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Place your bets
By JEFF HARRINGTON © St. Petersburg Times, published April 23, 2001 TAMPA -- Greg used to travel around the world in search of all-night poker games. Then he found a way to experience that round-the-clock rush at home. He began playing poker online. "It was time to go to work and I realized I forgot to go to sleep. . . . My biggest fear wasn't losing. My biggest fear was not being in action," he said. "I had a laptop and if I had access to the Internet, I was in action playing poker 24/7." Sitting in a weekly meeting of Gamblers Anonymous, Greg proudly told fellow first-name-only attendees that he has not placed a bet, online or otherwise, in nearly nine months. But there are plenty of Internet players ready to pick up his slack. The gambling industry is experiencing an online gold rush that, in some ways, promises to surpass the glory days of Atlantic City and Las Vegas. Internet gambling has grown from 30 sites and bets of $17-million in 1996 to 1,400 sites and $3-billion in bets last year, according to the Center for Policy Initiatives. "Adult porn and gambling are the two big-time money industries on the Internet," said Mark Balestra, vice president of publishing for the River City Group, an industry consultant and publisher of Interactive Gaming News. "With all the troubles that dot-coms have had in the last six months or so, gambling is one of the few industries on the Net that is still very healthy," Balestra said. Most states, including Florida, consider many forms of online gambling illegal. U.S. regulators fear that gambling sites, typically based offshore in countries such as Antigua or Bermuda, have become a fast-growing venue for money laundering. Groups such as Gamblers Anonymous contend the nature of the industry -- betting any time from the privacy of one's home -- makes it an easy temptation for people trying to quit. Moreover, the Justice Department contends that under the 1961 Federal Wire Act, it is illegal for U.S. citizens to place Internet wagers on casino games regardless of where they are located.
"The Internet thing is like shooting a ghost," said John Glogau, an assistant attorney general in Florida. "There's nothing to fire your weapons at." He probably won't get any new ammunition soon. A bill to ban most forms of Internet gaming fizzled in Congress last year and support for reintroducing a measure has waned in the House and the Senate. One stumbling block for legislation is that Nevada casinos, which used to oppose online gaming as a threat, have switched gears. They now think it's better to join than fight what they see as an online juggernaut. * * * Even in Internet time, the industry explosion came quickly. The National Gambling Impact Study Commission, a Congressionally chartered organization, estimated in 1997 that there were 6.9-million potential Internet gamblers and revenue of $300-million. Within a year, the potential pool of users had risen to 14.5-million and revenue reached $651-million. A 2000 study by the Pew Internet and American Life Project found that about 4.5-million Americans have gambled online or played an online lottery. On a typical day, about 1-million Americans gamble or play a lottery online. "The universe of Internet gamblers is relatively small, but their fervor is keen," the Pew survey concludes. Not only is online gambling popular and easy, it has become more socially acceptable, particularly in the United States. State lotteries have helped legitimize gambling, as schools reap billions of dollars from lottery revenues. Last year, states brought in about $60-billion from lotteries and other legalized gambling. Perhaps that is why half of Internet gamblers are Americans and the vast majority of the sites are in English, according to a Bear Stearns report. Typically, players have to type in credit card information and deposit several hundred dollars to gamble with. Cashing out takes a little more patience. Many casinos hold winnings for up to five days before they issue a check or send a wire transfer. Once online, the options run the gamut. Visit the "Ultimate Gambling Site" at gambling.com and pick from slots, blackjack, roulette, sports bets, Caribbean stud and video poker, among other games. Web surfers who want to recreate "the heady atmosphere and decadent glamour of 1960s' La Habana" are lured to register at floriditaclubcasino.com. The emerging options to connect to the Internet through wireless phones and Palm handheld computers are opening another chapter in online gambling. "Play while at the airport or stranded in dull meetings!" urges the home page of wirelesswinnings.com, a Web site that is testing draw poker and blackjack for wireless Internet users. Even Derby Lane in St. Petersburg, which bills itself as the world's oldest greyhound racing track, is getting into the newest game. In a year-old experiment, Derby Lane has been transmitting its races to an Oregon outfit called U.S. Offtrack which, in turn, lets people bet online on greyhound races. Through a link on the Derby Lane Web site, online bettors are whisked to the U.S. Offtrack site. Once registered and having placed funds in an account, they can place bets, watch live races and check out the stats and finishes of their favorite greyhounds. David Tiano, Derby Lane's director of gaming and wagering, said it was hard to resist the upfront cost to the racetrack: nothing. The benefit: U.S. Offtrack, part of Greyhound Channel Inc., pays Derby Lane an undisclosed percentage of the handle, or the amount of money being bet. Tiano will not say how much revenue has been generated except to say it is not significant yet. Tiano acknowledges he is concerned about appearances. "When people say Internet gambling, the hairs on the back of their necks stick up," assuming people think of a shady operator in Antigua, he said. "If this was unregulated and the money wasn't secure and the company wasn't licensed, there is no way we'd sell our signal to these people," he said. "But they are regulated by the Oregon Racing Commission." Derby Lane insists the wagering takes place in Oregon, where online betting is allowed. That's not good enough for Florida Attorney General Bob Butterworth, who has challenged the race track to justify the agreement. Butterworth's office contends the location of the bettor is what matters in telephone and online wagering. "If someone is in Florida and picks up a phone and makes a bet, he is making a bet within the state of Florida," said Glogau, the assistant attorney general leading many of Florida's gambling courtroom battles. Currently, all sports betting and casino wagering are illegal in Florida. That position has led Butterworth into ongoing court battles over gambling cruises to nowhere and the Seminole Indian casino. Florida is not among the half-dozen states that specifically ban Internet gaming, but Butterworth interprets any online wagering as a violation of the federal wire act. The Derby Lane issue aside, Glogau acknowledges there is not much his office can do to get at the heart of Internet gaming: offshore casino Web sites luring Floridians by the hundreds of thousands. Anthony Cabot, a gambling law expert and lawyer with Lionel Sawyer & Collins in Las Vegas, said law enforcement has a problem at every stage of the game. The United States cannot readily prosecute offshore casino Web sites because most gambling crimes are not extraditable offenses, Cabot said. Some states, including Florida, have gone after the middleman, lobbying credit card companies to prevent them from allowing customers to make online wagers. "But it's difficult to try to put the burden on credit card companies to police any and every transaction," Cabot said. Even more unlikely are the odds of going after the end users, the players themselves. Short of sting operations, officers would be hard pressed to prevent someone from playing keno online from home. * * * Tom Talley, a onetime gambler who counsels people trying to quit, isn't counting on law enforcement to help the people he helps. To him, online gambling is a growing threat that incorporates all the downsides of the industry: underage gambling, compulsive gambling, unregulated gambling. There are no taxes and no casino hotel expenses. Gamblers who don't want to be hassled by spouses for going to a casino can easily turn to the computer instead, Talley said. "The accountability isn't going to be there," he said. "It's really secretive when you can do it out of your own bedroom." At a recent Gamblers Anonymous meeting in Tampa led by Talley, 16 people converged to share stories and solace. They ranged from twentysomethings to eightysomethings. Professionals and homemakers. Black and white. Some found their passion at the slots in the Seminole casino, others at the horse tracks, dog tracks or back-room poker games. But their tales were hauntingly similar: lies to their family members; a need to be in control; a winning streak turning into thousands of dollars in losses; and feelings of low self-worth. Among those who dabbled in Internet wagering was Bruce, whose one experience online turned into a brief but costly lesson. He stumbled onto a casino site one evening, entered his credit card number to make the required $500 deposit and promptly lost his connection before even getting into his first game. Unable to get back into the site, he never got his $500 back. At the time, he was losing money by gambling elsewhere and so depressed that he didn't care. Across the table from him, Carlos shook his head. "Thank God I don't even know how to turn on a computer," he said when it was his turn to talk, "because if I did, I'd be in trouble." - Jeff Harrington can be reached at harrington@sptimes.com or (813) 226-3407.
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From the Times Business report
From the AP
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