60 minutes:online gambling

tombomb

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Anybody catch that show yesterday? I wasnt aware that it is illegal to gamble online in the U.S.Can a person residing in the U.S. expect to be prosecuted in the near or distant future for playing online?Anyone know of anyone who has been?I would like to hear opinions on that from the moderators or Casinomeister or anyone else for that matter.
 

JohnGalt

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The justice department says it is illegal but that it will not seek to enforce the law against gamblers in the United States (i.e. it would prosecute the casino if possible, but it will not bother with customers). However, there is no law against it. The law they rely on is I believe the wire fraud act. It has never been tested in court and likely would not hold up as prohibiting gambling at online casinos. So bottom line is, you're safe. May or may not be illegal, many think not.
 

webber286

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I thought that was an interesting piece, and very pro-online gambling. I'm not so sure about where they start out by saying "The federal government is clear: gambling on the Internet is against the law." Especially when they are referring to the Wire Act that makes phoning in a sportsbet illegal. That is the only federal law on the books. The Feds want people to believe it is illegal when in fact it is expressly so.

States have actually taken a stance against the Feds by wanting the right to say wether online gambling is legal or illegal for their citizens. South Dakota almost passed a bill that would have allowed them to regulate online poker rooms (until the Feds came down on them, and promised to make life difficult). Then there are states like Indiana and Utah that expressly prohibit their citizens from playing online. It seems like there could be a states right's battle before anything could be passed one way or the other.

Of course it all comes down to prosecution, and that becomes very difficult when over 12 million Americans are gambling online. It's not like Napster where you can force the service to show their domain records to catch individuals. I'm not aware of any individuals being prosecuted in the States for gambling online. A few for running gambling sites, but it is clear that is illegal.

Here's a link to the article for those who missed the airing:
Link Removed (invalid URL)
 

jetset

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US law on online gambling is far from clear, although the Department of Justice keeps asserting that online gambling is illegal under the Wire Act (which others argue applies only to sportsbooks) but has yet to fully test that opinion in an online casino sense.

The Wire Act is antiquated in today's terms, but every time the politicians try to update it, or introduce alternative anti-online gaming legislation it bogs down in a sea of vested interests and contrary opinions.

Long may it do so until someone sees the logic in regulating it properly in the USA, hopefully in the process ridding the industry in large measure from small offshore arm-chancers and making the formal presence of major and responsible online gambling companies on American soil possible.

I thought Terry Lanni's comments in the program were very valid. As a major US terrestrial operation he would like to get online with a clear legal and regulated mandate. I'll bet most of the others would, too.

This industry still has tremendous scope for growth, and regulated operations in the USA can only have a positive impact imo.
 

Casinomeister

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jetset said:
US law on online gambling is far from clear, although the Department of Justice keeps asserting that online gambling is illegal under the Wire Act (which others argue applies only to sportsbooks) but has yet to fully test that opinion in an online casino sense.
The Justice Department needs to get out and let the individual states determine what is lawful/unlawful for their constituents. I've just received a copy of this month's IGWB magazine (International Gambling and Wagering Business) and it provides a breakdown on what is allowed in the US by state:

Charitable Bingo - 47 states
Charitable Games - 40 states
Card Rooms - 13 states
Casinos and Gaming - 15 states
Indian Casinos - 24 states
Sports Betting - 4 states

This doesn't include lotteries which are allowed in 41 states

By the way, for parimutuel wagering - telephone wagering is allowed in CA, Conn, Idaho, KY, LA, NV, NH, NJ, NY, ND, OR, Penn.,VA and WY

But the US Justice department says that gambling online is illegal? So it's no wonder that the US population is getting mixed signals.

I agree 110% that online gaming needs to be regulated in the states, but I don't see it happening anytime soon. There are too many self interests at stake, and the conservatives equate online gaming with Osama.

What is interesting, is that prohibiting online gaming in the US is a common ground for the far right and far left. The far right feel that gambling is morally wrong (baaad, baaad gambling - but their churches host Bingo), and the far left feel that people are too stupid to make decisions on their own. They need the government to protect them from themselves.

Funny how these politicians hype the fact that a teenager with daddy's credit card can try to get online. What about Vegas? No one will stop a 20 year old from sitting at a slot machine. It's only when they hit a jackpot that they check their IDs.

Again good points made - to regulate means to control and/or eliminate what is considered negative in this industry.
 

Slotmachine

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Casinomeister said:
Charitable Games - 40 states

What is interesting, is that prohibiting online gaming in the US is a common ground for the far right and far left. The far right feel that gambling is morally wrong (baaad, baaad gambling - but their churches host Bingo), and the far left feel that people are too stupid to make decisions on their own. They need the government to protect them from themselves.

Funny how it does not matter which views they hold, right or left, christian or muslim - the extremists end up thinking the same. Kill, kill, ban, ban, regulate, regulate.... "Far" anything is akin to idiocy.

If and when they legalize online gambling in the U.S., it'll be interesting to see what happens to the present operators all over the world (Gibraltar, Antigua, Kahnawake...) when the big-time U.S. players with their megabucks take over the business. Food for thought if you're thinking of buying online casino stock right now.....

Cheers,
SM
 

schnozzy

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Really baffling thing...

Isn't why not make it legal to play, but why not make it legal to host online casinos.

I think there are some Vegas properties that could make a mint with a co-branded casino. And us players could get combined online/real-life comps!
 

maxfalcon

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If and when they legalize online gambling in the U.S., it'll be interesting to see what happens to the present operators all over the world (Gibraltar, Antigua, Kahnawake...) when the big-time U.S. players with their megabucks take over the business. Food for thought if you're thinking of buying online casino stock right now.....

IMO, it will hard for them to penetrate the market, even with their megabucks. Players are now familiar with certain type of games and online operators. The internet is really a particular business, in every sector possible, they will be obliged to match with the current (or futur established) state of things. But they will take a large chunk in the market share... or will expand it and create business!

However, there will be a lot of changes in the industry if it happens, that's sure, and as this industry is already very dynamic, that promises so great, animated and busy days for the futur! ;)

If I would be a small/medium online casino operator actually, I would be happy to see things keep running the same way for a long time... even with all the current fog around legality and possible problems with justice. :D
 

mary

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I saw an ad last night on tv for a laptop with a fingerprint scanner built right in for biometric security. It's only a matter of time before the "junior with the family credit card" scenario is no longer at all valid.
 

jetset

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IBM have been touting a fingerprint activated security lock on their laptops for some time.
 

tombomb

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mary said:
I saw an ad last night on tv for a laptop with a fingerprint scanner built right in for biometric security. It's only a matter of time before the "junior with the family credit card" scenario is no longer at all valid.
Dad better sleep with his hands in his pockets.
 

winbig

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mary said:
I saw an ad last night on tv for a laptop with a fingerprint scanner built right in for biometric security. It's only a matter of time before the "junior with the family credit card" scenario is no longer at all valid.


Although it will definately cut it down, it still won't eliminate it. There'll always be parents out there that let their children keep a second computer in their own room and/or don't monitor their usage on it.
 

Casinomeister

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pokeraddict said:
Sports Betting - 4 states

What are the three states other then Nevada?

Beside Nevada:
Montana
N. Dakota
Oregon
 

webber286

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maxfalcon said:
IMO, it will hard for them to penetrate the market, even with their megabucks. Players are now familiar with certain type of games and online operators. The internet is really a particular business, in every sector possible, they will be obliged to match with the current (or futur established) state of things. But they will take a large chunk in the market share... or will expand it and create business!

In looking at the future, if the US were to legalize online gambling and allow the Harrahs and MGMs of the world to operate online, there would likely be massive consolidation amongst the larger online operators. The middle tier and smaller operations would likely go out of business in droves.

The large operations would have no problem coming up with multi-million dollar advertising budgets to take significant market share while building the overall size of the industry. Just think about how many people don't trust online casinos, but would jump at the chance to play at mgmgrand.com if it were available. Didn't the casino representative in the article state that their business would double if they could operate online? That's a huge statement as online gambling only accounts for about 5-7% of the total industry. Trust is the major barrier to new gamblers online and is the one barrier that the big brands don't have to be concerned with, in fact it will be one of their selling points.

With regard to bonuses and other incentives, the power to offer comps that cross on- and off-line would be of great benefit to many players and would secure the loyalty of many gamblers. Promotions like "play enough hands of black jack and we will fly you out to Vegas to stay in one of our suites" would be very juicy for many peopld. The big guys also have the budgets to battle the online casinos dollar for dollar. In fact, they would probably consider their online efforts a loss leader for a couple of years and just undercut the big guys online by offering larger and larger sign on and reload bonuses. This would have the effect of squeezing out the smaller online operations.

So, yes I agree that the online operators don't really want regulation to happen in the U.S. as the competition would kill too many of them off, while the larger operations would probably welcome it since it would send more people online and position them to sell their businesses or even take them public.

Just my 2 cents on how the industry could change. Watch out for what you wish for.
 

maxfalcon

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Excellent post. As you pointed it, the major benefits of having the big Las Vegas brands coming online are trust, a connection with land-based / online, and expanding market share, as they will probably get their loyal land-based players online.

Big consolidation has already started. That's what was predicting Terri C. Walker, more than two years ago in his book 'The Online Gambling Market Research Handbook'. It seems that current operators are preparing the ground to this event.

But I still believe that the current popular online operators are here to subsist, even if the big brands land on our virtual ground. :D

And what about affiliates in this case? I am sure they will continue to play a big role in this industry. What do you think?
 

Casinomeister

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maxfalcon said:
...And what about affiliates in this case? I am sure they will continue to play a big role in this industry. What do you think?
I'm confident affiliates will play a large role. Just recently at the EIG PartyPoker's CEO stated that affiliate marketing is crucial since 30% of their players come from affiliates. And as you probably know - PartyPoker has about as much traditional media exposure as you can get (TV, Magazine ads, etc.).

You can't click a newspaper or television ad. When you start trying to do so, you know you've been spending far too much time online.
 

webber286

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Where the affiliates role is in a potential industry shake out is an interesting question, and one I have pondered before, though inconclusively.

The first thought is that many affiliates are on the front lines of providing trust for certain casino brands, and if trust is no longer a major deciding factor for a new player, then those affiliates may be less needed and would see fewer people coming to their sites. Other affiliates that market themselves around playing strategies, hosted poker tournaments, and where to find the best bonuses should continue on without much change.

While I happen to fall into the trust category, I still believe there will be a need for quality affiliates. With the power that affiliate marketing brings to online pure-play casinos, that same power can be leveraged for real world casinos if they were to come online. Think about 2 of the largest affiliate programs at eBay and Amazon (Walmart, Target, Best Buy and other "Bricks to Clicks" companies also have substantial affiliate programs online). If these major retailers see the value of an affiliate program, I don't see why MGM, Harrahs and others wouldn't recognize the same value. For the affiliate marketer, the market potential could actually expand if everything were legalized and droves of new players came online. However, many affiliate marketers will need to be more savvy and look for niches to survive and grow within like any other marketer.
 
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