Supporters of state licensing of Internet poker sites should drop the idea, because a new federal antigambling law will stifle the industry, Attorney General Wayne Stenehjem says.

"It's time to fold 'em," the attorney general said Wednesday.

Rep. Jim Kasper, R-Fargo, promoted a bill and state constitutional amendment during the 2005 Legislature to allow North Dakota to license and regulate Internet poker sites. The proposals won approval in the House, but were overwhelmingly defeated in the North Dakota Senate.

Congress recently approved legislation, which was part of an unrelated bill dealing with security measures for the nation's ports, that says financial institutions may not handle Internet gambling transactions. President Bush signed the bill last week.

Kasper said he was likely to give up his effort to make North Dakota a licensing agency for Internet poker sites. He has promoted the idea as a way for the state treasury to make millions from licensing fees, and said the state-owned Bank of North Dakota could profit from handling gambling transactions.

"I was saddened to see what the Republican Congress did," Kasper said. "It was a terrible way to make public policy."

Stenehjem was neutral on Kasper's bill during the 2005 Legislature, but said he would oppose a similar idea in the 2007 session. The new federal law makes the bill clearly illegal, said Stenehjem, who is a director of the Bank of North Dakota.

"The federal law prohibits the use of credit cards, which are issued through banks, and the use of banking institutions to transfer money to pay off the gambling debt," he said. "You can't use the Bank of North Dakota for that purpose under the federal law."