Online gambling not ready to fold

Jul 25, 2006 4:54 AM

Millions of Americans do it, even though the Justice Department says they’re supporting an illegal business.

Major corporations look for ways to profit from it, even though Congress is considering banning it.

The center of attention is Internet gambling, a $12 billion a year industry that never ceases to polarize politicians, players and proponents who often collide head-on.

Currently, the House is waiting for the Senate to act on a bill it approved that would cut off Americans’ ability to place sports bets, play poker and otherwise bet online.

In the meantime, the Department of Justice has indicted one of the Internet’s largest off-shore sports books, BetOnSports.

Whether it’s legal or not, there are an estimated 4 million to 7 million Americans who gamble on the Internet, with poker driving the latest surge.

A gambling association survey has shown the online participants are younger, more affluent and better educated than their counterparts who enter actual buildings containing card tables, roulette wheels and slot machines.

Flouting of the government prohibition on Internet gambling and confusion over what’s permitted are "typical of what happens when society changes faster than the law changes, both because of technology and changing social acceptability," said I. Nelson Rose, a Whittier College law professor who specializes in the gambling industry.

Rose added that the 1961 Wire Act used by federal authorities to characterize Internet gambling as illegal was passed before the computer age, before any state had a lottery and before casinos had expanded beyond Nevada.

Whether or not the Wire Act withstands challenges, industry analysts believe rapid growth of Internet wagering will continue.

And if consumers continue to ignore prohibitions, then the issue of legalization will come to the forefront.

Right now, online proponents know that it’s too soon to put legalization up for a vote in Congress. Instead, they’ve called for a year-long study to determine the feasibility of regulation.

With controls in place, advocates say, it makes sense to allow some Internet gambling in states where card and casino games are legal in person.

Whatever elected officials do on Internet gambling in the near future, it’s clear the issue will not go away. Christian Capital Advisors, a gambling consulting firm, estimates the volume of Internet gambling has been doubling every two years in this century and could double again by 2010.

"This industry is not in its infancy, but it’s maybe just at the toddler stage," company vice president Sebastian Sinclair said. "Irrespective of what’s happening in Washington, the rest of the world is moving in a different direction."