“Blackjack and poker have a very human element that’s lost online. — notably sports betting.
But analysts are mostly rolling with Christie and the casinos. Chris Christie validated the vice in the waning weeks of 2013, saying he hoped to rake in $1 billion in casino revenues this year, of which the state will collect a 17 percent tax.
- Geoff Freeman, president and CEO of the American Gaming Association
Not everyone agrees with the odds. market could be worth as much as $9 billion in the coming years as other states, including California, legalize online wagering.
. “That’s where I see the huge potential in online gambling, and I reckon the U.S. They play against the house at Virgin Casino, and they can finance their wagers with debit cards, credit cards, or in person.
Prohibition failed – again
Last month, the president and CEO of the American Gaming Association testified before Congress and urged legislators to repeal their 7-year-old ban on Internet gambling.
Freeman said the Department of Justice has relaxed its views toward online gambling since 2011, and this could open up even more opportunities in the U.S. “The federal government has tried the prohibition approach – specifically the Unlawful Internet Gambling Enforcement Act of 2006 and the Wire Act – and through multiple Justice Department crackdowns on offshore operators as well.”
Mega-entrepreneur Richard Branson’s Virgin Group is the latest entry in online gambling, teaming with the Tropicana Resort in Atlantic City and online game maker Gamesys to bring online poker, blackjack and slots to New Jersey this week. market research firm H2 Gambling Capital, which focuses on the gaming industry, predicted about $300 million for New Jersey’s online casinos — or about $45 million in tax revenue, according to the New York Times. But new laws across the nation are rolling the rules back — and lawmakers think they’re holding a royal flush.
Globally, the business is even more lucrative. Virgin could be holding a full house, but it could also fail before the flop.
“It’ll be interesting to see how this plays out,” said Laurence DeGaris, associate professor of marketing at the University of Indianapolis and an expert in Internet culture.
“Last year, before a single state authorized legal online gaming, Americans spent nearly $3 billion on illegal, unregulated offshore gaming sites. In online casino gambling, it’s about the game more than the bet.”
To prevent unauthorized access, Virgin Casino physically locates gamers’ cellphones periodically. U.K. “If we are unable to determine that you are in New Jersey, you will be unable to play on Virgin Casino,” the site notes. H2 said the industry was worth $33 billion in 2013, with $4.5 billion coming from mobile gambling on iPads, iPhones and smartphones.
“Those from other states can play, but they cannot wager,” Fenton said. If your phone is off, or if you’re too near state borders, you may not be allowed to play.
“There will be many games to play online in New Jersey,” Fenton told FoxNews.com. Nevada and Delaware also began offering some online gambling last year, but New Jersey is the first state to “fully” legalize it, said Lee Fenton, the chief operating officer of Gamesys.
“Prohibition simply does not work,” Geoff Freeman told a House panel on Dec. 10. Not just poker.”
And New Jersey isn’t alone; eight other states have bills in the works that will allow Internet gambling as well. will catch up to the rest of the world and allow it at some point.”
Players must be at least 21 years old, and either reside in New Jersey or be in the state when they place their bets. Gov. That doesn’t translate online,” DeGaris told FoxNews.com. To put that into further context, Americans accounted for nearly 10 percent of the entire $33 billion worldwide online gaming market,” Freeman said.
Legalizing gambling across the U.S.
What happens online, stays online
Six other firms, including popular companies like WSOP.com and Ultimate Poker and other casinos like Caesars and the Golden Nugget, participated in the “soft play” launch of online gambling in New Jersey in November, the state’s Department of Gaming Enforcement Director Dave Rebuck said during a recent conference call.
Congress banned online gambling in 2006. Others predict the overall U.S. “Blackjack, slots. will generate – in addition to tax revenue from the proceeds at casinos – approximately 22,000 new online gambling-related jobs, Freeman testified.
Many Americans simply ignored the ban, he noted, as the country did during Prohibition in the ’20s.
“In sports gambling, it’s about the bet,” DeGaris said. “The technology is rolling out this week.”
‘Last year, before a single state authorized legal online gaming, Americans spent nearly $3 billion.’
“Slots and roulette are very visceral games, lots of bells and whistles
The original version of Kyl’s bill failed most of these tests.
Does the seeming invincibility of online gambling make it an enticing business? Jason Ader of Bear Stearns, urges caution.
First, legislation should treat physical activity and cyberactivity in the same way. Says Sinclair of Christiansen/Cummings: “You are going to feel more comfortable wagering with a Hilton than you will with Joe’s Casino.”
But over the last several months, at least some traditional casinos have pursued the time-honored strategy of joining an Internet gambling trend that they can’t beat. Almost all online gambling sites work the same. Would-be wagerers open an account with a credit card, although some sites also accept cash and cashier’s checks. The Internet is presently unregulated and we support a federal law regulating Internet gambling.”
So how is it that these companies appear to operate legally, but a dozen Caribbean cowboys found themselves under felony indictment?
Finally, the DoJ believes that any federal law must recognize that the Internet is different from other communications media: It’s a multifaceted communications medium that allows for both point-to-point transmission between two parties (like the telephone), as well as the widespread dissemination of information to a vast audience (like a newspaper). (The company’s Indian casino and Web-development divisions make more.) “This is the really exciting point, because I know where it goes from here,” Speer said in an interview. Aruba, for one, is refusing to extradite any indicted individuals to the U.S., and thus far the U.S.
The prosecutors’ focus on sports bets appears to stem from legal precedent in the law they relied on. Although it uses a CryptoLogic template similar to several other online casinos, Kennyrogerscasino.com may be unique in letting bettors wager as little as a penny at a time.
Similarly, the Las Vegas-based public company American Wagering, owner of Leroy’s Horse and Sports Place in Nevada, also operates a sports gambling site located in Canberra called MegaSports (www.megasports.com.au). Justice believes that any legislation addressing criminal misuse of computers or computer systems (including the Internet) should have three vital characteristics. As Timothy L. Kyl introduced a revised version earlier this year, removing some of the more onerous and hard-to-enforce provisions. His equal partner is Australian tycoon Kerry Packer of the Crown Casino in Victoria.
But the growing acceptance of online betting and the Internet’s inherent ability to shatter jurisdictions bring the inconsistencies of American gaming law to a boil.
If such gamblers are not satisfied by options available to U.S. But following a 1997 indictment, the state of Missouri settled a suit against the company and its president, Michael Simone, for about $35,000. White’s hesitancy suggests that the law may not be as solid as she thought when she indicted.
That partnership leads many observers to believe that an online casino – using Microsoft platforms, of course – is in the works.
Running an online casino carries all the usual challenges of Internet businesses, from low click-through rates to servers that fail. (However, an HBO sports program attempted to locate one of these ventures in Aruba, and ultimately found that the genuine server was in a residential neighborhood in Bethlehem, Pa.) And the Caribbean nations would like to keep their haven status. “Federal legislation will make it difficult but not impossible for Internet gamblers in the U.S. “The telephone is being used to facilitate these wagers and I believe the government has a solid case,” explains Tony Cabot, a Las Vegas-based gaming lawyer and author of a book on Internet gaming. 474, introduced into the Senate by Arizona’s John Kyl in 1997 as the Internet Gambling Prohibition Act. In 1997, published reports put the total number of operating online casinos at 15. Packer is a man with a voracious gambling appetite. Estimates range from $650 million to $1 billion a year, worldwide – a tiny fraction of the amount spent on more traditional formats.
Nonetheless, some experts think the case could be made to stick.
Gambling is as at least as old as Christianity (that is, if Ben Hur can be trusted). The Wire Act obviously has no mention of wagering over the Internet. Legislators have considered enlisting Internet service providers to patrol for undesirable sites, although Internet gambling insiders consider that proposal dead on arrival. Tony Cabot, an attorney specializing in gaming issues, says flatly, “When you see Kerry Packer get together with Microsoft, you have to believe there is a future for this type of wagering.”
You might think that the prospect of competing against the likes of Microsoft would terrify a $20 million company like Inland. “Think about what would happen to Wal-Mart (WMT), General Motors or Microsoft if these companies had to continue to dodge federal roadblocks to access their customers,” says Sebastian Sinclair, senior associate at Christiansen/Cummings Associates, a management consulting firm. In January, MegaSports began taking Internet bets from Australians; it expects soon to allow global gambling on sporting events. In 1998, the Senate passed, by a large margin, an amendment prohibiting Internet gambling, but that bill died before becoming law. In most cases, this means operating out of Australia. At one point, Interactive Gaming looked like it could be an industry leader.
Today, Americans spend some $600 billion a year on legal gambling, making it by far the favored national pastime.
But even if Congress comes up with the best-crafted legislation in history, there are significant factors beyond its control. About 2,000 years later, Bugsy Siegel took the concept a step further and built the Flamingo Hotel in the desert town of Las Vegas. FBI agents placed bets on games – uniformly National Football League matches, although many other options are available – and followed up, whether they won or lost. Attorney White has proceeded slowly and quietly. The defendants, many of whom live abroad, were threatened with up to five years in prison and $250,000 fines. (The company did not respond to repeated requests for an interview.)
Group calls for regulation of Net gambling
For years, another barrier to the growth of Internet gambling has been strong opposition from those most threatened by gambling sites: legal American casinos. Blackjack players can very easily count cards, or even consult odds charts; the Kennyrogerscasino.com site actually has a printable chart showing the best strategy for every possible hand of blackjack. Why should it be legal to bet online on a horse race in another state, but not legal to bet on a basketball game in one’s own state? If Native American tribes can establish new, legal, physical places where adults can gamble, why shouldn’t someone be able to do the same in cyberspace?
The office of U.S. “Since there are no controls at present regarding Internet wagering, I would urge investors to shun these firms at present,” he says. citizens, it will be increasingly tempting for them to turn to locations abroad. In the ’70s, Atlantic City legalized casino gambling; in the ensuing decades, state lotteries, Indian casinos, gaming ships, offtrack betting parlors and card clubs have sprouted across the landscape. “Ultimately, Internet gambling operators are selling a product. attorney for the Southern District of New York, indicted 14 managers of six Internet companies for offering gambling on their sites.
Prosecutors focus on sports betting
Intriguingly, though, all the bets that make up the U.S. For decades, Vegas was about the only legal option for gamblers. Anyone over the age of 18 can set up an account with Centrebet and place money on a variety of worldwide sporting events, including U.S. Even the precise number of online casinos is hard to calculate. Her higher-ups in the Justice Department appear to agree. The American Gaming Association, a trade group of gaming firms, maintains this view regarding online wagering: “The industry has been state-regulated and we think it should remain that way. Failure to account for that specificity in legislation could stifle the Internet’s growth or chill its use as a communications tool. has had little cooperation from any other nation. And for sports bettors – who make up a majority of online gamblers, according to industry insiders – the ease of using cyberbookies can’t be beat. One Australian state, Queensland, is already awarding licenses for online gambling, and others may follow soon. Passed during the term of crime-fighter Attorney General Robert Kennedy, the law was intended to outlaw betting over telephone lines. They almost always include slots, blackjack and video poker, but many sites carry more exotic games, from baccarat to pai gow. That figure exaggerates the size of the Internet gambling sector, since some companies operate more than one online betting parlor. That may suggest that, as some legal observers have argued, the 1961 federal Wire Act is too old and too loosely written to prohibit online gambling. He claims Inland’s Internet gambling business went slightly into the black in March, on annualized revenues of about $1 million. A Ninemsn spokesperson says that the site does not now offer online gambling and would not comment on future plans. “And it is possible that records could be subpoenaed of various banks where these companies maintain accounts.”
Is Microsoft betting too?
The potential action is too compelling for even the largest tech tycoons to resist. “I use the service because it’s convenient and I have access to it when I want,” says one online gambler. According to an analysis by Sue Schieder of Rolling Good Times, the online gambling magazine, the new legislation would not punish the casual bettor. Their case is based on the 1961 Wire Act. Bets generally range from $1 to as much as $300.
But a hard-core base will continue to turn to Internet betting for its clear advantages. Today, a roster on one “gambling portal” site lists well over 200. attorney’s case involved the casinos’ sportsbooks. But they say the more bettors, the better. Says Opel, “Bringing in the big names and established companies only adds credibility and visibility to what we’re already doing.”
Is it legal?
A few hurdles have to be cleared before such ventures can take off – beginning with the federal government. Casino games are available on a site or via downloadable software. I’ve not had problems being paid.”
Internet Gambling Worldwide, Past and Future
More than a year later, however, no cases have come to trial, and nine defendants have accepted plea bargains for state misdemeanor charges with no jail time.
It’s not because they operate in any fundamentally different way. college and professional sports. O’Brien observes in Bad Bet, his comprehensive account of America’s gambling industry, “Judging by dollars spent, gambling is now more popular in America than baseball, the movies and Disneyland combined.” . The vast majority of customers will satisfy their demand for commercial gambling through less onerous and risky alternatives, such as lotteries, bingo, pari-mutuels and casinos.”
One major barrier to profitability is the law. But as more and more traditional firms become involved, the consumer will look for the brand name. to gain access to offshore sites,” says Sebastian Sinclair of Christiansen/Cummings. The minimum amount to begin an account varies. In a highly publicized March 1998 “raid,” Mary Jo White, the U.S.
All the sites indicted by the U.S. For one thing, gambling from one’s home allows for a variety of techniques that would get one tossed out of a regular casino. attorney’s office theoretically operate out of the Caribbean. Even the firms that have enjoyed some stock-price popularity – such as Youbet.com – have shaky fundamentals.
Second, legislation should be technology-neutral. One of Microsoft (MSFT)’s less-publicized adventures is Ninemsn, an Australia-based Internet service to which Bill Gates has pledged tens of millions of dollars.
Take Interactive Gaming and Communications, another publicly traded company, located in Blue Bell, Pa. The Standard obtained a Department of Justice analysis of the bill S. But according to Inland CEO Don Speer, elusive profits need not be one of them. Like the Communications Act passed in the 1930s, technology has now leapfrogged the law. That makes for an Internet gambling environment too porous for U.S law enforcement to plug. Inland, for example, operates two Web sites in addition to the one bearing Kenny Rogers’ likeness: Casinoaustralia.com and Goodluckclub.com. The Justice Department doesn’t think that online casinos (including those that offer gambling on sports events) can legally conduct business in the United States, even if they are based in places where gambling is legal. If an activity is prohibited in the physical world but not on the Internet, the Internet becomes a safe haven for that criminal activity. In November 1998, for example, a division of Hilton Hotels acquired the company that runs Centrebet, a Web and telephone sports-wagering system based in Australia (www.centrebet.com.au). “I wager on football games and usually bet in the neighborhood of $1,000 every weekend. “We get daily reports, and you’ll see these people who spend a couple of hours gambling, and the total amount they bet is like $1.81,” says Thomas Holmes, Inland’s head of technology. Together, these sites have about 4,300 registered customers in 96 countries around the world.
The amount spent on Internet gambling is harder to calculate. But the travails associated with fending off lawsuits have essentially put the company out of business. Legislation tied to a particular technology may quickly become obsolete and require further amendment. … If, on the other hand, an activity is in the physical world – betting on horses, or casino betting with Indian tribes – it becomes subject to federal criminal sanction when it occurs in cyberspace. Nor would it prohibit online fantasy sports leagues, online lotteries in states where they are legal, or online betting on any live horse race where it would otherwise be lawful to wager
“We call on all of our fans and Tennessee supporters to let their voices be heard in the coming days to show support for this legislation and protect their right to play the games they love,” the company statement said.
Officials in particular have turned their attention to online daily fantasy sports competitions which allow players to draft teams for games lasting just one evening or a weekend, in a turbo-charged version of the original season-long contests.
“Absent legislation specifically exempting fantasy sports contests from the definition of ‘gambling,’ these contests constitute illegal gambling under Tennessee law,” it said.
Tennessee law broadly defines gambling as risking anything of value for a profit whose return is contingent on chance, subject to a few exceptions, the Tennessee attorney general opinion said. The better a chosen athlete performs in real life, the better the player’s fantasy team does.
The opinion from the office of Tennessee Attorney General Herbert Slatery III follows increased scrutiny of fantasy sports from state regulators over the past year, with attorney generals in New York, Illinois and Nevada challenging their legality.
Fantasy sports contests constitute illegal gambling under Tennessee law, the state attorney general said this week in an opinion about a multibillion-dollar online industry that has been challenged legally in several states.
“A person who knowingly engages in ‘gambling’ commits a punishable offense,” Slatery’s office said in the opinion released on Tuesday.. Fantasy sports, which have been popular for decades, allow participants to create fictional teams of athletes from national sports leagues.
Craig Fitzhugh, a Democratic state representative in Tennessee, requested the opinion.
(Reporting by Suzannah Gonzales and Alex Dobuzinskis, editing by G Crosse)
Gambling does not include a lawful business transaction, annual events benefiting nonprofit organizations and a state lottery, according to the opinion.
Slatery’s office, in a three page opinion, challenged the legality of fantasy contests that give players the chance to win a share of a cash prize, which their entry fees help fund.
Top daily fantasy sports companies FanDuel and DraftKings last month agreed to halt their business in New York, betting on a legislative path to make the games legal after a months-long fight.
DraftKings said in a statement it was having “an active dialogue with elected officials” in Tennessee to advance legislation to govern the company’s “skill-based contests”