Saturday, December 30, 2006

The Future of Online Gambling in the US

There will undoubtedly be a percentage of US players who will not be stopped by the ban on online gambling no matter what, but there could be a much larger percentage of players who could or would like to continue playing online. Despite the fact that that online gambling itself, in most cases, does not constitute a criminal act, nevertheless, I do not believe that the vast majority of players fully understand this and the prospect of becoming a “criminal” in order to gamble online is not an option for many, at this point in time. Those who do decide, to hell with Frist’s law, will need to overcome a number of obstacles before they can place a wager online. Firstly, since the IT savvy will realize, that their geographical location can be loosely determined by IP address, they can fool the tracking systems by using numerous anonymizing applications freely available on the market. However, by accessing the online casino by using this method will in all likelihood trigger casino operators anti fraud systems unless the player consistently connects via the same proxy or the casino operator agrees and understands that the player is hiding his/her geographic footprint.I believe that no online casino operator with a brain in their head, who is located outside the US will simply discard the potential of billions of dollars in earnings without making an attempt to reap in some of the rewards, even be it, in a disguised manner in order to cover their backs. Which brings me to the second obstacle, that the online gambler will need to overcome.
Online gambling Banking Methods. With Netteller being in the middle of this mess, the biggest and the most obvious target and having therefore having to withdraw their banking services from online gambling, for their own good. It would be advisable for players to move online gambling banking to Click2Pay and PaySpark who would seem to be incapable of, or possibly disinterested in, implementing the costly requirements of the US gambling laws. I have no doubt that with Netteller being oblidged to leave a huge pile of cash on the table, we will be seeing one or two new institutions taking up the slack in the market.The third and biggest problem the determined US online gambler faces is his/her home address. Unless there is a friend, family member, acquaintance or business connection outside the US then, this is going to be the obstacle that trips up the wannabe US gambler. What is probably going to happen in this case is, and I know it sounds far fetched, rogue and probably a can of worms (but maybe not). Something like A facilitator and supplier of an address outside the US. Possibly a company owned by the “clean” casino who simply connects the actual address details to the alias avoiding the heat from the US government.Many before The Unlawful Internet Gaming Enforcement Act (UIGEA) was passed, had no inclination whatsoever to find a solution to circumvent any laws, but since Mr. Frist and his cronies seem bent on the creation of felons, this is merely a natural progression in thinking for a vast number of previously law abiding citizens and only a minute example of things to come.
It is a sad day when people create laws to create crime, which the vast majority of law abiding citizens do NOT believe should be constituted as a crime. Thus a new watered down way of thinking about crime is born, that only the eventual abandonment of such a law can remedy. (on this point we may have to wait a while though)
It is just a matter of time before a couple of enterprising minds to mull this thing over or recognize this crime/opportunity paradigm for what it is, and in the not too distant future, we will looking at a 200% increase in the internet gambling industry from where it is now,.
I leave with the words of H.S Thompson.“In a closed society where everybody’s guilty, the only crime is getting caught. In a world of thieves, the only final sin is stupidity.”

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Friday, October 06, 2006

Online Gambling and the Unlawful Internet Gaming Enforcement Act

The Unlawful Internet Gaming Enforcement Act.
The U.S. The House of Representatives and Senate, in all likelihood savored the moment they dealt a serious blow to online gambling this weekend, by passing the Unlawful Internet Gaming Enforcement Act, which was attached to the port security bill, that makes it illegal for banks and credit-card companies to do business with online gambling companies. The bill requires the President to be sign it into law within days from now and the general consensus amongst analysts is that, its almost a certainty.

Unlike the version that passed the House earlier this year, the approved legislation does not explicitly outlaw online casinos or poker rooms but does prevent financial institutions from accepting and prohibiting gamblers from using credit cards, checks and electronic fund transfers to settle their online wagers, and does not provide clarification as to whether some forms of online gambling are permitted.

This has very negatively affected the shares on the London stock market that saw billions of pounds in stock value vanish into thin air. Among the big losers were PartyGaming, 888, World Gaming, Sportingbet and who have stopped accepting wagers from citizens within the US. The port securities bill, will affect payment processors such as Neteller, which have assumed the role of middle-man between banks and online casinos.

This bill did NOT in effect make internet gambling illegal. What it did was affect the mechanism by which Internet gambling takes place…and there is some question as to whether or not that will be effective. The prohibition is just an incentive to drive the industry underground.

What led up to the bill being passed?
Numerous congressmen have since about 1999, made reference to a sleazy and unpopular industry, poisoning the minds and the morals of US citizens, further pointing out that online gambling businesses collect millions of dollars in untaxed revenues, and say the proposed legislation is about more than protecting citizens from the evils of gambling. This measure is purportedly to clean up a “serious problem” that exists on the Internet. However, no reference is made to the fact that the majority of internet gambling sites are, legitimate and are licensed in the country in which they reside and monitored by international gambling authorities and yet not much thought is given to the possibilities of regulation and taxation measures, as have recently been implemented in Britain, but instead a 1920’s prohibition mind set prevails amongst lawmakers in the U.S, which if further perpetuated and, if the “history repeats itself” adage rings true, will have a very similar outcome to the 1920’s prohibition. Is this just the “camel sticking its head into the tent” and will online privacy as a whole soon suffer?

It has been suggested the feds will try to use it as a springboard for greater restrictions on unpopular or controversial sites as recently proposed by U.S. Representative Bob Goodlatte. “The Internet Gambling Prohibition Act will give U.S. law enforcement agencies, the ability to force Internet service providers to remove gambling sites from their servers, or to block user access to such sites appearing on other servers.” Goodlatte goes on to say. “We have 700 illegal, out-of-control, unregulated cyber casinos online that are sucking money out of the country, Most of these virtual casinos avoid the tangled web of U.S. state and federal gambling laws by setting up shop offshore in locales such as Antigua and Romania.”

Sue Scheider, who chairs the Interactive Gaming Council was quoted saying. ”If betting online with cash becomes illegal, rogue casinos will get creative, using electronic wallets for payments, says. Because electronic wallets create online identities with debit accounts, tracing the wallet-owner's real identity is more difficult than with credit cards. She adds "It's a privacy issue".

History shows us that when one method of online funding is blocked alternatives spring up to take their place overnight. This law is just asking for an inevitable solution, whether it be the eventual legalization of online gambling due to the goverment's inability to implement or whether it be pushed underground, forcing the normal law abiding U.S citizen to become a "criminal", while in pursuit of a favorite game, hobby or recreational activity which they love, and which has been accepted by millions as a part of normal life and freedom of choice. Either way, online gambling is here to stay, irrespective of lawmakers views on the matter and irrespective their choice of solution, be it amicable and in the interest of taxation, forms of control, internet gambling operators and online gamblers alike or a deliberate attempt to make it go away.

Online Gambling is here to stay, like it or not.