PC World Magazine article
[size=18:e3fb5b93e7][b:e3fb5b93e7]New Law Won’t Stop Internet Gambling[/b:e3fb5b93e7][/size:e3fb5b93e7]
FEDERAL LEGISLATION BANS CREDIT-CARD PAYMENTS, BUT SITES HAVE ALTERNATIVES.
Place your bets—just don’t pay with a credit card. When Congress specifically criminalized Internet gambling at the end of September by outlawing credit-card payments to the services, it failed to stop aspiring card sharks and delusional Oakland Raiders fans from parting with their paychecks, experts say. Off shore sites simply set up shop where U.S. law enforcers can’t reach them, and domestic gamblers are finding alternative ways to pay them.
People who bet online will not face criminal prosecution under the law because it does not ban Internet gambling; instead it requires that banks and other financial institutions block credit-card payments to gambling sites.
“If you send a check in, you’ll be fine. There’s no way it’s going to stop,” says Frank Catania, a former New Jersey gambling regulator who currently lobbies for the onlinegambling industry. The Federal Reserve is not expected to force banks to screen personal checks or other payment methods that are more diffi cult to track, experts say.
RAKING IN BILLIONS
U.S. residents have been placing bets over the Internet since 1995, and from the outset some members of Congress have been trying to ban the activity. Their past eff orts failed due to opposition from dog tracks, state lotteries, and other interests worried that such a prohibition would hamper their operations.
Internet gambling is booming. By last summer, U.S. gamblers accounted for half of the industry’s $12 billion in revenue, and online-gambling stocks such as that of Party Gaming were flying high on the London Stock Exchange.
In July, Republicans in the House of Representatives passed an Internet gambling ban, but it encountered opposition in the Senate and appeared to be headed for yet another defeat until Senate Majority Leader Bill Frist (R - Tennessee) attached it to an unrelated port-security bill — a move that guaranteed passage. When the bill passed in September, Frist denounced gambling as an addiction that “frays the fabric of society.”
In the wake of the law’s passage, investors in London sold off PartyGaming and other Internet gambling stocks, erasing $7 billion from the stock exchange in a matter of days. Many of those British companies said they would no longer accept wagers from their most lucrative market across the Atlantic.
But other gambling sites, such as the privately owned Bodog (www.bodog.com) and PokerStars (www.pokerstars.com), say they will continue to serve American customers. Their Caribbean locales put them beyond the reach of U.S. law enforcement—unlike gambling executives in Britain, who face extradition to this country under a 2004 treaty originally intended for extraditing terror suspects.
Industry pundits don’t expect the ban to end online gambling. “I have no doubt the private operators will pick up the slack,” says Tejinder Randhawa, an analyst for Evolution Securities in London.
PLAYERS FIGHT BACK
Congress could still decide to roll back or modify the law. The Poker Players Alliance hopes to mobilize the 23 million online card players in this country into a powerful lobby to counteract opposition to online gambling. “Prohibition doesn’t work,” says Alliance president Michael Bolcerek. “[Congress] should have offered legislation that places a high priority on making sure that kids don’t play poker online, and address [gambling] addiction.” Instead, Bolcerek says, “you’ll find sites that won’t abide by industry aims to safeguard the American public.”
For now, online gamblers are cautiously making other plans. Lee Sullivan, of Alexandria, Virginia, says she might spend less time in front of the computer and more time at the corner bar shooting pool.
“If it all goes away, it’ll be a bummer—but it won’t be the end of the world,” says Sullivan, who won a free trip to last August’s World Series of Poker after qualifying through the PokerStars site. “Still, I don’t see how the U.S. government can put the toothpaste back in the tube on this one.”
—Andy Sullivan |
