Internet Gaming Essay, Research Paper

VIRTUAL VEGAS, SPORTS INTERNATIONAL, WAGERNET, INTERNET

CASINOS, INTERLOTTO and GAMING WORLD are just six of the estimated hundreds of Web sites that now offer gaming-related services over the worldwide WEB, and that number is growing at a consistent rate. Are web users ready to be inundated with digital casinos? What sort of policies and or regulations should be implemented to deal with this? Should there be any? My answer is no, the government should allow people to use the Internet to their liking.

Self regulation is a buzz word often mentioned on the Internet. Some

have asserted that self-regulation not only is the mechanism whereby Internet gaming

should be regulated, but as a practical matter is the only way it can be regulated.

However, will consumers be confident enough to trust individual providers? Are people

ready to deal with what could be governmental regulation of individual web sites which

offer gaming services? Should the state or federal Government try to regulate gambling?

and if the answer is yes, then which branch of the government should be responsible?

There are many legal problems that stand in the way of Internet gaming. The

most pressing two problems are individual state laws and regulations that make

gambling illegal. The second is the federal statute forbidding the use of

telecommunications in the betting or wagering business, 18 USC. 1084.

48 states have some form of legalized gaming through lotteries, race tracks or

actual casino wagering. The idea of casino gaming expansion has been hindered in recent years through non-passage of referendums legalizing gaming in many states. As always there exceptions to every rule. The State of Mississippi has a growing and fairly new casino gaming business. “Moreover, as gaming spread to more and more jurisdictions over the past decade, a public backlash against gaming seems to have materialized. The economic prosperity that certain state regulators hoped gaming would bring did not fully materialize, at least at the levels initially anticipated.”(McGuigan, pg. 4) New Jersey neighborhoods sitting on the outskirts of the casino district in Atlantic City are often cited as prime examples and evidence that gaming does not eliminate poverty, in fact it sometimes contributes to it.

In January 1998, John Russell, a Justice Department spokesman, was widely

quoted as stating, “We have no jurisdiction [to prosecute Internet gambling operators]. The offense has not been made on US soil.” Since then, the government appears to have had a change of heart. “In announcing the first federal indictments against Internet gambling operations in April 1998, both Attorney General Janet Reno and US Attorney Mary Jo White warned against using the Internet to engage in betting or wagering

operations.”(Freeling, pg. 1) The federal Government has also taken its first steps to involvement in public policy decisions regarding gambling. At the request of Senator Paul Simon and Congressman Frank Wolf a federal commission was created “to study the proliferation of gaming in the United States.”(Freeling pg.1)

Even with all of these tough measures, to date no court has ever held that federal

Law prohibits Internet gambling. Instead, law enforcement has attempted by “attacking

conduct that has long been considered illegal in the United States.”(Freeling, pg. 1)

By using an old title aimed at stopping sports betting by means of telephone The US

Government is trying to stop Internet gambling all together.

Title 18 of the United States Code section 1084 makes it illegal to use a

Wire communication facility (telephone lines) in the business of betting or wagering. It

provides, in pertinent part: Whoever being engaged in the business of betting or

wagering knowingly uses a wire communication facility for the transmission in interstate or foreign commerce of bets or wagers or information assisting in the placing of bets or

wagers on any sporting event or contest, or for the transmission of a wire communication

which entitles the recipient to receive money or credit as a result of bets or wagers, or for

information assisting in the placing of bets or wagers, shall be fined under this title or

imprisoned not more than two years, or both.

Much of the media reporting about gambling on the Net has included uncertainties

about whether wagering on the Net is illegal. “On its face, the statute makes it illegal for

individuals to use wire communications for the purpose of engaging in the business of

betting or wagering.”(Barker, pg.4) However most federal laws regulating gambling were developed in response to advances in communication. “Regulations were implemented about advertising a national lottery through the mail shortly after the establishment of a federal postal system.”(Janower, pg. 4) The same thing happened when radio and television were introduced. Because the Government can not keep up with emerging technologies current federal gambling laws were not drafted to address communications over the Internet.

The problems that exist are based on how to enforce these laws. For example, certain cases have interpreted that the statute applies to the business operator, the person conducting the betting or wagering business, and not to the individual bettor. “On the other hand, anyone who professionally engages in making bets or wagering and who engages in any use of interstate facilities are guilty and can be criminally prosecuted. Also, cases have distinguished between using wire communications to transmit in interstate or foreign commerce bets or wagers and in simply receiving bets, which has been held in some cases not to be a violation of the Act.”(Wiggins, pg. 3) The wording of section 1084 could make for a strong argument that it is referring only to sports related gambling. The word sporting seems to come before the word “event” and “contest.” If this were true, the government would have to be limited to prosecuting only sports related bets. “In several cases construing section 1084, a defendant was charged with a violation of the statute for non sports related gambling, but in each case the charges were dismissed on other grounds. In cases where conviction occurred, sports’ betting was the only activity contested. Thus no reported cases have applied this section to non sports related gambling. If this is the case on-line casinos would seem to be free and clear.

There are other statutes on gambling that further confuse the issue. Section 1955 (18 USC 1995) – Makes it a crime to conduct, finance, manage, supervise direct, or own an illegal gambling business. In that statute congress defined gambling very broadly to

include pool-selling, bookmaking, maintaining slot machines, roulette wheels or dice

tables, and conducting lotteries or numbers games. Congress did not address any of

these issues specifically in 1084, so does that mean that 1084 is meant to cover only

sports betting? In 1997 Senator Jon Kyl of Arizona was the sponsor of the Internet

Gambling Prohibition act. This bill would extend the federal criminal code to prohibit

almost all Internet gambling. The question seems to be does this bill go too far by banning all gambling, some of, which is legal in many states, like lotto or bingo. Bingo is even played in some churches. Tom Bell director of telecommunications studies at the Libertarian Cato Institute makes an interesting point: “The states position is hypocritical. Turning to the feds for legislation, states claim to be advocates for consumers, but they are also seeking to ward off competition. States are in the gambling business (i.e. lotto, casino etc.) and they don’t want competition from the Internet.”(Bell, pg. 6)

This whole issue comes down to whether or not we as people need the

Government involved in Internet gambling. The World Wide Web is a vast uncharted new territory that until recently has remained largely unregulated. The fact that it does not exist in any physical form, with no specific boundaries makes it even more difficult.

Should the government try to regulate Internet gaming? Absolutely not. The federal government has already shown it has no idea how to deal with this issue by trying to apply a law that was written 40 years ago. There is no way the government could regulate gambling on the ‘net because it is to much to deal with. No matter what the government tries to do, it won’t matter because as long as people want to gamble, the will continue to find ways to do so.

Analysis of house Vote on the Internet gambling Prohibition Act (July 23, 2000) Tech Law Journal Author not available. Retrieved from the World Wide Web Oct.. 17 2000. Http://www.techlawjournal.com/crime/20000723.asp.

This article gives an in-depth look into discussions in congress and the breakdown of the vote, democrats versus republicans on the issue. It takes a look at how states voted, compares legalized gambling states versus non-gambling states, North versus south versus west etc. I thought that this article was important because it gives you a more in-depth look into how this country feels. By comparing senators votes and using them as a representation of their people it gives us a better feeling into how people feel.

Barker, Garry (Aug. 16, 2000) Internet regulation Doomed. Retrieved from the World Wide Web on Oct. 17 2000. Http://theage.com.au. This article is actually about how attempts in Australia to regulate gambling sites and punish people who use them have proved unsuccessful. The author show who US legislators are headed down the same path.

Bell, Tom W. (Mar . 1998) Internet Gambling–popular, inexorable, and (eventually) legal. Retrieved from the World Wide Web Oct.. 17 2000. Http://www.zolatimes.com/V3.11/Internet__gambling.html. This article is written by the same man, Tom W. Bell, Who, in another article I used, testified in front of a senate subcommittee on why it is futile to regulate Gambling on the Internet. I consider Mr. Bell to be quite an expert in this field and in this article he covers all the main issues. From consumer demand to the anti gaming lobby to the different laws trying to be inacted, it is a good starting point for information on this subject.

Bliley, Thomas (Aug. 1998) Internet gambling. Retrieved from the World Wide Web on Oct. 17, 2000. http://www.traditional values.org/internetgamb.html. I only included this article because I wanted to show what kind of people were behind the regulation push. This is actually a letter written on behalf of a number of churches urging regulation of the Internet.

Bloomberg News (Nov. 3, 1999) House subcommittee gives green light to gambling ban. Retrieved from the World Wide Web Oct. 17. 1999. Http://news.cnet.com/news/0-1005-202-14287123.html. This article is brief in nature, but critical in the development of the Internet gambling issue. It talks about the committee’s vote, why they voted how they did and what their thinking was. To me it shows what the narrow minded beauracrats in Washington are thinking.

Cannon, Chris (May, 1999) Say no to the regulation of the Internet. Retrieved from the World wide web on Oct..17, 2000. Http://www.nointernetregulation.com. This site is actually more like a Public service announcement. You can sign up to get newsletters from this group ass well as signing up 10 of your friends.

Dean, Lisa (July 11, 2000) Bet on Internet gambling. Retrieved from the World Wide Web on Oct.. 17 2000. Http://policy.com/news/dbriefarc24.asp. In Ms. Deans article she puts forth several convincing arguments on why gaming on the Internet should be legalized.

Edwards, John G. (Sep. 1998) Gambling experts see Future for Net Betting. Retrieved from World Wide Web Oct.. 17, 2000. Http://www.lvrj.com/lvrj_home/1998/sep-28-mon-1998/business/8287844.html This article published in the Las Vegas Review-Journal gives an outline for gambling on the Internet in the future. Specifically it talks about how the rest of the world is moving ahead, while the US continues to fight it. It deals with the possible money that the US is missing out on, and how we as a country can run benefit and manage gambling on the Internet.

Freeling, Kenneth A. Internet Law (Mar. 30, 1998) National Law Journal. Retrieved from the World Wide Web Oct. 17, 2000. Http://www.nlj.com/freeling.00023.html. An interesting article detailing court cases brought against individuals or companies. It covers the issues and points out, rather ironically, that to date no court has upheld any charges as illegal.

Internet Gambling (Jan. 1999) No Author. Retrieved from the Internet on Oct..17 2000. Http://policy.com/news/dbriefsarc13160.html. An in depth look at gambling on the Internet with the focus being on laws. A great article to find out about what the different laws and acts are that government is trying to use to regulate gambling.

Jonower, Cynthia J. Gambling on the Internet (June 1996) Retrieved from the World Wide Web Oct. 17 2000. Http://www.bcg.com/infopap/janower.html This paper explored the social and political effects of gambling on the Internet and what is being done within the existing framework to try to stop it.

Kolasky, Bob (July 14, 2000) An unconventional debate on Gambling. Retrieved from the World Wide Web on Oct. 17, 2000. Http://policy.com/news/dbriefarc1453.asp. Mr. Kolasky has this article on the web for the sole purpose of starting a discourse on the topic. He makes a lot of comments that I am sure will stir some people up.

Goodlatte, Bob. Internet Gambling Prohibition Act of 1999 (H.R. 3125). Retrieved from the World Wide Web Oct.. 17 2000. http://www.house.gov/goodlatte/hr3125talk.html

A complete look at the Internet Prohibition act of 1999 by the man who wrote the bill, Virginia Congressman Bob Goodlatte. This article provides a good look at what the house is trying to do. For me it also shows why congress is having such a hard time with the issue.

Hammond, Michael E. (April 17, 2000) Internet Gambling Regulation. Retrieved from the World Wide Web Oct. 17 2000. Http://www.geocities.com/mehamm0/netgambling.htm

This article is similar to some of the others with one notable exception, which is why I included it. It gives you an feel for what it is like to wager online. It takes you inside the experience and makes you almost feel like you are there. It also deals more with sports wagering which is also a hotly debated Internet gambling subject.

House Banking Committee Approves Internet Gambling Funding Bill (June 29, 2000) Tech Law Journal. Author not available. Retrieved from the World Wide Web Oct. 17 2000. Http://www.techlawjournal.com/crime/20000629.htm

This article shows how our manipulative Govt. Is trying to stop gambling by trying to make it illegal to use checks, credit cards, and electronic funds transfers for Internet gambling. It provides an overview of how the financial side of Internet gambling works. It also shows how desperate and dumb our Govt. Must be to try to stop gambling by going about it in this futile effort.

Interactive Gaming Council. Statement of Sue Schnider, Chairman of the Interactive Gaming council Provided to the Senate Judiciary Committee on Government Information Technology and terrorism. (Mar. 23, 1999). Retrieved from the World Wide Web Oct..17 2000. Http://www.igconcil.org/opinion/kyl0323.html. The IGC is an international trade association representing interactive gaming operators, suppliers and consumers, and in my opinion presents the strongest arguments for what the framework for regulation of gambling on the Internet.

Kubiszyn, Margret S. Regulation of Internet Gambling in the United States. Retrieved from the World Wide Web on Oct..17 2000. Http://www.gigalaw.com/articles/kubiszyn-2000-09-p3.html. This is a short article about the National gambling impact study. It tells the details of the study, what the commission studied, and the determinations they made because of the study.

Lynch, Timothy (July 23, 1998) Gambling regulation belongs to the states. Retrieved from the Internet Oct. 17 2000. Http://catoHttp://cato.org/daily’s/7-23-98.html. This article gives good reasons why regulation of Internet gambling should be left up to the states if it is deemed necessary for regulation at all.

Liebowitz, Wendy R. Senate Bans Most ‘Net Gambling; Many Bet on Poor Enforcement (August 10, 1998) Retrieved from the World Wide Web Oct.. 17 2000. Http://www.njl.com/leibowitz/00342.html An article about Senator Kyl’s proposed Internet gambling prohibition. The article deals with how the act is to be interpreted, and why many experts feel that it will be unenforceable.

McGuigan, Philip P. Stakes are High in Battle To Bar Internet Gambling (Nov. 3, 1997) National Law Journal. Retrieved from the World Wide Web Oct.. 17 2000. Http://www.nlj.com/Mcguigan/320114.html. The article deals with what is at stake in terms of money. The article talks about profits generated by on-line casinos and discusses hypothetically how much money could be made through taxation of these sites.

Quinn, Gene (June 21, 2000) Internet Gambling Regulation Efforts. Retrieved from the World Wide Web on Oct..17 2000: http://www.i-depth.com/P?v/vv07342.frm.inetsum2000.msg/52.html. This short article deals with the latest ways for the US Government to try to fight the losing battle against wagering on the Internet. It also shows some of the consequences on other legal business like off-track betting on horse racing.

Raysman, Richard (Aug 12, 1997) Cyber-casinos: Gambling meets the Internet. Retrieved from the World Wide Web Oct. 17 2000. Http://www.nylj.com/raysman.23/P/html. Breaks down federal and state regulation and further breaks down state regulations. Deals with a few of the court cases that have been tried, and discusses the outcome.

Rickard, Mark W. (Mar.1996) Virtual Casino. Illegal? Retrieved from the World Wide Web Oct. 17 2000. Http://www.umlaw.edu/rickard.html This paper was written for an Internet and Law seminar at the University of Miami. It lays down in plain terms the legalities of gaming on the Internet and what is being done to try to prevent it.

Sieberg, Daniel (Sept 1, 2000) Retrieved from the world wide web Oct.. 17 2000. Http://cnn.com/2000/tech/computing/09/01/state.of.the.net This article states clearly and emphatically that it is useless for the government to try to regulate the Internet because it is almost impossible.

Sample, Herbert A. (June 19, 1999) Gambling report urges better regulation. Http://www.webarchives.net/gambling_report_urges_better_reg.htm. I included this article because I felt it was important to see the other side of the argument. This is a complete overview of why some people feel that Internet gambling should be regulated.

Staff Editorials (July 19, 2000) News, oped page. Retrieved from the World Wide Web Oct..17 2000 http://www.studentadvantage.com/article/0,1075,c8-i84-t0-a41113,00.html. I included this article because I felt it was important to see what people my own age felt about the subject. It also offers some interesting perspectives on what may happen to Casinos as the Internet revolutionizes the way we gamble.

Willams Dewayne (Nov 25, 2000) Personal communication–interview

Xamax Consultancy Pty. Ltd. (1998) The Technical Feasibility of Regulating Gambling on the Internet. Retrieved Oct.. 17 2000 from the World Wide Web: http//www.anu.edu.au/people/Roger Calrke/II/IGambleReg.html– A complete an thorough look at all aspects of Internet gambling, from what it is to the laws and regulations surrounding it. This was the most complete document I found on gambling on the ‘net

Gambling regulation, Not Ban–Associated press 1998–from the World Wide Web Author not available–Retrived from the Internet Oct.. 17 2000 Http//more.abcnews.go.com/sections/business/net_gambling0204/index.html–A quick news article that focuses on the fact that jobs are being lost to other countries because the government has decided to enact a “prohibition” on Internet gambling.

Internet Gambling: Prohibition v. Legalization(1998)–Testimony of Tom W. Bell, Director, Telecommunications & Technology studies the Cato institute–Retrieved from the World Wide Web Oct17. 2000–Http//www.cato.org/testimony/ct-tb052198.html–Testimony by Mr. Tom W. Bell on why Internet Technology is making it impossible to enforce a “prohibition” against gambling on the Internet.

Betting No End to Internet Gambling(spring 1999). Journal of Technology Law and Policy–Retrieved from the world Wide Web Oct. 17.2000. Http//journal.law.ufl.edu/~techlaw/4/olson.html–Another in-depth and very informative look at Internet gambling, done by law student to again dismiss the idea of regulating gambling on the Internet.