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LAS VEGAS — Congressional inaction on Internet gambling is handcuffing the casino industry and favoring shady corners of international commerce, according to gambling industry analysts and attorneys. 

“When you force legitimate businesses to the sidelines, it opens the world to people who operate in gray or black areas,” Las Vegas lawyer and Internet casino analyst Tony Cabot told the Las Vegas Review-Journal. “The online gaming industry would be better off regulated than being banned.” 

Bear, Stearns Co. Inc. online gambling analyst Michael Tew said the U.S. Department of Justice prosecutes American citizens who operate online gambling sites, but won’t go after foreign nationals who run illegal gambling sites. 

In an Aug. 23 letter to Nevada Gaming Control Board Chairman Dennis Neilander, the head of the Justice Department’s criminal division, Michael Chertoff, reaffirmed that online gambling is illegal under federal law. 

However, several gambling sites operate outside the United States, and are promoted and available online to U.S. and Nevada residents. 

Nevada regulators have been charged by state lawmakers with making sure Internet betting complies with federal law.