In July 2006, the U.S. House of Representatives voted to stop Americans from gambling on the Internet. The Senate must now decide whether to enact the ban into law.
For many years the U.S. Justice Department has forbidden online gambling.
In Europe (notably Britain) and the Caribbean (notably Antigua and Costa Rica) Web betting is legal.
Yet Americans bet almost US$150 billion over the Internet in 2005, about half of the world's total. While the Wire Act of 1961 outlaws betting over phone lines, U.S. law is almost impossible to enforce against website operators who live outside of America.
Enter the U.S. House of Representatives with its new bill. The proposed ban makes it illegal to use cheques, credit cards or other Internet payment systems for betting sites. Exempted from the ban are horse-races and state lotteries.
Recalling the days of Prohibition, some believe that a ban will drive Internet gaming underground into to hands of money-launderers and others who would be free of the financial controls and record-keeping that U.S. bank accounts and credit cards provide.
Just ask Australia. The Aussies banned online gambling in July 2001 but players soon learned that gambling sites could easily set up client accounts with offshore financial institutions. "G'day Mate gamblers" also use online payment providers like Fireplay which is governed under the laws of Bermuda.
And The Winners Is...
The industry value of global Web gambling has grown from US$300 million in 1997 to some $12 billion today. Financial analysts expect that figure to double in 5 years.
By banning Internet casinos, critics say that state governments are really protecting their traditional streams of tax revenues from lotteries, casinos and the more recent racinos (racetracks with slot machines).
Ironically, this position may be short-sighted. One sports betting site estimated that legalized Internet gambling would have generated $1.2 billion in taxes for the U.S. in 2004.
Bet-loving Britain has gotten the message. The Brits have already legalized online wagering on everything from soccer matches to reality TV show winners. British parliament has passed legislation that in 2007 will expand Web gambling to include casino games such as roulette, blackjack and poker.
Online sites pay 15% of their gross profit to the British government, which thoroughly investigates and regulates the Web operators. The British Treasury has pocketed more than $2.5 billion in tax revenues since 2004.
It may only be a matter of time before countries like the U.S. and Canada follow in Britain's footsteps. If not, Britain may win an even larger piece of the growing Internet jackpot.
