Abramoff's "Gift" to Online Gambling
(Kiplinger Business Forecasts Via Thomson Dialog NewsEdge) WITH THE DISCREDITED WASHINGTON LOBBYIST HEADED OFF TO JAIL, CONGRESS APPEARS BENT ON BANNING CREDIT CARD PAYMENTS TO ONLINE CASINOS IN REACTION TO THE SCANDAL.
A new law to dent illegal Internet gambling? Bet on it. After a decade of failed attempts, expect a bill to pass this year requiring banks and credit card companies to block electronic payments used to settle online wagers.
Why the sudden change in odds for a gambling bill? Thank Jack Abramoff and his lobbying scandal. For years, Abramoff reportedly worked to undercut the bill because one of his former clients planned to sell lottery tickets online and the ban would have torpedoed that business. Now lawmakers want to show they're not under his influence.
The bill won't end Web gambling, though it could slash worldwide revenue by a whopping 25%. Internet gaming is a global industry that rakes in $12 billion to $15 billion a year. More than half the keep comes from Americans placing illicit bets on everything from bingo and blackjack to craps and canasta, slot machines and sporting events. Running an Internet gambling operation is already illegal in the U.S. The coming legislation will deprive Americans of the means to pay for their illegal betting.
The bulk of rogue bookies and betting rings set up operations in countries that condone Internet gambling. Many are owned by large British firms and are located mainly in the Caribbean.
Banks and card companies will be held responsible for cutting off the flow of funds. They have the technology to deny card and wire transfers in real time. Big banks are already up to speed, while small ones will need to upgrade their networks. If there's a glitch and a bettor still manages to place some money on the table, creditors can't be held liable in lawsuits, as long as they can show compliance with enforcement regulations. That was a condition for big banks and card companies to back the bill. The law will also slap stiffer penalties on offenders. The Department of Justice has already fined online payment firm PayPal millions of dollars for facilitating illegal online bets.
Still, where there's a will to bet, there's a way. Online casinos and avid electronic gamblers will find routes around the ban, opening accounts with foreign banks and working through direct payment services based outside the U.S . And, of course, the law won't change a thing for legal games of chance. You'll still be able to go to the track and bet on the ponies, drop a load in Las Vegas and pick a Powerball number.
Bill sponsors Rep. Jim Leach (R-IA) and Sen. Jon Kyl (R-AZ) say that the unsanctioned Web sites provide an outlet for money laundering, drug trafficking and terrorist financing. Family groups are behind the bill because they see all gambling as a vice. Other backers include professional and college sports organizations, such as the National Football League and the National Collegiate Athletic Association.
(Kiplinger Business Forecasts Via Thomson Dialog NewsEdge) WITH THE DISCREDITED WASHINGTON LOBBYIST HEADED OFF TO JAIL, CONGRESS APPEARS BENT ON BANNING CREDIT CARD PAYMENTS TO ONLINE CASINOS IN REACTION TO THE SCANDAL.
A new law to dent illegal Internet gambling? Bet on it. After a decade of failed attempts, expect a bill to pass this year requiring banks and credit card companies to block electronic payments used to settle online wagers.
Why the sudden change in odds for a gambling bill? Thank Jack Abramoff and his lobbying scandal. For years, Abramoff reportedly worked to undercut the bill because one of his former clients planned to sell lottery tickets online and the ban would have torpedoed that business. Now lawmakers want to show they're not under his influence.
The bill won't end Web gambling, though it could slash worldwide revenue by a whopping 25%. Internet gaming is a global industry that rakes in $12 billion to $15 billion a year. More than half the keep comes from Americans placing illicit bets on everything from bingo and blackjack to craps and canasta, slot machines and sporting events. Running an Internet gambling operation is already illegal in the U.S. The coming legislation will deprive Americans of the means to pay for their illegal betting.
The bulk of rogue bookies and betting rings set up operations in countries that condone Internet gambling. Many are owned by large British firms and are located mainly in the Caribbean.
Banks and card companies will be held responsible for cutting off the flow of funds. They have the technology to deny card and wire transfers in real time. Big banks are already up to speed, while small ones will need to upgrade their networks. If there's a glitch and a bettor still manages to place some money on the table, creditors can't be held liable in lawsuits, as long as they can show compliance with enforcement regulations. That was a condition for big banks and card companies to back the bill. The law will also slap stiffer penalties on offenders. The Department of Justice has already fined online payment firm PayPal millions of dollars for facilitating illegal online bets.
Still, where there's a will to bet, there's a way. Online casinos and avid electronic gamblers will find routes around the ban, opening accounts with foreign banks and working through direct payment services based outside the U.S . And, of course, the law won't change a thing for legal games of chance. You'll still be able to go to the track and bet on the ponies, drop a load in Las Vegas and pick a Powerball number.
Bill sponsors Rep. Jim Leach (R-IA) and Sen. Jon Kyl (R-AZ) say that the unsanctioned Web sites provide an outlet for money laundering, drug trafficking and terrorist financing. Family groups are behind the bill because they see all gambling as a vice. Other backers include professional and college sports organizations, such as the National Football League and the National Collegiate Athletic Association.
