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Feb
28th

Questions Arise About Internet Gambling

Several states have rushed to gain a foothold in the online gambling industry in the United States. As recently as a few years ago the federal government vigorously prosecuted violators. The most famous case is probably that of ‘Black Friday’ which took place on April 15th 2011. The federal government seized the domains of three of the largest online poker sites and froze all of their bank accounts essentially freezing the accounts of players. Eventually the players got their money back. The federal government no longer views internet gambling as a crime.

The Obama administration has taken a more liberal stance on internet gambling. In December 2011 the department of justice said in an opinion that internet gambling does not violate the 1961 wire act and the only form of gambling prohibited is sportsbetting. Thanks to this opinion several states have already made plans to provide online gambling services to residents. Delaware, Nevada and New Jersey will have gambling sites up and running this year. The Rev. Richard McGowan of Boston College, who studies legalized gambling, said that New Jersey is eager to reap the tax benefits from internet gambling.

McGowan said that the infrastructure and logistics of internet gambling are still being worked out. McGowan stated “I’m just wondering who is going to be running it? How are they going to be regulated? How much are the states going to be willing to spend to regulate this stuff? It’s going to be a good question.” There are also technical questions about internet gambling. Most of these can be answered by European and British gaming firms that have extensive experience in the internet gaming industry.

Since New Jersey is going to limit interactive gambling to people physically located in the state companies that set up sites in New Jersey will have to develop ways to keep out of staters from accessing the games. Casino companies say that the technology to enforce the in state rule already exists. The law in New Jersey says that problem gambling must be addressed. Donald Weinbaum, executive director at the Council of Compulsive Gambling of New Jersey, said that internet gambling will make it easier for problem gamblers to feed their addiction. Weinbaum told reporters “Compulsive gamblers usually [are] looking for action and being able to play anytime, anyplace, maybe being able to play on multiple sites at one time, play in the car,” Weinbaum says. “There’s a certain appeal to that.”

In Europe the technology already exists to identify problem gamblers and most gaming sites have a self-exclusion option and players can also limit the amounts they are allowed to spend during gaming sessions. McGowan said that struggling Atlantic City casinos see internet gambling as a new revenue stream. McGowan said “Their newest casino just went bankrupt,” McGowan says. “Two of their other casinos got sold for less than $20 million. Atlantic City is in real trouble, so Christie is trying to do anything right now to save Atlantic City.” Casinos are hoping they can lure online players back to casinos. Only time will tell.