Sunday, July 30, 2006
clamp down on Internet casinos
For the complete article go to:
http://www.nytimes.com/2006/07/25/business/25gamble.html?pagewanted=1&_r=1&ref=worldbusiness
The Gambling Is Virtual; the Money Is Real
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By MATT RICHTEL and HEATHER TIMMONS
Published: July 25, 2006
Can the United States handcuff online wagering?
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Glen Walker, a professional sports bettor in North Carolina who places up to 70 bets a week of $2,000 to $5,000 each during football season, does not think so. “They’re not going to stop the offshore sports books,” Mr. Walker said. A crackdown will “just force it back to the black market.”
Last week, one such wagering site, BetOnSports.com, a publicly traded company in Britain, became the focal point of an American crackdown on offshore casinos, where gamblers anywhere in the world can use the highly profitable sites to place wagers on sporting events. They can also play casino games like blackjack and poker from their personal computers.
Federal agents arrested the British chief executive of BetOnSports, David Carruthers, who was in the United States on a flight layover. He is in custody in Fort Worth; the betting site has temporarily suspended operations to satisfy a temporary restraining order that prohibits the company from taking bets from United States residents. Mr. Carruthers is awaiting a hearing on his detention.
In Washington, the House overwhelmingly approved legislation recently that would clamp down on Internet casinos in part by restricting the ability of American financial institutions to process wagers.
The legislative-prosecutorial one-two punch appears to be the most concerted effort yet by the federal government to undermine Internet gambling in an era of well-organized, publicly owned offshore casinos. For the first time, Washington has succeeded in temporarily shutting down a publicly owned site and its effort has gained the attention of the operators, whose share prices plummeted last week.
Still, few experts expect the crackdown to do anything more than dent the industry. Sebastian Sinclair, an analyst with Christiansen Capital Advisors, which tracks online gambling trends, said offshore gambling could be “curtailed but it cannot be stopped.”
Other experts see the recent moves as little more than an elaborate cat-and-mouse game serving only to benefit Las Vegas and Atlantic City casinos, along with Indian gambling operations, rather than seriously protecting Americans from falling prey to excessive gambling.
Some eight million Americans like Mr. Walker wager $6 billion annually through the Internet, many making bets on their favorite sports team or the N.C.A.A. basketball pool. About half of all online wagers come from the United States.
Critics say that online gambling is the equivalent of putting a slot machine in every home, providing an easy chance to lose money with a few mouse clicks, all without the social controls at a bricks-and-mortar casino.
Mr. Walker disagrees. “We’re not doing anything immoral or illegal,’’ he insisted. “I just don’t see that I’m harming anyone.”
While prosecutors argue that Internet casinos violate the law, there is no federal prohibition against actually placing a bet. So how much success the federal push can have “is a very profound question,” said Representative Jim Leach, Republican of Iowa, the co-author of the legislation, who says the gambling is detrimental to families and the economy.
But even he concedes that Washington’s best efforts will lead only “to a reduction but not necessarily to an ending” of online gambling.
The question of further curbing Internet gambling has been a perennial issue in Congress in recent years. But people involved with the legislation say the reason for its success, at least in the House, is mainly explained by lawmakers wanting to distance themselves from the corruption scandal involving the convicted lobbyist Jack Abramoff and his association with Indian casinos. Mr. Abramoff had lobbied vigorously against versions of the bill in the past. Still, some politicians in the House came out strongly against the bill, including Representative Barney Frank, Democrat of Massachusetts, who called it “cultural authoritarianism.”
http://www.nytimes.com/2006/07/25/business/25gamble.html?pagewanted=1&_r=1&ref=worldbusiness
The Gambling Is Virtual; the Money Is Real
Sign In to E-Mail This Print Single Page Reprints Save
By MATT RICHTEL and HEATHER TIMMONS
Published: July 25, 2006
Can the United States handcuff online wagering?
Skip to next paragraph
Glen Walker, a professional sports bettor in North Carolina who places up to 70 bets a week of $2,000 to $5,000 each during football season, does not think so. “They’re not going to stop the offshore sports books,” Mr. Walker said. A crackdown will “just force it back to the black market.”
Last week, one such wagering site, BetOnSports.com, a publicly traded company in Britain, became the focal point of an American crackdown on offshore casinos, where gamblers anywhere in the world can use the highly profitable sites to place wagers on sporting events. They can also play casino games like blackjack and poker from their personal computers.
Federal agents arrested the British chief executive of BetOnSports, David Carruthers, who was in the United States on a flight layover. He is in custody in Fort Worth; the betting site has temporarily suspended operations to satisfy a temporary restraining order that prohibits the company from taking bets from United States residents. Mr. Carruthers is awaiting a hearing on his detention.
In Washington, the House overwhelmingly approved legislation recently that would clamp down on Internet casinos in part by restricting the ability of American financial institutions to process wagers.
The legislative-prosecutorial one-two punch appears to be the most concerted effort yet by the federal government to undermine Internet gambling in an era of well-organized, publicly owned offshore casinos. For the first time, Washington has succeeded in temporarily shutting down a publicly owned site and its effort has gained the attention of the operators, whose share prices plummeted last week.
Still, few experts expect the crackdown to do anything more than dent the industry. Sebastian Sinclair, an analyst with Christiansen Capital Advisors, which tracks online gambling trends, said offshore gambling could be “curtailed but it cannot be stopped.”
Other experts see the recent moves as little more than an elaborate cat-and-mouse game serving only to benefit Las Vegas and Atlantic City casinos, along with Indian gambling operations, rather than seriously protecting Americans from falling prey to excessive gambling.
Some eight million Americans like Mr. Walker wager $6 billion annually through the Internet, many making bets on their favorite sports team or the N.C.A.A. basketball pool. About half of all online wagers come from the United States.
Critics say that online gambling is the equivalent of putting a slot machine in every home, providing an easy chance to lose money with a few mouse clicks, all without the social controls at a bricks-and-mortar casino.
Mr. Walker disagrees. “We’re not doing anything immoral or illegal,’’ he insisted. “I just don’t see that I’m harming anyone.”
While prosecutors argue that Internet casinos violate the law, there is no federal prohibition against actually placing a bet. So how much success the federal push can have “is a very profound question,” said Representative Jim Leach, Republican of Iowa, the co-author of the legislation, who says the gambling is detrimental to families and the economy.
But even he concedes that Washington’s best efforts will lead only “to a reduction but not necessarily to an ending” of online gambling.
The question of further curbing Internet gambling has been a perennial issue in Congress in recent years. But people involved with the legislation say the reason for its success, at least in the House, is mainly explained by lawmakers wanting to distance themselves from the corruption scandal involving the convicted lobbyist Jack Abramoff and his association with Indian casinos. Mr. Abramoff had lobbied vigorously against versions of the bill in the past. Still, some politicians in the House came out strongly against the bill, including Representative Barney Frank, Democrat of Massachusetts, who called it “cultural authoritarianism.”
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