Internet Gambling

Internet Gambling: Final Paper

The Internet is a place where all people of the world can connect in numerous ways. One of these ways is by placing bets. The question is, are the regulations that are currently in place fair for internet gambling and should there be any new regulations? Some believe it is perfectly legal if the website in which you are betting on is stationed outside of the United States or in a place where gambling is legal. Others believe If you are doing it where gambling is illegal, you are still committing the act of illegal gambling. This issue can affect many different people. The government is involved in many ways from implementing regulations to collecting gambling taxes. Everyday people are affected, from families to people who believe it is their freedom to gamble.

What is the problem? The United States Government is the biggest influence on regulation for any aspect of life in America. The government can control what we do and how we do things. The question is, are these regulations fair and should there be any? Also, who has say in these types of complex issues? Internet Gambling has grown to be one of the most popular things to do on the internet and one of the most popular forms of gambling. This could include poker, black jack, sports, and pretty much anything else you can think to put a wager on. It has become this popular because of its ease; nobody has to fly to Las Vegas anymore to make a bet. People also do not have to go through bookies to make illegal sports bets. Jan McMillen writes that the government has the following options:

" 1) Restriction and/or prohibition to disallow Internet gambling. Prohibitive legislation can target Internet users or gambling providers, or both;

2) the laissez-faire approach, accepting that this form of gambling delivery cannot be controlled, leaving development to market forces;

3) legalization and attempted regulation."(McMillen, Jan 392)

One would think that if the government is against internet gambling adamantly then they should just make it illegal. This is where the problem becomes complex. "The architecture of the internet makes prohibition of online gambling easy to evade and impossible to enforce...If the government tries to shut down gambling sites, those businesses will simply move their operations to countries such as Australia or New Zealand, where online gambling is legal."(Gamblers in Cyberspace) Obviously, the U.S. has no jurisdiction on sites that are located outside. This opens up a vast majority of legal issues and loop holes for the American public. Is it illegal for someone to place a bet on a website that is found in a country such as Australia? If someone flies to Australia, places a bet, and leaves; they have done nothing illegal. Technically, placing bets online is the same concept without actually going to Australia since the bet is still being placed in Australia. Others would argue that people placing these bets are still in America and are still physically within the U.S. borders, therefore they are doing an illegal activity that is against American policy. This is in fact what is happening now.

In October 2006, the U.S. government "enacted legislation that essentially bans the processing of online wagers by American gamblers."(Gray 1) The law also has grey areas as well, such as it only includes The United States. There is other legislation that has been passed along with this. For example, the U.S. Wire Act bans people from calling in bets to countries across borders but does not ban internet transactions. This act also lacks other things as well when used in the court of law. "The Act is addressed to those "engaged in the business of betting or wagering" and therefore apparently cannot be used to prosecute simple bettors."(U.S. Online Gambling Laws 2)

"American legislation also prevents U.S. banks and credit card companies from processing bets from online casinos, but they can process interactions with online payment processors such as Neteller, who is based in Calgary."(Gray 1) This is another case in which international laws come into play and make this subject controversial across borders.

Where are we headed? Even through all of the legislation passed have serious loop holes, the U.S. government still continues to use these laws the best ways they can to fight internet gambling. "David Carruthers, the British Chief Executive of BetonSports, which is also listed in London was detained while changing planes in Texas en route between the company's offices in London and its base in Costa Rica. He was charged with conspiracy and fraud relating to online gambling."(Busted Flush 2) As shown here arrests are made to try and scare people from taking advantage of these loop holes. As a result of this arrest a United States attorney "had settled a large government civil action against BetonSports. They did not admit any wrongdoing; they eventually agreed never to accept any more online betsfrom U.S. sources."(International Law Update 1) If arrests are continued then this could help deter people from looking for these loop holes in the laws.

The World Trade Organization is also involved in the regulation of online gambling. "Under the WTO's General Agreement on Trade in Services, members are allowed to select which services to include for coverage...United States originally included gambling on its service list, thereby subjecting it to WTO standards. By withdrawing gambling from its list of commitments, the United States in the future will not have an international obligation to allow foreign investors to provide gambling services and can regulate internet gambling."(Wedekind 1) The government can then place these regulations without any fear of other countries doing something to hurt the U.S. Even though there are loop holes, the heavy regulation of internet gambling can still effect income of online casinos because many of them rely on U.S. markets. The regulation makes it hard for a lot of people to understand these loop holes so many people will not go through the hassle of trying to do so. All of these people could be gambling if it were made legal, so the online casinos view this as huge losses.

What do the people have to say about gambling? The most important part of the United States is its people, the opinion of the public matter but it seems to be split. Many people think that it will cause addiction that is worse than normal gambling since it would be so easily accessible and anonymous. "The real threat comes from the isolation and secrecy of the betting activity itself...Gambling will always claim lives no matter what. Recently, a self-acknowledged