Gambling - Internet Gambling

By Jerry Price - Aug 21, 2006 - 1

“In recent years there has been an explosive growth of gambling opportunity and activity on the Internet. The National Commission reported that while in 1997 there were approximately 6.9 million potential Internet gamblers and a revenue of about $300 million from this activity, just one year later there were 14.5 million potential Internet gamblers and a revenue of $651 million. And last year, there were more than 1,300 of these online sites.

“Internet gambling differs from other forms of gambling in that there are few if any regulations to assure the fairness of games or establish the responsibility of game operators, most of whom operate from servers located outside the United States. Unlike gambling activities that are subject to state and federal regulation, there is no control on the hours of availability, age of participants or type of games offered. An unscrupulous operator can merely close down a site or move its base to another country if challenged. Hackers can potentially interfere with the process by manipulating the online games, as well as stealing funds by accessing the credit card numbers used in the gambling.

“In addition, Internet gambling, unlike many other types of gambling activity, is a solitary activity, which makes it even more dangerous: people can gamble uninterrupted and undetected for unlimited periods of time. Regular or heavy users of the Internet have been found more likely to participate in Internet gambling than other users.”

Excerpted from APA Advisory on Internet Gambling (American Psychiatric Association) [Accessed March 6, 2006]

“Although online gambling is illegal in the United States, you’d never know it by looking at the numbers. Last year alone 7.8 million Americans logged on to Internet gambling sites. And with the online gambling industry banking almost $12 billion in revenue in 2005, some U.S. casinos think the time has come to legalize Internet gambling and cash in, a position that was considered all but unthinkable until recently. ‘The question is, do you play in the game or sit back and watch this thing become what ultimately will be a very, very large industry?’ says Sebastian Sinclair of Christiansen Capital Advisors, a gambling-research organization. This sea change has been a long time in coming. For years the old-guard Vegas establishment has tried its best to ignore online competition, focusing instead on maximizing its bricks-and-mortar business by pouring capital into improving resorts and boutiques to draw gamblers to the desert. But with online gaming going mainstream and operators like PartyGaming mounting IPOs, casinos such as the MGM MIRAGE have changed their strategy and now are hoping to launch their own online sites. ‘There has been a clear shift in attitude by the major publicly traded gaming companies,’ says Michael Pollock, a casino industry analyst at the Spectrum Gaming Group and a former spokesman for the New Jersey Casino Control Commission. ‘If they could marry their brands to online gaming, it would explode.’ One big problem: Congress doesn’t seem ready to take that deal.

“In fact, some lawmakers, alarmed by the growth of Internet gambling, actually are pushing for a tougher online gaming ban that would increase penalties and potentially force U.S. casinos to stay offline permanently. To date, Las Vegas’ voice in Washington, the American Gaming Association, hasn’t endorsed the controversial measures, preferring to leave its options open. But it seems increasingly clear that American casinos would rather join the action online than try to shut it down. Part of the challenge for casino operators is that, despite being in an almost $30 billion industry, they are still seen as a political liability in Congress and have no staunch allies on Capitol Hill. Tellingly, though, there are approximately 20 members of the Congressional Gaming Caucus; all besides the leadership prefer to remain anonymous.”

Excerpted from Anna Palmer, “Online Gambling Revenue Soars, And Casinos May Want Cut,” Fulton County Daily Report, February 10, 2006

“From virtual casinos and bingo halls to sports books and poker—the reigning king of the electric bet—e-gambling is a booming business.

“And industry experts say you ain’t seen nothing yet.

“‘There is absolutely no indication we’ve seen the growth in online gambling slowing or that it will slow anytime soon,’ said Eugene Christiansen, chief executive officer of Christiansen Capital Advisors.

“New York-based Christiansen Capital, considered a leading tracker of the gambling trade, estimates global consumer spending on all online gambling topped $8.2 billion last year, gobbling up about 10 percent of the industry’s revenue pie. Internet revenues are up from $3 billion just three years ago, when Christiansen Capital began tracking the infant business.

“The firm projects wagering on the Web could approach $25 billion by 2010 . . . Internet wagering is the 1,000 pound gorilla: Everyone knows it’s there, but no one seems quite sure what to do about it.

“A 45-year-old federal law written to keep bookies from laying bets over the telephone remains the thin line between legal and illegal in Internet gambling in the United States. But the Wire Act, the purview of the Justice Department, has faced its challenges in an increasingly wireless world.

“The act outlaws the transmission of bets over telephone lines. Tell that to the hundreds of thousands of Americans playing poker or clicking on virtual casino sites everyday. It’s estimated 60 percent of offshore-based gambling profits originate from business on America’s personal computers.”

Excerpted from M. D. Kittle, “Gamblers’ Web; Internet Gambling Is Big Business, and It’s Becoming a Growing Concern,” Telegraph Herald (Dubuque, IA), November 13, 2005

Two members of the U.S. House of Representatives, Bob Goodlatte, R-Va., and Rick Boucher, D-Va., have reintroduced a 2000 bill that would make it possible for law enforcement to crack down on illegal Internet gambling.

“‘The explosive growth of the Internet has provided a means for gambling operations to evade existing anti-gambling laws,’ Boucher stated. ‘These Internet gambling Web sites typically operate offshore and often serve as a prime vehicle for money laundering and other criminal enterprises. Our bill sensibly updates federal law to keep pace with new technologies by bringing the Internet within the fold of the anti-gambling restrictions that govern telephones’ . . . If approved, the Internet Gambling Prohibition Act would amend the federal 1961 Wire Act by prohibiting all forms of interstate gambling and Internet technologies used in the activity.

“In addition, it would prohibit gambling businesses from accepting payments such as credit cards, checks, wire and Internet transfers, in illegal gambling transactions as well as giving law enforcement injunction authority to uphold the act.

“It also increases the maximum prison term for a violation of this act from two years to five years.”

Excerpted from Stokely Baksh, “Online Gambling Ban Reintroduced,” UPI, February 21, 2006

Further Learning

Learn more about: Family, Addictions, Gambling

comments

1 On Jun 10th, 2008, at 2:07pm, Intyernet Gambling - US Sites Have MORE USERS wrote:

Part 1

I have just read your comments on Internet Gambling and though I do not gamble, it truly amazes me the complete and totally inaccurate information that is provided to the public.

Yes, sports’ betting is illegal and more than likely ‘casino’ style games as well; games played against the house with fixed odds that favor the house.

There are other wagering games though, games that in fact ARE regulated with rules of entry by the Federal Trade Commission.

Under the sweepstakes rules (a free entry method must be available if a fee is charged) there is a NOTABLE exception, skill games.
There are even rules I place from the IRS for reporting income by players and yes, sites located in the U S pay U S taxes. Those that are not, of course, do not, the same as any other company doing business across borders.

Additionally, the much-ballyhooed fear of children playing games for money seems to be a lot of hyperbole.


Dave Lester
Weston, WV
(304) 269-2087

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