The first question raised by most gambling advocates is: why regulate at all? A variety of reasons are usually provided. First, many people are uneasy with the morality of gambling. Specifically, Internet gambling provides access to children who are not legally allowed to gamble. "Because children have potentially unlimited access to computers and the Internet, it is possible that without proper monitoring they will access gambling Web sites as readily as they could access indecent materials." The nature of the Internet is that, many times, it is impossible for a site’s webmaster to know the age of the person visiting their site. Therefore, advocates of regulation feel that the only way to prevent children from accessing gambling sites is to make these sites illegal for everyone.
Regulation advocates also point to addiction as a reason to restrict Internet gambling. Several factors lead to an increased likelihood of addiction. The bets are made with ease in an arcade type of atmosphere. "Within minutes of making a deposit with a credit card, a user can be playing virtual versions of a variety of casino games, including blackjack, roulette, video poker and craps, or betting on almost any sporting event." Virtual casinos and their video game structure have been labeled the "crack cocaine of gambling." Although not scientifically proven, this type of site seems to correlate with more visits to the site and an increased amount of time spent at the site during each visit. Addiction is also more easily attained with Internet gambling because of the location of the activity. Before the proliferation of online gambling, an individual had to
visit actual casinos or bookmakers in order to make wagers. The locale of the bet limited the number of wagers, to a degree, because of the limited hours of operation and cash requirements (with illegal bookmakers). However, with online operations, the facilities are open twenty-four hours a day, seven days a week. Further, online gamblers are able to obtain money in their account almost instantly with the use of a credit card.
"Addicts [can] literally click their mouse and bet the house." Excessive gambling is also more frequent when the player is anonymous. Surely, a player who has lost a tremendous amount of money is more likely to succumb to embarrassment at a card table with others watching than while sitting at home alone at his computer.
This addiction is considered a serious problem by many morality advocates, who feel that making gambling more convenient can do nothing but make the problem worse. According to Tom Grey, director of the National Coalition Against Legalized Gambling (NCALG), gambling "as a form of entertainment, [is] a disease to five percent of the population that will entertain themselves into bankruptcy. So obviously, [with] entry into a home . . . the more available and accessible you make gambling, the more you compound the problem."
Another reason promulgated by advocates of regulation is fraud. Currently, Internet gambling is not regulated like other forms of legal gambling (lottery, Las Vegas casinos). "This lack of regulation means that Internet gamblers do not know whether the games they are playing are legitimate and cannot be assured a payout if they do win online." Without regulation and inspection, players have no way of knowing whether the
site in which they send their credit card information pays any of its winners or uses honest machinery. Further, some states choose to forbid gambling on credit or by drunks or minors. These types of restrictions are impossible without a system of regulation for online casino operators. Although some foreign countries have begun to regulate online casinos that have arisen within their borders, there is still the possibility that winners (and losers) could be defrauded.
Finally, tax advocates and established brick-and-mortar casinos have complained about lost revenue. States clearly miss out on a tremendous amount of tax revenue for two reasons. First, they are unable to tax gamblers on their winnings if they do not regulate the online casino operators. Without some type of control over these entities, states have no way of determining who has won and how much. Second, the concrete casinos that are located within a state’s borders inevitably face a reduction in their profits from the competition of online casinos and sports books. This competition results in less revenue for the brick-and-mortar casinos and the state tax rolls. Like any argument, this one also has two sides. There are at least two schools of thought favoring a continuance of the current situation. Some commentators think that the Internet is unique in nature because of its ability to span state and national borders. This characteristic requires that cyberspace be treated as a separate jurisdiction. The counterargument to this theory is that it takes the concept of cyberspace too literally. By treating the concept of cyberspace as an actual place, these arguments "embrace a metaphor that is far from exclusive and, in many ways, far from appropriate." In other words, wagers placed on the Internet should be treated just like any other wire transaction because "one no more makes a virtual visit when using the Internet than when telephoning long distance." Hence, the federal government should regulate gambling via the Internet just as it would regulate gambling over the phone or through the mail.
Other advocates favoring the status quo feel that online gambling proprietors avoid U.S. regulation by locating the servers for their site and all other related operations in a foreign country, such as Antigua, Belize, or Curacao. This argument also seems destined to fail. Ask Jay Cohen, the president and co-owner of the World Sports Exchange sports book. Mr. Cohen was one of twenty-one owners of an offshore company named in a series of indictments charging them with illegally using interstate telephone lines to take wagers from U.S. customers. Although the applicability of the Wire Wager Act to Internet gambling (which is discussed below) is a crucial issue in the case, the prosecution obviously believes that the offshore nature of the wagering does not prevent criminal liability. In court papers, the prosecution argues that "where a bet is placed – physically, conceptually, or otherwise – simply does not matter for purposes of prosecution." Jurisdictional and enforcement problems
will be discussed more extensively below, as well.
Source www.worldonlinegambling.com
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