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John G. Brokopp’s Gaming Column
DON’T STICK A FORK IN INTERNET GAMBLING
By John G. Brokopp
When President Bush signed the Unlawful Internet Gambling Enforcement
Act in October of this year, many reports gave the impression it sounded
the death knell for the multi-billion dollar Web based gambling
industry.
On the contrary, all it did was strictly regulate the process by which
funds are transferred from users of the sites to the offshore companies
which own and operate them. The practice itself wasn’t declared
illegal.
Reputable foreign companies which had conducted business with citizens
of the United States halted operations immediately, leaving the shady
fly-by-night operators to look for ways to circumvent the system. The
climate is ripe for them to create an underworld business similar to
what existed in this country during Prohibition.
The legality of online gambling has yet to be addressed. The major
stumbling block is that it continues to be discussed in context with the
1961 Wire Act which prohibits sports betting over telephone lines.
Forty-five years ago the Internet wasn’t even a glint in technology’s
eye, and during the last decade regulators and legislators have looked
the other way while online gambling was allowed to grow into a
multi-billion dollar casino on line industry.
Whereas persuasive arguments can be made against betting online on pure
games of chance, such as slots in on line casino, at issue here is poker which, because
it requires an element of skill, has been regarded in some circles as a
recreational pursuit that extends beyond the boundaries of gambling.
Handicapping horse races certainly resides in a similar area of gray,
but the recent legislation bestows upon it special status by stipulating
unlawful internet gambling “shall not include any activity that is
allowed under the Interstate Horseracing Act”. That act, signed into law
in 1978 and amended in 2000, sanctions the transfer of pari-mutuel
wagers between states via telephone or other electronic means.
Here’s what Greg Avioli, acting chief executive of the National
Thoroughbred Racing Association (NTRA) and Breeders™ Cup Ltd., said at the
annual International Simulcast Conference held earlier this year in
Philadelphia: The industry is squandering an opportunity as the only legal
provider of Internet gaming. We have a golden opportunity in our hands.
Avioli’s suggestion was for the industry to get together and create a
single online site to bet the races, which is something that the giant
American based casino companies would aspire to do with online gambling,
in particular poker, if politicians ever get around to being serious
about taming the beast and using it as a legal source of tax revenues
instead of allowing it to run rampant in an unregulated play land.
There is much at stake for perfectly legal companies that have vested
interests in poker, including Harrah’s Entertainment and its incredibly
successful World Series of Poker, a large percentage of participants in
which have ties in some way, shape or from to Internet poker and casino on line sites.
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