Online gambling expansion and government regulation in the United States

Online Gambling: Should it be banned?

Gambling over the years has transpired from a frowned upon cultural deformation to a more enticing pastime for easy money making opportunity. Its approval into the social sphere is not only dynamic but has speedily grown from what it was over the years. In fact there are many media outlets like the television and the internet that propagate games like poker for a wide audience to view daily contributing to the immense increase in the number of gamblers in the U.S. And the world. (Prystash, (http://acacia.org.ohio-state.edu/documents/601Paper-JohnPrystash.doc)

It isn't a hidden fact that the technological advancements have helped the businesses and industries flourish throughout the world, the gambling industry is no exception. In fact, the gambling industry benefits from the concealed, prompt, residual and 24.7-hour access that the universal medium of internet can provide to the eager participants (Kyl, 2003).

In the year 1999, the National Gambling Impact Study Commission carried out a survey and put forth a description and detailed data of the stats depicting the increase in internet gambling corresponding to its demand and technological expansion. According to the report, internet gambling revenues and participants had increased twofold or doubled within a year from 1997 to 1998, and the sites available online had grown from 50 in 1998 to 18,000 in 2002 (Bear Sterns report), and within a decade (1995-2002), the gambling industry had earned $10 billion in revenues (Keller, 1999). Another recent study has estimated this amount to only grow to a whopping $12.6 billion by the end of 2006 (Kyl, 2003).

Thesis Statement:

The main object of this paper is to bring forth, justly, the two viewpoints and outlooks of the Online Gambling World, while posting my view on one without being biased towards the other. This research paper gives a brief history of the involvement, and the results thereof, of the government laws and regulations, with the gambling industry's standpoint on the criticisms faced, and positive points of Internet Gambling.

Online Gambling Rules and Regulations:

The widespread restrictions and regulations passed over the years on the accessibility and ventures of the gambling industry have mainly been because of the belief that the pros and cons of the gaming industry weigh heavily towards the negatives as opposed to the positives (Valley Broad. v. United States, 1998; Keller, 1999)

In the United States framework, it is acknowledged that the construct for legalizing internet gambling can be intricate and tricky, which is why both the federal as well as state government bodies are sharing responsibilities for its control. It wasn't always like this though, before it was the state that was responsible as the whole and sole body for the administration of gambling, but with the availability of World Wide Web, the scenario is far more extensive and complex to be handled by a single entity, hence leading to associated controlling authorities. The Wire Act is essentially the most influential authoritative and effective stance taken by a government, even though there are times when the federal and state courts do not agree on the actions that need to be taken. Other legislatures like the Travel Act and the Illegal Gambling Business Act have also been influential in closing down gambling units conducting business over and across the inter-domestic or global lines via telephone and potentially the Internet. Other states as well as countries of the world have taken strict legal steps and criminalized the act of internet gambling, or imposed strict rules and bypasses, and brought down the likely and "interested" gambling units and industries in those states (Keller, 1999).

However, all of the associated bodies and their efforts to control internet gambling have been in vain as its popularity is clearly growing, being assisted from the augmented demand and technological advances, now internet gambling appears to break all previous norms of gambling outlets previously unknown and tangible. Gambling is readily available anywhere and anytime now. (O'Brien, 1998; Keller, 1999)

This growth and accessibility of gambling through the internet is utterly conflicting with the government's aim to form regulations and rules against the phenomenon of under-age gambling and exploitation. Hence, the government has a keen interest in the restriction of underage and internet gambling more so than the overall conventional gambling activities itself (Keller, 1999).

Arguments against Legalizing Online Gambling

With the increasing modern status of life almost anyone and everyone has access to the Internet and the various facilities that it provides including the option in focus: online gambling. With the accessibility of the World Wide Web, users of all ages can arrange bets without being identified or being checked on their financial stature to place bets, also fraud and deceit can be very simply carried out as the gambling sites available are so many widespread that the U.S. regulatory cannot control (Keller, 1999). Even though websites appear to be taking some action to make sure that there no underage users, there still isn't enough being done to restrict and stop underage gambling. NCAA has further gone on to say that sports' gambling "remains a growing problem on college campuses.... If left unchecked, the growth of Internet gambling may be fueled by college students. After all, who has greater access to the Internet?" (as cited in Kyl, 2003: pg, 4).

Online gambling, for some, is also one of the sources of money laundering activities because of the completely private contact and obscurity to the industry that enables a money launderer to deposit a certain amount of money in a fake or phony account use and loose a certain amount of the money to gambling and then cashing it, making it look completely legal (Kyl, 2003).

Hackers will be able to find easy susceptible ways to get hold of important personal information like the credit card number or account details and use it illegally or for dangerous means or robbery (McMillen, & Grabosky, 1998).

Internet is a complete and total incursion of confidentiality which is what leads to another downside for online gambling: the authenticity of the sites, a site which looks authentic and legit one minute could completely be wiped clean off the cyberspace within minutes and no legal actions to counter any money loss could be taken in time by the looser because he doesn't know who he was dealing with and where that person was from. The credit card accounts details could be exchanged and then the sites could be wiped off clean as well leaving the user completely bound financially and lawfully. (Kyl, 2003)

Another important downside which needs to be addressed is the disloyalty of users, i.e. even if the site is genuine, the user could be playing them for money and cheat on games using decided methods and techniques to gain the upper hand and huge amounts of money (McMillen, & Grabosky, 1998).

The downside of gambling is also influential on other form of sports, i.e. those overachieving gamblers who are hungry for a win might entice and provoke the players through an investment to perform below par or badly (McMillen, & Grabosky, 1998).

Another downside shown and proved through various researches is that the part of the community most vulnerable to the temptations of gambling online is the one where people are either not stable/secure financially (or otherwise). The gaming industry takes no notice of the financial position of a user before enabling a contact with them, in other words, the sites are only a click away, any one who logs on is in the world of gambling without any warning or any advice of how and where to utilize the money or if not to use it at all (McMillen, & Grabosky, 1998).

In accordance to the National Research Council survey: "many families of pathological gamblers suffer from a variety of financial, physical, and emotional problems, including divorce, domestic violence, child abuse and neglect, and a range of problems stemming from the severe financial hardship that commonly results from pathological gambling. Children of compulsive gamblers are more likely to engage in delinquent behaviors such as smoking, drinking, and using drugs, and have an increased risk of developing problem or pathological gambling themselves (as cited in Kyl, 2003; pg, 5)." The survey further establishes that "as access to money becomes more limited, gamblers often resort to crime in order to pay debts, appease bookies, maintain appearances, and garner more money to gamble (as cited in Kyl, 2003; pg, 5)."

Plus apart from that, internet gambling is like having loads of addictive board games to play with in your house. Amateur and professional sports take a back seat when gambling works in favor of the user and he is gaining financially, he does not feel the need to physically work out and try other sports that could be rewarding as well (Kyl, 2003).

Also Internet gambling has somewhat disgraced the integrity and spirit in which most sports is played with the heavy handed placing of bets and investments made to secure those bets and structure the outcome of a game or the performance of a player. Washington Capitals hockey star Jaromir Jagr is a latest example of a star being enticed and getting involved with the gambling world. (Kyl, 2003).

The involvement that some users get with online gambling can lead to obsessive behavior and an eventual disregard or inattention to the workplace or family which could lead to domestic stress when things start to go bad, or one experiences fraud and deceit and looses a big chunk of money. It could lead to further loans and debts, financially and economically stressful situations for not only the user but his wife, kids, friends, etc. (McMillen, & Grabosky, 1998).

As a whole, the society gets influenced negatively with the increase in unemployment rates and money crimes like bank robberies out of desperation to repay debt, bankrupt citizens. Estimates show that about 1/3-1/4 of gamblers being treated in the Gamblers Anonymous survey have experienced a high unemployment phase along with another survey that showed an estimate of 28% out of the 60 suffering and struggling gamblers who had experienced bankruptcy or were in heavy debts within a whopping range of $75,000 to $150,000 (National Research Council, 1999; Kyl, 2003).

The round offs for the social loss when looking at the approximate expenses of gambling rehab management, unemployment reimbursements, deprived corporeal and cerebral health, welfare remunerations and work loss amount to $1,200 per "pathological gambler" and $715 per "problem gambler" annually as shown by a survey done by the National Opinion Research Center (NORC). In the same survey the estimates show rounded off figures of $10,550 for every pathological gambler, and $5,130 for every problem gambler when dealing with the enduring expenses of gambling like liquidation, captures, captivity, lawful separation expenditures, etc.; the total of all these factors amounted to an approximated annual value of $5 billion per year, with a supplementary $40 billion for the lifetime costs (National Research Council, 1999; Kyl, 2003).

Conclusion

Dr. John Reynolds, concerning the effectiveness of governmental intervention through legislation on Online Gambling, has stated that "We just accommodate changes in legislation and find ways around it... There is far too much demand, and too many participants, for a prohibition to work (as cited in Prystash, (http://acacia.org.ohio-state.edu/documents/601Paper-JohnPrystash.doc)."

Internet gambling is emerging as a strong force that is spreading far and wide with parallel acceptance. It is not, however, a "victimless crime." To sum up, all the efforts of the governments, legislative bodies within the United States and outside along with the international bodies have somewhat been in vain and the attention has been utilized as an advantage by the crafty gambling industrialists who countered effectively and converted gambling as an accepted social body. It would be in the best interest of all involved to allow the legalization of the gambling industry, because it is clearly out of the hands of the legislative bodies seeing the recent acceptance and growth of it, it only seems to be the right and correct thing to do (McMillen, & Grabosky, 1998).