Despite law, computer bets beat the odds
Saturday, January 31, 2009
By Gary Rotstein, Pittsburgh Post-Gazette
The Steelers fan craving a bet on tomorrow's Super Bowl might share something with those drinkers who survived Prohibition.
Regardless of federal law, someone can wager on sports today just as easily as they could find alcohol in the 1920s. People can't yet drink via computer, but they sure can gamble.
Sports betting, poker and casino-style games have flourished on the Internet since 1995, with an estimated 2,000 or more sites taking wagers at the time Congress passed the Unlawful Internet Gambling Enforcement Act in 2006. While sports wagering was already banned in most of the United States, the new measure intended to deter it by preventing financial transactions from taking place between bettor and operator.
The 2006 act, combined with Justice Department arrests of a few online gambling operators on visits to the United States, led some major companies to cease serving U.S. customers. But people connected to the gambling and financial industries say plenty of opportunity remains for any American who wants to wager by computer, as anyone searching the Internet can attest.
Various offshore, online "sports books" advertise the ability to bet on the Steelers or Cardinals to win tomorrow's game. Wagers can also be placed on which team will win the coin toss, what player will score the first touchdown, how many yards Willie Parker will gain on his first run, and much more.
The same type of bets take place in Nevada, but opponents of Internet gambling worry that the online form is much more available to minors, that it is more addictive and open to involvement by organized crime. They're concerned about its wide accessibility, which is the very thing that makes attempts to control it so difficult.
"Given the freedom of the Internet, though there have been attempts to limit or prohibit the activity, their efforts frankly are ineffective," said Michael Waxman, spokesman for the Safe and Secure Internet Gambling Initiative. The group represents England-based financial companies that would prefer to see online gambling legalized and regulated, as it is in the United Kingdom.
Hundreds of online operators are established in the Caribbean and elsewhere, where they say the U.S. ban does not apply to them. They set up accounts for customers who send checks, wire their cash payments or use payment-processing services that are also based outside the United States.
So while gambling-coded transactions were blocked by some U.S. banks and credit card companies soon after the 2006 law, and more will take that step now that federal regulations took effect Jan. 19 to implement the law, such measures fail to stop the activity.
American Bankers Association Vice President Steve Kenneally said the law primarily has an effect "on the casual user who might try to place a bet on the Super Bowl with a credit card. ... It definitely puts a hurdle in front of you if you want to place a bet, but if you want to do it, there's definitely a way around it."
The bonus for bettors is that federal and state laws generally only make it illegal to accept wagers, not to place them. Legislation will be reintroduced in Congress this session by U.S. Rep. Barney Frank, D-Mass., to legalize, regulate and tax the operators, but with no indication that Democratic congressional leaders or the Obama administration will back it.
One impact from the U.S. government's crackdown on the activity is it has removed Americans' access to some of the larger, more reputable companies that formerly served them, according to Joseph Kelly, a business law professor at State University of New York College at Buffalo. Gambling-related companies listed on the London stock exchange backed off after 2006, for example, while less reliable operators filled the void, he said.
Mr. Kelly helped develop regulations of Internet gambling used by the government of Antigua, and he said consumers would be better off dealing with companies based there, in England or other well-regulated countries.
Meanwhile, state legislators in Delaware and New Jersey have discussed trying to legalize sports betting in those states, a move seldom considered in the past. It would be in reaction to their loss of other gambling revenue, as Pennsylvania's slot machines have taken away customers from Atlantic City's casinos and Delaware's slots parlors.
One way or another, it seems apparent that any future Steelers Super Bowl -- like any sporting event, only moreso -- will keep drawing wagers in some form.
As Mr. Kenneally of the bankers association observed, "There's still bookies around, and bookmaking's been illegal for centuries."
Saturday, January 31, 2009
By Gary Rotstein, Pittsburgh Post-Gazette
The Steelers fan craving a bet on tomorrow's Super Bowl might share something with those drinkers who survived Prohibition.
Regardless of federal law, someone can wager on sports today just as easily as they could find alcohol in the 1920s. People can't yet drink via computer, but they sure can gamble.
Sports betting, poker and casino-style games have flourished on the Internet since 1995, with an estimated 2,000 or more sites taking wagers at the time Congress passed the Unlawful Internet Gambling Enforcement Act in 2006. While sports wagering was already banned in most of the United States, the new measure intended to deter it by preventing financial transactions from taking place between bettor and operator.
The 2006 act, combined with Justice Department arrests of a few online gambling operators on visits to the United States, led some major companies to cease serving U.S. customers. But people connected to the gambling and financial industries say plenty of opportunity remains for any American who wants to wager by computer, as anyone searching the Internet can attest.
Various offshore, online "sports books" advertise the ability to bet on the Steelers or Cardinals to win tomorrow's game. Wagers can also be placed on which team will win the coin toss, what player will score the first touchdown, how many yards Willie Parker will gain on his first run, and much more.
The same type of bets take place in Nevada, but opponents of Internet gambling worry that the online form is much more available to minors, that it is more addictive and open to involvement by organized crime. They're concerned about its wide accessibility, which is the very thing that makes attempts to control it so difficult.
"Given the freedom of the Internet, though there have been attempts to limit or prohibit the activity, their efforts frankly are ineffective," said Michael Waxman, spokesman for the Safe and Secure Internet Gambling Initiative. The group represents England-based financial companies that would prefer to see online gambling legalized and regulated, as it is in the United Kingdom.
Hundreds of online operators are established in the Caribbean and elsewhere, where they say the U.S. ban does not apply to them. They set up accounts for customers who send checks, wire their cash payments or use payment-processing services that are also based outside the United States.
So while gambling-coded transactions were blocked by some U.S. banks and credit card companies soon after the 2006 law, and more will take that step now that federal regulations took effect Jan. 19 to implement the law, such measures fail to stop the activity.
American Bankers Association Vice President Steve Kenneally said the law primarily has an effect "on the casual user who might try to place a bet on the Super Bowl with a credit card. ... It definitely puts a hurdle in front of you if you want to place a bet, but if you want to do it, there's definitely a way around it."
The bonus for bettors is that federal and state laws generally only make it illegal to accept wagers, not to place them. Legislation will be reintroduced in Congress this session by U.S. Rep. Barney Frank, D-Mass., to legalize, regulate and tax the operators, but with no indication that Democratic congressional leaders or the Obama administration will back it.
One impact from the U.S. government's crackdown on the activity is it has removed Americans' access to some of the larger, more reputable companies that formerly served them, according to Joseph Kelly, a business law professor at State University of New York College at Buffalo. Gambling-related companies listed on the London stock exchange backed off after 2006, for example, while less reliable operators filled the void, he said.
Mr. Kelly helped develop regulations of Internet gambling used by the government of Antigua, and he said consumers would be better off dealing with companies based there, in England or other well-regulated countries.
Meanwhile, state legislators in Delaware and New Jersey have discussed trying to legalize sports betting in those states, a move seldom considered in the past. It would be in reaction to their loss of other gambling revenue, as Pennsylvania's slot machines have taken away customers from Atlantic City's casinos and Delaware's slots parlors.
One way or another, it seems apparent that any future Steelers Super Bowl -- like any sporting event, only moreso -- will keep drawing wagers in some form.
As Mr. Kenneally of the bankers association observed, "There's still bookies around, and bookmaking's been illegal for centuries."
