November 17, 2005
LEGALIZING INTERNET GAMBLING WOULD BRING BILLIONS IN U.S. TAX DOLLARS, BUT
CRITICS SAY IT CANNOT BE REGULATED AND CAN CORRUPT YOUTH - "60 MINUTES"
SUNDAY
So many Americans use their computers to gamble on overseas websites that if
those virtual casinos were to be regulated and taxed by American authorities,
tax revenues would be in the billions of dollars. But the federal government
says Internet gambling is 100 percent illegal, and people who want to keep it
that way believe that the sites - legal in more and more foreign countries -
can never really be effectively regulated. What's more, they say, those sites
can and do corrupt children and create more addicted gamblers. Lesley Stahl
examines this contentious issue in a 60 MINUTES report to be broadcast
Sunday, Nov. 20 (7:00-8:00 PM, ET/PT) on the CBS Television Network.
In Britain, where many online gambling firms are based, a gaming executive
says America's treasury is missing out. "We calculated that were America to
have regulated the industry in 2004, the American states would have earned
$1.2 billion in tax," says Nigel Payne, who runs the London-based
Sportingbet, one of the biggest online gaming companies. Payne says he would
be glad to pay an American tax in return for regulation of his industry,
which he believes would eliminate some of the less-than-reputable sites he
competes with. Payne estimates that 12.5 million Americans gamble on the
Internet. Bets placed from the U.S. comprise as much as 80 percent of global
online gambling, and contribute most of the $10 billion in profit the
overseas "I-gaming" industry will make this year.
Despite a long-standing federal ban, more Americans gamble more money on the
Internet each year. U.S. authorities have never prosecuted individual bettors
and don't plan to start. Website operators are beyond the reach of U.S. law
because they're all based overseas, so they operate with impunity...even
spending millions to advertise here.
The U.S.'s own domestic gambling industry, which long opposed legalizing
online gaming, has begun to shift its position. Seeing offshore competitors
make billions while his U.S. company is shut out of the Internet is
frustrating for MGM/Mirage CEO Terry Lanni. "There's gaming in every state
but two states in the United States," he says. "If it's legal [in 48 states]
and it's regulated and taxed and we're comfortable with it, why don't we
allow it also in the area of the Internet? It makes no sense," Lanni
complains.
But there's no serious move yet in Congress to legalize the industry, and at
least one member, Sen. Jon Kyl (R-Ariz.) wants a new law to put more teeth in
the federal prohibition against online gambling. "It's so easy to do. It's so
easy for kids to do. It's so addictive," says Kyl, who's pushing a bill that
would prohibit U.S. banks and credit card companies from handling any online
betting transactions. "We may not be able to stop it all, but if we can stop
the major part of it that's coming from offshore, we will have done something
very, very good," he tells Stahl.
Kids can get onto some of the overseas sites, as Alex Hartman, the
16-year-old son of 60 MINUTES Producer Rome Hartman, demonstrated. Using
dad's credit card, he gained access to a gaming website and quickly lost $100
playing roulette. Some sites rejected him, however, including one owned by
Payne's company. Payne says properly regulating the industry so only
responsible companies like his will survive is the best and only way to
control the inevitable. "Think people are going to stop gambling? Seriously?
Do you think the Internet's going to go away?" he asks Stahl.
LEGALIZING INTERNET GAMBLING WOULD BRING BILLIONS IN U.S. TAX DOLLARS, BUT
CRITICS SAY IT CANNOT BE REGULATED AND CAN CORRUPT YOUTH - "60 MINUTES"
SUNDAY
So many Americans use their computers to gamble on overseas websites that if
those virtual casinos were to be regulated and taxed by American authorities,
tax revenues would be in the billions of dollars. But the federal government
says Internet gambling is 100 percent illegal, and people who want to keep it
that way believe that the sites - legal in more and more foreign countries -
can never really be effectively regulated. What's more, they say, those sites
can and do corrupt children and create more addicted gamblers. Lesley Stahl
examines this contentious issue in a 60 MINUTES report to be broadcast
Sunday, Nov. 20 (7:00-8:00 PM, ET/PT) on the CBS Television Network.
In Britain, where many online gambling firms are based, a gaming executive
says America's treasury is missing out. "We calculated that were America to
have regulated the industry in 2004, the American states would have earned
$1.2 billion in tax," says Nigel Payne, who runs the London-based
Sportingbet, one of the biggest online gaming companies. Payne says he would
be glad to pay an American tax in return for regulation of his industry,
which he believes would eliminate some of the less-than-reputable sites he
competes with. Payne estimates that 12.5 million Americans gamble on the
Internet. Bets placed from the U.S. comprise as much as 80 percent of global
online gambling, and contribute most of the $10 billion in profit the
overseas "I-gaming" industry will make this year.
Despite a long-standing federal ban, more Americans gamble more money on the
Internet each year. U.S. authorities have never prosecuted individual bettors
and don't plan to start. Website operators are beyond the reach of U.S. law
because they're all based overseas, so they operate with impunity...even
spending millions to advertise here.
The U.S.'s own domestic gambling industry, which long opposed legalizing
online gaming, has begun to shift its position. Seeing offshore competitors
make billions while his U.S. company is shut out of the Internet is
frustrating for MGM/Mirage CEO Terry Lanni. "There's gaming in every state
but two states in the United States," he says. "If it's legal [in 48 states]
and it's regulated and taxed and we're comfortable with it, why don't we
allow it also in the area of the Internet? It makes no sense," Lanni
complains.
But there's no serious move yet in Congress to legalize the industry, and at
least one member, Sen. Jon Kyl (R-Ariz.) wants a new law to put more teeth in
the federal prohibition against online gambling. "It's so easy to do. It's so
easy for kids to do. It's so addictive," says Kyl, who's pushing a bill that
would prohibit U.S. banks and credit card companies from handling any online
betting transactions. "We may not be able to stop it all, but if we can stop
the major part of it that's coming from offshore, we will have done something
very, very good," he tells Stahl.
Kids can get onto some of the overseas sites, as Alex Hartman, the
16-year-old son of 60 MINUTES Producer Rome Hartman, demonstrated. Using
dad's credit card, he gained access to a gaming website and quickly lost $100
playing roulette. Some sites rejected him, however, including one owned by
Payne's company. Payne says properly regulating the industry so only
responsible companies like his will survive is the best and only way to
control the inevitable. "Think people are going to stop gambling? Seriously?
Do you think the Internet's going to go away?" he asks Stahl.
