Should online gambling be regulated?
March 12, 1998
Gambling Web sites such as Wagernet are becoming more popular
Web posted at: 11:49 a.m. EST (1649 GMT)
ATLANTA (CNN) -- As March Madness takes hold, college
basketball fans across the United States are beginning to
predict the outcome for their favorites of the 64 teams vying
for the National Collegiate Athletic Association title.
It's prime time for excitement and prime time for gamblers.
It's also a prime concern for U.S. officials trying to crack
down on a growing Internet industry: gambling Web sites.
College students are reportedly the fastest growing sector of
gamblers, and the Internet provides an array of "virtual
casinos" willing to take bets.
Internet casinos are booming, having grown from 15 to 140 in
just a year. The online sports betting industry is expected
to take in an estimated $600 million in gross revenues this
year. Experts predict that total could grow tenfold within
Most of the online casinos are based in the Caribbean, and
licensed by local governments. About 90 percent of their
customers are based in the United States.
Anyone with a credit card and access to a computer modem is
just a click away from gambler's heaven.
"You have this expectation of potentially making money, which
is thrilling for someone like me," one Harvard graduate
student, who wishes to remain anonymous, told CNN.
From the comfort of his dorm room, this student, and some of
his peers, wager as much as $1,000 a day on sporting events,
including college basketball games.
From statehouses to Congress to the Department of Justice,
officials are clamoring for ways to regulate a global
business that some say is ripe for corruption.
'There is no integrity'
Even gaming officials are worried that online casinos may
drag down the gaming industry.
"There is no integrity, because of a lack of law enforcement
and regulatory control," Frank Fahrenkopf of the American
Gaming Association told CNN.
Gambling Web sites encourage online players to pay by credit
cards, wire transfers or cashiers checks, or to create
off-shore accounts. But aside from paying money and placing
bets, consumers have virtually no control over the gaming
activities. They also have little recourse if they are
"Even if you win, you have no idea if you'll be paid off,"
notes U.S. Sen. Jon Kyl, R-Arizona.
His proposed legislation would make cybergambling a federal
offense, punishing operators with up to a $20,000 fine and
four years in prison. Bettors could face a $2,500 fine and
six months in jail.
Senator says proposed New York law ineffective
Federal prosecutors already are using a 1961 law banning
gambling over telephone lines to crack down on online gaming
Prosecutors discuss 1961 law banning telephone gambling
Last week, 14 U.S. citizens who own or manage six
cybergambling sites were arrested and charged with violating
On Wednesday, the New York Senate passed a bill requiring
off-shore gambling companies to register with the state if
they intend to do business with New Yorkers.
But enforcement is a contentious issue.
State Sen. Emmanuel Gold called the bill a farce and said it
made state officials "look like the biggest fools in the
No company will register information that could be used by
prosecutors, Gold said.
Protecting established operations
Analysts say any federal laws restricting online gaming would
just be protecting the established U.S. gaming industry.
"People that have the hot dog stand already set up don't want
to see another one set up around the corner," Anthony Curtis,
a gambling expert, told CNN.
An attorney for one of the online casino owners charged last
week said the U.S. government should spend its time on more
"I think there are substantially more serious criminal legal
issues confronting the United States today than whether
adults voluntarily want to go online to place a bet,"
attorney Ben Brafman said.
Correspondent Charles Zewe and The Associated Press
contributed to this report.