Wednesday May 31, 10:51 am Eastern Time|
FEATURE-Internet gambling grows at torrid rate worldwide
By Sarah Tippit
LOS ANGELES (Reuters) - When he is unable to sleep or needs a quick pick-me-up, ``Neil'' turns on his home computer, finds an Internet casino and gambles away his money with a credit card and the click of a mouse.
From the privacy of his living room, he can instantly find more than 800 casinos on the Web and turn his PC into an electronic blackjack, slot or poker machine or a sports bookie who will take his wagers 24 hours a day.
``In the old days you called a bookie and asked for the odds on Wimbledon or the French open and they would laugh at you. Here there are all kinds of sports. ... It's a beautiful thing,'' Neil told Reuters.
``My friends used to get together to play poker, but now they do it online if they don't feel like leaving the house or paying cab fare. It's a little Internet subculture,'' he added.
Fuelled by the explosion of the Internet and acceptance of casino gambling as mainstream entertainment worldwide, online e-gambling is growing at a torrid rate.
``It is clear the dynamics are there for this industry to succeed. People are spending more time online, they are becoming more comfortable with e-commerce and they love games of chance,'' said Bear Stearns analyst Jason Ader.
NOT JUST SLOTS ON THE NET
More than 850 Internet gambling sites worldwide had revenues in 1999 of $1.67 billion, up more than 80 percent from 1998, according to Christiansen Capital Advisors, who track the industry. Revenues are expected to top $3 billion by 2002.
Sites range from traditional casino games like video slot machines, poker and keno to Bingo, horse racing and other sports. Most are located outside the United States, where online gambling remains in a legal limbo.
Some are fronted by celebrity pitchmen such as former NFL star turned actor and beer pitchman Bubba Smith (http://www.bubbascasino.com) and daredevil motorcyclist Evel Knievel (http://www.evelknievalcasino.com).
Others bill themselves as themed casinos with everything from social experiences (http://www.TheSinglesCasino.com) to easyrollers.com for motorcycle enthusiasts.
Still others offer virtual excursions to exotic locales such as Africa or Australia's Outback .
``Just as you would see a themed casino in Las Vegas, there are themed casinos on the Web,'' said Mark Balestra, author of ``The Complete Idiot's Guide to Online Gambling,'' released five months ago by Macmillan.
Technologically they are all the same. Designed by a handful of game makers, their main purpose is to ensure the casinos win more often than they lose, Balestra said.
Problems associated with online gambling far outweigh the benefits and have stalled its expansion in the United States, Ader said.
RIGGED GAMES, CREDIT CARD DEBT ARE WORRIES
Issues include concern about the possibility of rigged games and low pay-outs, software copyrights, credit card debt, proving the age and eligibility of players and monitoring and regulating online gambling.
While online gambling is legal in many parts of Europe, Latin America, Australia, Asia and the Caribbean, it remains in a legal gray area in the United States where technology has outpaced laws.
Except for a federal law passed in 1961 prohibiting sports betting via wire devices -- used successfully to prosecute an online casino operator who accepted a sports bet from a U.S. resident -- federal and state governments do not have laws to regulate gambling such as blackjack or slots, said Los Vegas lawyer Tony Cabot, who specialises in Internet gambling cases.
As laws are being hashed out, thousands of U.S. residents are busy gambling through offshore online casinos, a practice that is technically illegal.
Neil said he uses Web sites that compile information provided by consumers to decide for himself which casinos seem the most legitimate. ``When you're dealing with money you have to research these things,'' he said, adding that he most often consults with oddswiz.com or bettorsworld.com for online casino information.
PROSECUTION ALL BUT IMPOSSIBLE
At present, it is nearly impossible to prosecute online casino operators or online gamblers themselves.
``Clearly obtaining necessary jurisdiction to invoke your criminal sanctions is difficult if not impossible when you're dealing with a non-U.S. citizen outside the U.S.,'' Cabot said.
So Neil -- the name he asked to be identified by -- can rest easy for now. Even if an offshore casino company attempting to stay out of U.S. territory blocks out his U.S.-based Internet service provider, he may be able to sign up with a Canadian or European Internet service and, through them, continue to gamble via his telephone modem.
Changes in the worldwide Internet infrastructure, combined with emerging gaming markets could lead to a positive future for Internet gambling, Ader said.
Several companies have put themselves in a position to weather any regulation or consumer confidence issues and still profit from online gaming, among them software developers Online Gaming Systems and Cryptologic, Executone unit eLottery and GTECH unit UWin!, a lottery equipment company.
States with heavy brick-and-mortar casino operations are seriously looking ``more openly than six months ago'' into setting up regulated online casinos, Balestra said.
But online gambling is unlikely to detract from the profits of their brick-and-mortar counterparts, Ader said.
``Online casinos are good late at night if you want to have a little fun for half an hour,'' Neil said. ``(But) there is no comparison with real casinos ... the whole environment.''