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Gaming Industry Discounts Effect of Law Against On-Line Gambling

  • Steve Mort

Gaming industry leaders say Internet gambling will thrive despite a recent law effectively barring online betting in the United States. In October, President Bush signed legislation making it illegal for U.S. banks and credit card companies to process payments to gambling Websites But some traditional U.S. casino operators view the rules as temporary and say a shift away from online gaming is unlikely over the long-term.

In 2005, Americans bet $8 million at Websites. But legislation passed by the U.S. Congress has made it harder to gamble online -- at least for now.

Industry leaders, like Frank Fahrenkopf from the American Gaming Association, doubt it will be enough to stop U.S. gamblers. "I think what's going to happen is, number one, they will continue to bet. They'll find other means to get their money to these offshore sites".

In Las Vegas, the home of American gambling, there's a different view of the 'Unlawful Internet Gambling Enforcement Act' from the one in Washington.

While lawmakers aim to curb online gaming, Vegas is skeptical. Casino operators believe demand will force Congress to permit online gambling -- under strict government supervision.

Rob Stillwell, from Boyd Gaming, predicts American companies will eventually be allowed to enter the market. "I think what it comes down to is a matter of licensing and a matter of regulation. So to the extent that we can create the mechanism by which to fairly regulate this business then I could see the more traditional, commercial gaming companies getting involved".

As U.S. officials work toward a June 2007 deadline to find ways to enforce the new rules - other countries are easing restrictions. The U.K. is looking to regulate rather than restrict online gaming, bolstering the hopes of Internet gambling businesses. Britain has warned that the U.S. legislation could drive the industry underground.

Fahrenkopf adds, "Money always has a way of finding its way to where it wants to go, so that's why I'm hopeful that the legislators, even those legislators who are opposed to all forms of gambling, will realize, number one, they're not going to stop it. Prohibition has never worked in this country. It's better to regulate it. It's better to control it, it's better to tax it".

The casino industry, fearing competition, has not always supported online gambling but now it sees the Internet as a way to attract new gamblers

Rob Stillwell hopes lawmakers reverse course and permit U.S. companies to get a slice of the action. "I think what the government may come to realize is that people are gambling on the Internet anyway. And just because there's this legislation that maybe prevents U.S.-born companies from profiting from that type of activity, it's already happening".

For now the U.S. government is pressing ahead -- first it must find out how to distinguish Internet gambling payments from other transactions in order to block them. But the American Gaming Association estimates $5 billion is still being bet online by U.S. residents -- a number it believes is unlikely to go down, whatever action Congress decides to take next.