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Online Gambling to become legal?
Offshore Insider!
Online gambling: a wild, unregulated frontier
State and federal agencies use 1963 law to battle new technology
By charles w. kim
Staff Writer
Today’s technology makes gambling easier than ever.
With a couple of clicks of a computer mouse, gamblers can gain access to all the action they would like.
A Dec. 2 report released by the General Accounting Office (GAO) in Washington, D.C., estimates that there are 1,800 Web sites administered from outside the United States that offer online gambling.
"They are very easy to access," said William Jenkins Jr., author of the report for the GAO.
The report, compiled between April and September of this year, was commissioned by several committees of the U.S. House of Representatives to look at how Internet gambling could be restricted in the U.S.
"Internet gambling is a fast-growing industry with estimated 2003 revenues of $4 billion," the report said.
The number of people in the state who gamble online has more than doubled since 1999, according to figures compiled by the Council on Compulsive Gambling of New Jersey.
According to that group, the number of people who called the help line about Internet gambling addictions increased from 0.7 percent in 1999 to 3 percent of the almost 19,000 calls received in 2001.
Jenkins could not say how many minors might be gambling online.
"We didn’t look at that as part of the study," he said.
As more people log on for their gaming action, government agencies are navigating an intricate maze of local and international laws to try and stop the practice.
Internet gambling has been legalized in more than 50 countries and jurisdictions around the world, according to the GAO report.
Because many operations are based offshore, the current legal framework surrounding the issue is very complex.
In many instances, a 1963 law is used to prosecute companies for operating across state lines. Known as the "Wire Act," the federal law prohibits gambling businesses from using interstate or international wires to knowingly send or receive information that would allow a bet to be placed, according to the report.
The report said that this 39-year-old law was designed to combat bookmaking on sporting events. However, many Internet gambling sites are not limited to betting on sports.
While preparing the report, the GAO surveyed 162 sites to determine the types of gambling offered.
The report estimates that between 73-86 percent of the sites surveyed were virtual casinos while half offered betting on sporting events. About 20 percent offered betting on dog and horse racing, and only about 7 percent offered some kind of lottery.
According to the report, this combination of methods of gambling has created conflicting case law.
While the 1963 law and others have been adequate for prosecuting those administering the sites, there are no specific federal regulations pertaining to Internet gambling.
Claudia Farrell, a spokeswoman for the Federal Trade Commission, said it is up to each state to determine the gambling regulations.
The GAO report said that five states, Illinois, Louisiana, Nevada, Oregon, and South Dakota, have enacted laws specifically prohibiting certain types of Internet gambling.
Kerry Hand, a spokeswoman for New Jersey’s Law and Public Safety Division of Gaming Enforcement, said online gambling is illegal in the state.
"We are not taking the position of it being right or wrong. It is illegal in the state and we are treating it as such," Hand said.
According to Hand, state law determines that gambling takes place where the gambler is, regardless of the physical location of the operation.
Her agency and the Division of Consumer Affairs have filed civil lawsuits against several online gambling operations under this law.
In October of last year, suits were filed against eight businesses for allegedly running illegal sports bookmaking operations via the Internet or telephone.
According to Hand, investigators were able to log on and place bets on sporting events taking place across the country.
"The citizens of New Jersey need to be aware that these sports-betting operations are not regulated and they are illegal," former agency director John Peter Suarez said in a press release at the time the suits were filed.
Hand said the agency was able to settle two of the suits in June, with the companies promising to block wagers from or payments to New Jersey residents.
Credit card companies are having an easier time slowing the growth of Internet gambling, according to the GAO report.
The report said that many of the larger companies are now blocking gambling sites from making transactions on their credit cards.
One reason for the cooperation, the report said, is that some debtors use the excuse that the gambling was illegal and therefore they do not have to pay for it.
Hand explained that Internet gambling can only be made legal in this state by a public referendum.
The last such vote was taken in the seventies and allowed casinos in Atlantic City, according to Hand.
Resorts International was the first casino to open in New Jersey in 1978.
Hand said that if voters approved Internet gambling, the agency would need to create rules and regulations for it.
"We would have to be prepared to take steps to legalize it," Hand said.
"These [court] settlements are an important step in protecting the citizens of New Jersey from the dangers of gambling on unregulated Internet Web sites that are not held to the stringent regulatory standards of our Atlantic City casinos," said the acting director of the agency, Thomas Auriemma, in a June press release.
While no regulations for Internet gambling exist in New Jersey, the state does regulate gambling at the horse tracks and casinos within its borders.
According to the gaming enforcement agency, there are currently several bills before the Legislature dealing with Internet gambling.
One of those bills calls for the formation of an Internet Gaming Study Commission that would consist of legislators, officials of the executive branch, and members of the public with an interest in Internet gambling.
The state Assembly bill, AJR51, was introduced by Assemblyman Gary Guear (D-14), and Deputy Speaker Anthony Impreveduto (D-32) on Dec. 9. The Senate version was introduced on Dec. 12.
If approved, the 21-member commission would complete a comprehensive study of the social and economic impact of making Internet gambling legal.
Offshore Insider!
Online gambling: a wild, unregulated frontier
State and federal agencies use 1963 law to battle new technology
By charles w. kim
Staff Writer
Today’s technology makes gambling easier than ever.
With a couple of clicks of a computer mouse, gamblers can gain access to all the action they would like.
A Dec. 2 report released by the General Accounting Office (GAO) in Washington, D.C., estimates that there are 1,800 Web sites administered from outside the United States that offer online gambling.
"They are very easy to access," said William Jenkins Jr., author of the report for the GAO.
The report, compiled between April and September of this year, was commissioned by several committees of the U.S. House of Representatives to look at how Internet gambling could be restricted in the U.S.
"Internet gambling is a fast-growing industry with estimated 2003 revenues of $4 billion," the report said.
The number of people in the state who gamble online has more than doubled since 1999, according to figures compiled by the Council on Compulsive Gambling of New Jersey.
According to that group, the number of people who called the help line about Internet gambling addictions increased from 0.7 percent in 1999 to 3 percent of the almost 19,000 calls received in 2001.
Jenkins could not say how many minors might be gambling online.
"We didn’t look at that as part of the study," he said.
As more people log on for their gaming action, government agencies are navigating an intricate maze of local and international laws to try and stop the practice.
Internet gambling has been legalized in more than 50 countries and jurisdictions around the world, according to the GAO report.
Because many operations are based offshore, the current legal framework surrounding the issue is very complex.
In many instances, a 1963 law is used to prosecute companies for operating across state lines. Known as the "Wire Act," the federal law prohibits gambling businesses from using interstate or international wires to knowingly send or receive information that would allow a bet to be placed, according to the report.
The report said that this 39-year-old law was designed to combat bookmaking on sporting events. However, many Internet gambling sites are not limited to betting on sports.
While preparing the report, the GAO surveyed 162 sites to determine the types of gambling offered.
The report estimates that between 73-86 percent of the sites surveyed were virtual casinos while half offered betting on sporting events. About 20 percent offered betting on dog and horse racing, and only about 7 percent offered some kind of lottery.
According to the report, this combination of methods of gambling has created conflicting case law.
While the 1963 law and others have been adequate for prosecuting those administering the sites, there are no specific federal regulations pertaining to Internet gambling.
Claudia Farrell, a spokeswoman for the Federal Trade Commission, said it is up to each state to determine the gambling regulations.
The GAO report said that five states, Illinois, Louisiana, Nevada, Oregon, and South Dakota, have enacted laws specifically prohibiting certain types of Internet gambling.
Kerry Hand, a spokeswoman for New Jersey’s Law and Public Safety Division of Gaming Enforcement, said online gambling is illegal in the state.
"We are not taking the position of it being right or wrong. It is illegal in the state and we are treating it as such," Hand said.
According to Hand, state law determines that gambling takes place where the gambler is, regardless of the physical location of the operation.
Her agency and the Division of Consumer Affairs have filed civil lawsuits against several online gambling operations under this law.
In October of last year, suits were filed against eight businesses for allegedly running illegal sports bookmaking operations via the Internet or telephone.
According to Hand, investigators were able to log on and place bets on sporting events taking place across the country.
"The citizens of New Jersey need to be aware that these sports-betting operations are not regulated and they are illegal," former agency director John Peter Suarez said in a press release at the time the suits were filed.
Hand said the agency was able to settle two of the suits in June, with the companies promising to block wagers from or payments to New Jersey residents.
Credit card companies are having an easier time slowing the growth of Internet gambling, according to the GAO report.
The report said that many of the larger companies are now blocking gambling sites from making transactions on their credit cards.
One reason for the cooperation, the report said, is that some debtors use the excuse that the gambling was illegal and therefore they do not have to pay for it.
Hand explained that Internet gambling can only be made legal in this state by a public referendum.
The last such vote was taken in the seventies and allowed casinos in Atlantic City, according to Hand.
Resorts International was the first casino to open in New Jersey in 1978.
Hand said that if voters approved Internet gambling, the agency would need to create rules and regulations for it.
"We would have to be prepared to take steps to legalize it," Hand said.
"These [court] settlements are an important step in protecting the citizens of New Jersey from the dangers of gambling on unregulated Internet Web sites that are not held to the stringent regulatory standards of our Atlantic City casinos," said the acting director of the agency, Thomas Auriemma, in a June press release.
While no regulations for Internet gambling exist in New Jersey, the state does regulate gambling at the horse tracks and casinos within its borders.
According to the gaming enforcement agency, there are currently several bills before the Legislature dealing with Internet gambling.
One of those bills calls for the formation of an Internet Gaming Study Commission that would consist of legislators, officials of the executive branch, and members of the public with an interest in Internet gambling.
The state Assembly bill, AJR51, was introduced by Assemblyman Gary Guear (D-14), and Deputy Speaker Anthony Impreveduto (D-32) on Dec. 9. The Senate version was introduced on Dec. 12.
If approved, the 21-member commission would complete a comprehensive study of the social and economic impact of making Internet gambling legal.
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