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Previously in Web Citations:

99.07.15
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99.06.23
Politics Made Simple

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Front Runners

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99.05.19
Menace to Society

The hype isn't the most annoying thing about the new Star Wars release.

See the complete Web Citations Index.



The Net's Next Vice
July 29, 1999

Rolling Good Times "As smoking crack cocaine changed the cocaine experience, I think electronics is going to change the way gambling is experienced." So says Dr. Howard Shaffer, the director of the division on addictions at Harvard Medical School, about Internet gambling -- the latest Web phenomenon to bring cries for legislation and study. Between 1997 and 1998 the number of gamblers online increased from 6.9 to 14.5 million, and money spent grew from $300 million to $651 million. Those are infinitesimal numbers, of course, when one considers that Americans spent more than $50 billion on traditional types of gambling in 1997. But The Financial Times and Smith Barney have predicted that annual revenues for Internet casinos will reach $10 billion early in the next century, which could be enough to give traditional casinos a run for their money. And casino owners are not the only ones getting nervous. The federal government is looking for ways to stop online gambling -- a difficult task on the borderless Internet.

Most types of Internet betting are already illegal in the U.S. -- but not in twenty-two other nations. Almost all online casinos are run from offshore havens such as Liechtenstein, Mauritius, and the Dominican Republic, where U.S. strictures hold little sway. A typically flashy example of a Web gambling spot is Casino Sunrise, which offers virtual-reality blackjack, roulette, poker, and slot machines in a setting that's "just like being in Vegas!" At Bowman International, a sports news and gambling site based in Mauritius, one could spend all day and night monitoring and betting on American sports teams. Not surprisingly, online casinos aren't always reputable -- many sites have pulled disappearing acts before paying out winnings. This is why Rolling Good Times Online -- a gambling-news mecca that also has an extensive list of links to casinos -- offers its "Dog Doo awareness" page, where readers post complaints about casinos that haven't paid up. Another concern is how easy it is for underage gamblers to access Internet casinos. While some sites try to check the identity and age of a prospective gambler by, for instance, requiring a copy of the person's birth certificate or license, others just don't make the effort.

The federal government -- worried about the effect that all-day every-day access to gambling could have, especially on children and compulsive gamblers, and perhaps also influenced by the strong lobbying power of traditional casinos -- has recently stepped up its efforts to ban U.S. citizens' access to offshore digital casinos. Last month the National Gambling Impact Study Commission recommended that the government make it illegal for U.S. citizens to gamble on sites run by foreign countries and for banks to transfer funds to casino sites. And the Internet Gambling Prohibition Act -- which calls for ISPs to discontinue the account of anyone caught gambling and establishes penalties for offshore casinos that entice American citizens -- is now before the Senate. But the bill actually would not ban all forms of Internet gambling -- betting would still be permitted on horse and dog races, in state lotteries, and fantasy sports games.

Because of this loophole and because gambling in some form is already allowed in forty-eight states -- not to mention that any ban on gambling will be almost impossible to enforce -- the federal government's stance on Internet gambling may seem a bit naive, if not hypocritical. Offshore sites can constantly change their domain names and ISPs, making it very difficult for authorities to track them. American customers can circumvent any wire-transfer regulations by establishing offshore bank accounts. Most importantly, the foreign countries that have licensed Internet gambling have little incentive to bow to a U.S. prohibition -- especially when there are plenty of American customers looking for a place to gamble. Some argue that if you can't beat them, join them -- that the U.S. would be better off allowing Internet gambling, and then cooperating with other countries to come up with ways to regulate the industry and protect consumers. The U.S., after all, is now the only country attempting to ban Internet gambling -- and maybe that should tell us something. The only thing harder to regulate than the Internet may be our human compulsions.

--Katie Bacon


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Katie Bacon is executive editor of Atlantic Unbound.

Copyright © 1999 by The Atlantic Monthly Company. All rights reserved.

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