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Saturday, Jul 11, 2009
Online gamblers are waiting for legislators to make their Wild West world a safer place to wager -- but the government keeps waffling.
Oct 5, 2002 | The man calling himself Screwed had had a bad night. He'd spent a few late hours playing roulette at his favorite online casino, his luck had soured, and now he was at Winner Online, a popular gambling discussion site, griping to anyone who cared to listen about why he thought he'd been wronged.
In his messages, Screwed -- whose profile describes him as "retired," but who is otherwise anonymous -- offered a complex tale of big winnings going bust, thanks to some sort of snafu. At 4 a.m. one September morning, he wrote, after many rounds of roulette, he hit a big jackpot -- or, at least, he thought he'd won big, as his account showed more than $10,000 in chips. But when he went to cash out, the online casino wouldn't accept his password. When he managed to reach a customer service representative on the phone, the rep told him that the whole thing had been a "computer glitch": Screwed had, indeed, won big, the casino acknowledged, but the site had accidentally given him too much money to begin with, so he'd been betting with money that was not his own. Screwed was furious -- and that's why he ended up at Winner Online.
The legality of Internet gambling in the United States is routinely described as "murky." With few exceptions, it is illegal to set up an Internet gambling site in the U.S. But is it legal for a U.S. resident to place a bet at an offshore site, or to use an American bank account or credit card to pay for bets? The answer depends on whom you ask: representatives of state governments, the federal government, federal courts, various legal experts, and trade organizations with an interest in the matter all offer conflicting interpretations of how the law applies to gambling online. But the one thing that all of these parties agree upon is that, regardless of legality, gambling is thriving online, especially with Americans.
In the absence of regulation, gamblers have devised elaborate grass-roots systems to vet the hundreds of online casinos now in operation. There are dozens of "gambling portals" -- like Winner Online, where Screwed was sounding off -- and "player's associations" set up to work like an Internet version of a neighborhood watch program, with everyone keeping an eye out for thieves. Some of these groups even act as arbitrators, getting back thousands of dollars for players who were cheated.
On Oct. 1, the U.S. House of Representatives passed the Internet Gambling Enforcement Act, in an attempt, many members of Congress said, to stem the rise of online gambling. The bill, sponsored by Reps. Jim Leach, R-Iowa, and John LaFalce, D-N.Y., prohibits financial companies -- such as banks, online payment services and credit card companies -- from making payments to "unlawful" gambling sites. "We shut off the money, we shut off the sites," Rep. Spencer Bachus, R-Ala., told the Associated Press.
Maybe. Many gamblers note that American financial companies have already shied away from processing Internet casino payments. Many players now use foreign-based payment systems that are probably outside the scope of U.S. law. Which means, gamblers say, that people will continue to bet online even if the bill passes -- only then, they warn, the online gambling economy will be completely underground, under the domain of foreign governments over which U.S. law might be powerless. (It's not clear that the Leach-LaFalce bill will pass, as it still requires approval by the Senate; that body is currently bogged down with weightier issues, and the end of the congressional term is fast approaching.)
Lawmakers who support the Leach-LaFalce bill offer two main reasons for their opposition to Internet betting: they worry that online casinos could be used as fronts for money laundering, and they worry about problem gamblers. But pushing gambling further underground only exacerbates those problems, proponents of legalized gambling say. If everyone betting online is using a foreign payment service, how will the government know if someone is using a casino to hide ill-gotten money? Even gambling-addiction help groups aren't very keen on the House bill. People with gambling problems, they argue, would be better served if there were rules governing online casinos' responsibilities to those groups, and if there were online casino-funded programs to help them.
In the face of the proposed legislation, which they view as flawed, online gamblers are issuing a curious plea to the government: Monitor us! Instead of using their ad hoc regulating systems, virtually everyone involved in online gambling -- from the casinos to the players to the consultants -- would prefer to live under the sunshine of the legal system. Online casinos are perhaps the world's only industry that is actively inviting U.S. taxation. The only way to make online gambling less of a crapshoot, they say -- the only way to make it safer, for both players and society -- is to do what's done for other forms of gambling in the 47 states where some sort of wagering is legal: Regulate, regulate, regulate.
