Don't stick a fork in Internet gambling

From: nwitimes.com

BY JOHN G. BROKOPP
When President Bush signed the Unlawful Internet Gambling Enforcement Act in October, many reports gave the impression it sounded the death knell for the multibillion dollar Web-based gambling industry.

On the contrary, all it did was strictly regulate the process by which funds are transferred from users of the sites to the offshore companies which own and operate them. The practice itself wasn't declared illegal.

Reputable foreign companies, which had conducted business with citizens of the United States, halted operations immediately, leaving the shady fly-by-night operators to look for ways to circumvent the system. The climate is ripe for them to create an underworld business similar to what existed in this country during Prohibition.

The legality of online gambling has yet to be addressed. The major stumbling block is it continues to be discussed in context with the 1961 Wire Act which prohibits sports betting over telephone lines.

Forty-five years ago the Internet wasn't even a glint in technology's eye and, during the last decade, regulators and legislators have looked the other way while online gambling was allowed to grow into a multibillion dollar industry.

Whereas persuasive arguments can be made against betting online on pure games of chance, such as slots, at issue here is poker which, because it requires an element of skill, has been regarded in some circles as a recreational pursuit that extends beyond the boundaries of gambling.

Handicapping horse races certainly resides in a similar area of gray, but the recent legislation stipulates unlawful internet gambling "shall not include any activity that is allowed under the Interstate Horseracing Act." That act, signed into law in 1978 and amended in 2000, sanctions the transfer of pari-mutuel wagers between states via telephone or other electronic means.

Greg Avioli, acting chief executive of the National Thoroughbred Racing Association (NTRA) and Breeder's Cup Ltd., had this to say at the annual International Simulcast Conference held earlier this year in Philadelphia: "The industry is squandering an opportunity as the only legal provider of Internet gaming. We have a golden opportunity in our hands."

Avioli's suggestion was for the industry to get together and create a single online site to bet the races, which is something the giant American-based casino companies would aspire to do with online gambling, in particular poker, if politicians ever get serious about taming the beast and using it as a legal source of tax revenues instead of allowing it to run unregulated.

There is much at stake for legal companies with vested interests in poker, including Harrah's Entertainment and its successful World Series of Poker, and a large percentage of participants who have ties in some way, shape or form to Internet poker sites.

The opinions expressed solely are those of the writer. He can be reached at jbrokopp@comcast.net.

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