Gambling News - June 2005 Edition

"Don't Bet on Web Gambling Crackdown, Experts Say"

Chances of law enforcement agencies going after online gambling companies approach those of being hit by lightning.

“It’s all a bunch of hot air because of the unresolved legal questions regarding the online gambling industry!” This is what experts on the Internet gambling industry are saying about Washington’s threats to clamp down on online gambling businesses. The world’s largest online poker company PartyGaming, discusses the legal uncertainties regarding online gambling in the United States, in its prospectus released earlier this month, and many experts in the industry believe that U.S. law enforcement agencies are unlikely to pursue the company in spite of threats to arrest and prosecute its owners.

According to a business law professor at the University of Buffalo, Joseph Kelly, who has helped other countries draft online gambling rules, the chances of law enforcement agencies actually going after PartGaming or any other owners of online gambling companies are “so remote that the chances approach those of being hit by lightning”.

But the United States Department of Justice maintains that Internet gambling is in violation of several laws that prohibit interstate gambling and promises to prosecute violators. One approach that has already been taken by the Department of Justice in order to prevent Internet gambling sites from successfully operating within the United States, is the pressuring of credit card services like VISA and PayPal into blocking payments to gambling sites. Other media outlets such as Yahoo have declined to run advertisements for online gambling sites. Up to now, law enforcement agencies have been reluctant to go after individual Internet bettors and the measures taken so far by the Department of Justice have not stopped millions of United States citizens from placing wagers over the Internet at offshore Web sites like PartyGamings’s poker web site, PartyPoker.com. Because of the U.S. ban on gambling, PartyPoker.com is based in Gibraltar

Frank Catania, a former gambling regulator for the state of New Jersey who now works as a consultant in the industry, also thinks that the United States doesn’t really have a legal leg to stand on in its fight against the online gaming industry. “I think the Department of Justice is just sending out all these messages to avoid a confrontation where they might have to prove it in a court of law”, said Catania.

Efforts to pass and apply Internet specific anti gambling laws have not ceased, in spite of the fact that such legislation has already been brought before Congress several times and failed. In fact, veteran anti-gambling campaigner, Arizona Republican Senator Jon Kyl is expected to bring another anti-gambling bill this summer. A spokesman for Kyle said that the new bill would be updated to “both warn Congress and reflect the explosive growth of the industry.”

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