to bet on horse races and other sporting events by wire when explicitly permitted by state authorities. "We outlaw Internet gambling. If states want to make it legal intrastate, they may do that," Kyl said.

Even so, Biden countered, since casino gambling is never legal by telephone or other wired communications, it should not be legal over the Internet.

However, Diane Feinstein, a bill co-sponsor whose home-state race tracks are suffering a long-term downturn in attendance, said the amendment threatened her constituency. Thoroughbred horse racing in California, she said, "is a $3 billion industry in California - everyone knows they have trouble." Feinstein was alone in opposing the bill as passed. Feinstein is sympathetic to moves that would allow online horse betting within state borders.

The committee's vote dashed hopes that online companies in the U.S. might soon benefit from a business that some studies have predicted will reach $10 billion annually by 2000. Though in their infancy now, online gambling houses operating offshore have promoted the idea that regulation of legalized Internet gambling in the U.S. makes more sense than unregulated sites offshore.

Lobbyists from America Online Inc. (www.aol.com) and Americans for Tax Reform, the Interactive Services Association, the United States Internet Council and a host of cyber-rights groups fought the bill, saying it would turn Internet service providers (ISPs) into surrogate police forces.

Under terms of the bill, ISPs would have to shut down or block access to any Internet gambling site anywhere in the world once told to do so by court order.