Us cracks down on online gambling

[arpan911]

JULY 19, 2006

The House of Representatives passes a new law and the BetonSports CEO is indicted.

By Ben Macklin
American comic Arthur Baer once said that "betting is pretty much like liquor: you can make it illegal, but you can't make it unpopular." This is very much the case with online gambling in the US where it is essentially illegal to set up an online gambling business, yet the majority of worldwide revenues are generated from US-based Internet users. eMarketer estimates that online gambling revenues worldwide totaled $10.9 billion in 2005, up from $8.5 billion in 2004.



Despite the fact that the Department of Justice has explicitly stated that it is illegal to set up an online gambling operation in the US, and by extension to advertise online gambling, confusing and sometimes conflicting state and federal laws have left room for a range of legal interpretation. However, there has been a renewed push from the government to curb online gambling activity.

First, a new bill was passed in the House of Representatives, aiming to limit Internet gambling by making it illegal for US-based banks and credit card firms to make payments to online gambling sites. It is unclear whether the Senate will pass the bill into law.

Second, the CEO of BetonSports, David Carruthers, was detained on July 17 and, along with several others from the company, indicted on charges of racketeering – running an illegal activity to make money.

BetonSports is a publicly traded company in the UK. It has gambling licenses in the Caribbean, Europe and Asia and its head office is in Costa Rica. This is common set up for companies that take bets from US consumers so this will be an important test case for the entire sector. The stock market reacted quickly, with shares of all the major online gambling companies suffering significant falls on July 17.

According to a recent survey by Harris Interactive, the majority of US Internet users believe that online gambling should remain illegal because there is no effective way to regulate or control it.



This, however, has not been the approach in the UK, where the government continues to create legislation to regulate the online gambling sector, rather than banning it. History, along with the wisdom of Arthur Baer, suggests that this may be a more workable approach than complete prohibition.

For more information on online gambling see eMarketer's Online Gambling report

[astros99]

Dang, I heard about this too. I really don't like this cause I used to be a fan of online poker. But I guess not anymore. Personally I like it better cause you can choose how you want to play and all that. Like what I did is I would go in a table with a less number of people so I would have more of a chance of winning. But oh welll. Farewell online poker.

[mini_0]

Well there is something really similar going on in china too . The drive to flush out internet gambling in China is a combined effort of the Ministry of Public Security, the Ministry of Culture, the Ministry of Information Industry and the State Press and Public Administration."The prevalence of online gaming has ruined the online environment and harmed young people's growth, which runs against the policy of building a harmonious society," the circular stated.