March 6 (Bloomberg) -- Just across the river from Detroit, the Casino Windsor in Canada entices thousands of American gamblers each year with ads to cross ``the world's friendliest border.'' The welcome mat may soon be rolled up.

By the end of next year, U.S. law will require those traveling across the river -- and everywhere else between the two countries -- to carry passports or similar identification. A U.S. proposal for a $50 travel card has people such as Peter Murphy planning to stay home.

``It's not worth it to me,'' Murphy, a 75-year-old Michigan resident, said last month on one of his weekly visits to the casino. ``I wouldn't come to Canada at all.''

The casino, jointly managed by Las Vegas-based Harrah's Entertainment Inc. and Beverly Hills, California-based Hilton Hotels Corp., is just one of the businesses on both sides of the border that are concerned the new rules will deter millions of travelers, hurting the economic prospects of restaurants, bars, stores and tourist spots.

Local politicians worry the rules will split border communities accustomed to decades of easy co-existence. ``We are one metropolitan region,'' Windsor Mayor Eddie Francis said in an interview. If the rules are tightened, ``a lot of people will change their behavior.''

The new regulations are the latest potential irritant to the relationship between the world's largest trading partners. The list of grievances includes both political and economic issues: Canada didn't join the U.S. invasion of Iraq and the countries have been feuding for two decades over lumber duties.

Fewer Trips

A study by the Canadian Tourism Commission estimated that the rules changes would mean 7.7 million fewer trips by Americans to Canada during the first three years the rules are in place, costing the Canadian tourism industry $1.7 billion. U.S. tourism receipts would drop by $785 million over the same period because of 3.5 million fewer Canadian visitors to the U.S., the report said.

Last year, 31.7 million Americans visited Canada, with 24.5 million crossing the border by car, according to Statistics Canada, a Canadian government agency. In 2004, the last year for which the agency had data on the question, 13.9 million Canadians traveled to the U.S.

The new travel regulations are part of the Western Hemisphere Travel Initiative, a set of requirements passed by Congress in 2004 as part of a broad reorganization of U.S. intelligence agencies.

The measure would require, by Jan. 1, 2008, a passport or equivalent identification from all people traveling to the U.S. from countries where passports hadn't been previously required, such as Mexico, Canada and parts of the Caribbean. The rules would apply to U.S. citizens as well as those from other countries. The U.S. plans to issue an identity card that would cost about $50, half as much as a passport.

`A Chilling Effect'

``We believe it will really have a chilling effect on spontaneous travel across the border,'' says Sarah Hubbard, vice president for government relations at the Detroit Regional Chamber of Commerce. Its members include Eagan, Minnesota-based Northwest Airlines Corp., whose hub is at Detroit Metro Airport, which many Canadians use.

Truckers, who help carry the more than $600 billion in goods that flow across the border annually, say they may be slowed by traffic tie-ups caused by confusion among leisure travelers over the new regulations.

Background Checks

Truck drivers already undergo background checks to participate in expedited crossing programs and should be exempted from any new requirements, says Martin Rojas, executive director for safety and security issues at the American Trucking Association, which represents companies such as YRC Worldwide Inc. and Overnite, a division of United Parcel Service Inc.

Jarrod Agen, a spokesman for the U.S. Department of Homeland Security, says details of the program ``are still in the evaluation stage.''

Representative Bart Stupak, a Democrat from Northern Michigan, says the impact of the changes were lost in debate about the broader legislation at the time it was approved. In recent months, border-state lawmakers from both parties have begun speaking out against the proposed requirements.

``They're putting on an unnecessary burden in the name of security,'' says Stupak, who is co-chairman of the House's Northern Border Caucus.

Tourist Cruises

Concerns about the new travel rules run the length of the border. In Bellingham, Washington, Drew Schmidt says the number of Canadians riding on his tourist cruises fell 20 percent last summer because of confusion about when the laws take effect.

Debra Kellerman, one of the owners of the Angle Inn Lodge in Oak Island, Minnesota, says she is concerned the new requirements will keep guests away.

``It's our government driving us out of business,'' Kellerman said during a recent trip to Washington to meet with congressional aides on border issues.

The impact may be greatest in Detroit and its Canadian neighbor, Windsor. Canadians cross the Detroit River to the U.S. for shopping, jobs, sporting events and to travel out of the Detroit airport. Americans go to Windsor for its casinos, bingo parlors, bars and restaurants.

Americans are responsible for about 10 percent of the business at the Devonshire Mall, the largest in Windsor, general manager Doug Wolfe says. Officials at the mall, owned by Montreal-based Ivanhoe Cambridge Inc., are ``always concerned about any obstacles or challenges that visitors may have crossing the border,'' Wolfe says. ``When you start throwing obstacles up at the border, Americans kind of shake their heads and say it's not worth it.''

`Seamless' Cities

Detroit and Windsor ``are pretty much seamless,'' says Joyce Farrer, the director of emergency operations at Henry Ford Hospital in Detroit. Farrer -- one of about 5,000 Canadians, many of them nurses, who commute to Detroit -- says the new rules may discourage Canadians from working in the U.S. While most already use passports or other border-crossing programs, Farrer is concerned new employees might be discouraged if crossings become more difficult.

Officials in both countries applaud the fact that the U.S. will offer the identity cards as an alternative to passports, while saying a better solution would be allowing enhanced driver's licenses to serve as identification at the border.

Congress earlier this year approved legislation that requires states to verify the immigration status of people applying for driver's licenses by May 11, 2008. Those new licenses should be sufficient for border crossings, says Hubbard of the Detroit Chamber.

Congressional Deadline

Agen says that while the department is looking at ways to link border crossing cards with new licenses, it may be difficult because Congress set a deadline for the border-crossing cards to be implemented that comes more than a year before the new licenses.

``Let's come up with a form of I.D. that's affordable, that's accessible, that will be in everybody's wallet,'' Mayor Francis said in an interview at his office in Windsor City Hall.

Two blocks away, a steady stream of cars with Michigan license plates pour into the Casino Windsor's six-story parking garage. Americans make up 80 percent of the casino's costumers, says Holly Ward, the casino's director of communications.

To keep American gamblers coming and entice them away from three competing Detroit casinos, Casino Windsor is renovating its main entrance and building a new performance stage and 400-room hotel tower to complement its 100,000 square feet of slot machines and table games. The casino reimburses some of its regular gamblers for the bridge and tunnel tolls they pay to cross into Canada.

`We need all these customers to come across,'' Ward says. ``The more convenient it is, the better.''

To contact the reporter on this story: Nicholas Johnston in Windsor, Ontario, at njohnston3@bloomberg.net.

Last Updated: March 6, 2006 00:23 EST