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Gambling Opponents Target the Internet - 2003-11-04


A search on the Worldwide Web for Internet casinos yields more than 1.5 million sites, where anyone can learn more about electronic gambling. These sites are generating an estimated $5 billion a year, more than half of that from the U.S. market. Gambling opponents are seeking a ban on Internet betting in the United States.

A simple mouse-click brings a flood of offers from cyber casinos to play blackjack, roulette, slot machines or virtually any other game of chance a player would find in Las Vegas or Monte Carlo. The big difference, of course, is that anyone with a connection to the Internet can play in privacy, whether or not gambling is legal where they live.

That concerns Guy Clark, who is chairman of the National Coalition Against Legalized Gambling in Washington. Mr. Clark says the rapid growth of Internet wagering could lead to more compulsive gambling, which he says is costly to society.

"Addiction, bankruptcy, child abuse and spousal abuse are much higher with compulsive gamblers. Most gambling addicts resort to criminal activity of one sort or another," says Mr. Clark. "Usually white collar, not too much in the violent type of crime, but a very, very large percentage of problem gamblers -- it has been estimated 60 to 75-percent, engage in some sort of criminal activity to fund their gambling addiction, and this would just increase the possibility. People [gambling] just in their own homes can lose their own home."

Some members of the U.S. Congress have been trying to ban Internet gambling for years, and legislation designed to severely restrict such wagering has passed the House of Representatives and a Senate committee.

Still, some members, including Congressman Barney Frank of Massachusetts, say politicians should not tell people how to spend their own money. "It is just a fundamentally flawed notion. The fact is, if people want to gamble, they ought to be free to gamble," he says. "I do think it is important to protect people against forces, over which they have no control that can degrade the quality of their lives. But I am so busy trying to do that, I have no energy left over to protect them from themselves."

Internet gambling represents only a small percentage of the legal gambling activity in the United States, where 23 states allow casinos to operate, and 37 have a lottery.

Opponents of Internet gambling say such activity threatens to involve children, since some minors have access to their parent's credit cards and a computer. The opponents say countries are finding it increasingly difficult to enforce gambling laws, because legal Internet casinos can be run from some countries in Europe, South America or islands in the Caribbean. They say a lack of regulation threatens consumer protections and opens the industry to possible criminal abuses, such as money laundering.

Koleman Strumpf, a professor of economics at the University of North Carolina in Chapel Hill, does research on illegal gambling. Professor Strumpf argues that, if Internet gambling is prohibited, it will make it even more complicated for governments and law enforcement to regulate the business.

"Right now, a lot of Internet bookmaking operations are located in countries like Antigua or the United Kingdom, where at least there is some level of regulation, and probably nominally, at least indirectly, the United States can influence them," he says. "I think, if the United States tries harder to crackdown on these guys, it is not that they are going to rollover and disappear, especially given the tremendous demand for this activity. They are just going to move further from the United States, in a position that will be, I think, more difficult to regulate."

Most U.S.-based credit card companies have banned transactions involving Internet gambling, a move opponents of online wagering say significantly restricts citizens from betting at cyber casinos.

Legislation pending before the U.S. Congress would require financial institutions to block transactions involving Internet wagering, and supporters say such a law could be approved before the end of this year.

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