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A Closer Look:

Lawrence Lloyd's personal foray into online gambling

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     But Abramian stopped gambling entirely a few years ago, while his friends discovered new sites and bet more money. One of them, who had already filed for bankruptcy once, was once again in thousands of dollars of debt. In order to feed the gambling habit, he accepted offers for credit cards with high limits and exorbitant interest rates. Another friend made a few bets and lost some cash – to the tune of $12,000. He started calling around asking for the money because he was afraid his wife would leave him if she found out. Now Abramian goes to Vegas for the shows and entertainment. He decided not to be part of the booming industry, even if it is here to stay.

The Future: Regulation?

      The United States has been slow to follow other nations, which have embraced stronger laws protecting consumers. In the United Kingdom, for instance, casinos licensed there use age-verification software to prevent minors from incurring mounds of debt, and all bets are recorded. The companies are also often audited for fraud.

     American consumers have a single law: the Interstate (also called Federal) Wire Act of 1961, which prohibits the use of “wire communication facility for the transmission … of bets or wagers or information assisting in the placing of bets or wagers on any sporting event or contest.” Though it was intended to corral gambling through organized crime, the Department of Justice has interpreted the law as applicable to online gaming. But the wording of the law only allows for people engaged “in the business of” wagering to be prosecuted, which may exclude the casual March Madness gambler. Plus, all gaming outfits popular in the U.S. are based outside the government’s jurisdiction.
      But there have been several attempts to legislate the industry. Six years ago, a bill was introduced to amend the Federal Wire Act to ban online gambling. The House of Representatives gathered 245 votes to support it, but advocates blame embattled lobbyist Jack Abramoff for pushing it on the suspension calendar (which required a two-thirds majority). More recently, the U.S. has tried to ban search engines and banks from doing business with offshore casinos. Companies in Antigua and Barbuda appealed to the World Trade Organization, accusing the U.S. of unfair restrictions. WTO agreed, saying that the U.S. was violating the general agreement on trade and services.

Congress attempts to regulate a booming business, and lawmakers face difficulties.

     What the government has done is put pressure on credit card companies not to allow transactions with known gambling entities. Bank of America, for example, does not allow its credit or debit cards to be used at gaming sites like or But that angle has proven tricky, because gaming fans can circumvent those roadblocks with services like Neteller or Firepay, which function as online banks and can retrieve money directly from one’s checking account. U.S. marshals have also seized money from companies who have received advertising revenue from online gambling corporations – they once took $3.2 million from Discovery Communications after placed a TV ad – for possibly aiding an illegal activity. The government has also gone after companies like PayPal for processing gambling transactions.

     The problem, according to some, is that the government seems intent on banning internet casinos instead of regulating them.

     “They truly should regulate them, because they are not going away,” Noble said. “[Regulation will happen] in five to 10 years at the very least. Already, MGM Grand has stated they want an online component, so the desire is there.”

     Now an Internet Gambling Prohibition Act has been reintroduced to Congress – a bill would prevent banks and credit card companies from processing overseas gambling transactions. Virginia congressman Bob Goodlatte said “the explosive growth of the internet has provided a means for gambling operations to evade existing anti-gambling laws.” He has twice initiated anti-gambling bills that failed to muster enough congressional support. Arizona senator (and co-sponsor) Jon Kyl wants to halt online gambling to protect minors. Of course, the bill still allows internet gambling by Indian tribes. And outlets like state lotteries, riverboat casinos, horse races, keno and card rooms haven’t faced any legislative battle lately. Online gambling, it seems, is the only type that poses a threat to the country’s social fabric. And even then, it’s only certain types of online gambling. Critics say the government doesn’t like what it can’t tax.

     No one can predict where online gambling is heading, but analysts suspect the industry will follow what has happened with the Vegas strip casinos – consolidation. There are several large companies, like Sportingbet and Bodog, who are continuously growing. Many smaller sites don’t have the resources to compete. In 10 years time, we could be seeing several conglomerates ruling the market and reaping most of the profit.



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