|
As Americans help fuel the growth of Internet gambling, which will generate $12 billion in revenue this year, the battle over its legality continues
October 17, 2005 - The Internet gambling business is a study in contradictions.
The Justice Department says it's against the law, though operators say there's no federal law that specifically outlaws online gambling and cite a federal court decision supporting that view.
It's illegal in Nevada, which is home to one of the largest networking events for online casino marketers. Internet gambling experts say players and operators may never be prosecuted here.
Nevada began the process to legalize it, saying the state was losing potential tax dollars to offshore Web sites. But that process stopped, with regulators concerned about running afoul of the feds and jeopardizing the state's primary economic engine.
Internet gambling will generate some $12 billion in revenue this year, with more than half of those customers coming from the United States. Yet the 60 or so jurisdictions that now license Internet gambling sites are located far from the reach of the Justice Department, in countries that have legalized it.
Peter Marcus, a Londoner who represents the world's second-largest Internet casino, is well aware of these contradictions. He's one of only a few offshore operators who isn't afraid to discuss them.
"I find it very strange that a country that so much believes in freedom of expression has a problem with (Internet gambling)," Marcus said during an interview in Las Vegas last month, where he attended the Casino Affiliate Convention.
Close to 700 marketers for online casinos attended the little-known event at the Stardust, which was held the same week as the Global Gaming Expo, the world's largest convention for land-based casinos.
The casino companies that attended Global Gaming Expo didn't speak at the Casino Affiliate Conference, while the online operators at the Stardust were conspicuously absent from the Expo's trade show floor at the Las Vegas Convention Center.
Internet gambling sites continue to run television ads and host high-profile charity events in the United States, effectively thumbing their noses at the Justice Department.
And Marcus has gone public with his disagreement.
"It's very clear to us that online poker and online casinos are not covered by (U.S. law)," he said.
Marcus, like many other operators, wants legitimacy.
"I want the U.S. authorities to regulate it," he said. "I want them to make (the regulations) as strict as they want."
Hundreds of Internet casinos now on the Web are minting profits in the shadow of the Justice Department, which has called Internet gambling a potential haven for money launderers, terrorists and other criminals. The feds cite the Wire Act, a 1961 law aimed at curbing bookmaking by organized crime.
The Wire Act has received at least one major defeat in court.
In ruling against online gamblers who disputed charges for losses on their credit cards, a federal appeals court in 2001 said the Wire Act did not apply to casino-style gambling on the Internet.
The Justice Department disagrees with the 5th U.S. Circuit Court of Appeals ruling, which is widely cited by Internet casino operators. The gamblers who lost their case did not appeal the case to the U.S. Supreme Court.
Meanwhile, Nevada passed legislation in 2001 to legalize Internet gambling provided that certain conditions were met. But Nevada regulators weren't yet convinced that the Internet could be effectively policed. The effort ultimately died in 2002 when the Nevada Gaming Control Board received an opinion letter from the Justice Department stating that Internet gambling violated the Wire Act. [...] |
ENJOY OUR NETWORK: SortCasinos | SortOnlineCasinos | Gambling-Pro
Newsfeed Service! | Casino Affiliate Programs
