Online Betting Is Booming, Despite Critics

Explosive Growth, Unchecked by Law

But he appears to have little to fret over, at least for now. That's because efforts by lawmakers to
fight to outlaw the expanding Internet-based gambling industry have so far come to naught.
And if Congress is not able to tie up anti-gaming legislation soon, Sen. Richard Bryan, R-Nev.,
recently speculated, some big Nevada casino companies might be tempted to launch their own Web-
based gaming operations.
Starrs is president of Antigua-based Starnet Systems, one of a number of Internet gambling
operations that have increasingly come under the scrutiny of U.S. lawmakers who would like to put
online gaming out of business.
Anti-gaming legislation, citing the dangers of addiction, crime and consumer debt, first made its way
before Congress in early 1997. After working its way through the House at a snail's pace, those
those legislative efforts have recently become sidetracked.
But so far, legislators have remained unable to push through Congress any substantial measures to
curb Web wagering.
Online gaming -- operated mostly by offshore, unregulated companies -- has grown at an explosive
rate. There are now over 250 online casinos, 64 lotteries, 20 bingo games and 139 sports books in
operation on the Internet, according to the National Gambling Impact Study Commission.
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The trade group that represents the commercial casino entertainment industry disagrees with that
assessment. Accoring to John Shelk, vice president of the American Gaming Association in
Washington, D.C., the mounting legal barriers will make it difficult for casino companies to get into
online gaming.
In late June, Christian activists and conservatives pressured House Republican leaders into
withdrawing the Internet Gambling Prohibition Act (H.R. 3125), a. Email marketing could be greater
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Pop-up advertisements or other internet advertising frequently obstruct of exactly what the possible
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marketing is the content.bill that prohibits gambling businesses from taking bets or wagers over the
Internet, in order to toughen its language and alter its exceptions.
Despite the anti-gaming efforts, the use of gambling Web sites continues to rise, says Ed Lopez, an
analyst at Cyber Dialogue, an Internet services and research firm based in New York.
Lack of Jobs, Taxes Cited
Starrs remains concerned that U.S. laws to do away with gambling on the Net could harm his
company, which licenses customized Internet gaming software to 60 Web-based gaming operations
that derive about $2 billion from wagers placed in the United States.
Another anti-gaming bill's prospects are also in doubt, say experts. The measure, H.R. 4419, is
designed to stem the flow of funds to Web-based wagering sites by prohibiting the use of credit
cards or other financial instruments for Internet gambling transactions. Most online gambling sites
accept payment via credit card or let you wire cash electronically.
"They think that this bill will stop people with credit using these sites," says Sebastian Sinclair, an
Internet analyst at investment bank Christiansen Capital Advisors in New York. "But these
companies will simply open an account for consumers at an offshore bank."
And in the absence of such laws, say observers, Internet gambling has flourished.
Growth Amid Legislative Inaction
Ed Starrs may be a gambling man, but his latest bet has him worried.
The number of Web-based gaming site users in the United States grew to 5.2 million in the first
quarter of this year, up from 3.4 million in the third quarter of 1999, according to Cyber Dialogue.
Bills Sidetracked in Congress