The future of Internet wagering? All bets are off
Popular pursuit straddles the law in North America
Scott Cruickshank Calgary Herald
Monday, October 16, 2006

What are the odds that Internet gambling will continue to thrive in North America?

Nobody knows for sure. Call it uncharted wagers.

Millions own computers; millions surf daily (they could, if interested, google "online gambling" and get more than 76 million hits). Anyone with a credit card and a couple of well-placed clicks can be betting, literally, in minutes.

And people do love to test their luck.

According to one study, 82 per cent of Alberta adults have gambled, in some form, in the past year. One estimate pegs online bettors in the country at two per cent, but even that conservative figure adds up to hundreds of thousands of Canadians.

So what is the future of this momentum-gathering and law-straddling phenomenon?

- One researcher insists that the online wave is unstoppable. "Prohibition isn't going to work, but I'm not sure what the alternative would be," says Dr. Robert Wood, a professor of sociology at the University of Lethbridge. "You're not going to be able to stop people, that's for sure."

- One operator insists that the online betting boom is nearly kaput. "To be honest with you, I think the trend's going to wind up going back to where it used to be," says Travis Preston, general manager of Beteagle.com. "The Internet is probably going to reach its peak in the next year or two, maybe even three."

- One expert insists that tomorrow is unpredictable. "I don't know what the future will be, but there's definitely a big potential there," says David Schwartz, the director of the Center for Gaming Research, based at the University of Nevada, Las Vegas. "It's hard to say because there's not a lot of information for the illegal gambling, which has always been big."

Betting's a Grey Area

The reason for uncertainty is simple -- an undetermined lawfulness. This murk baffles even insiders.

Operating an Internet gambling site in Canada and the United States is unquestionably illegal. That's why online proprietors such as Preston and his Beteagle.com have skedaddled off North American soil.

Bettors, however, fall into a grey area.

"A lot of Canadians just assume it's legal," says Wood. "For us in our home in Canada to place a bet at an offshore gambling site, is that legal? Probably not, but it hasn't really been fully established through the courts yet. I've talked to judges, lawyers. The consensus I get is that it's very easily interpreted as being illegal."

No one, of course, envisioned online wagering -- or laws that would govern it. Hence, the current standoff.

"In sociology, we call that a culture lag," says Wood. "Culture and society are changing at a rate that outpaces changes in legislation. If you read the laws governing gambling in Canada, they're clearly based in early-20th-, late-19th-century society . . . referring to four-card monte . . . running numbers . . . games people don't play anymore. You get this Al Capone, 1920s, 1930s, gangster image.

"So the law has to contort itself to accommodate these new realities. And that's what's going on with Internet gambling."

Which leaves Canadian and American governments with three options.

Turning a blind eye to the whole production. Or jumping in themselves with regulation.

Or, the fashionable choice, shutting it down completely.

"You'd have to ask yourself why governments would want prohibition," says Wood. "The answer is that they don't make any money from it . . . it actually costs them money in terms of the associated social and human costs. I just don't know how they're going to enforce it. I mean, how are they going to stop millions of

American adults from placing these bets at offshore sites?"

Preston does not agree.

Speaking from Beteagle.com's headquarters in Costa Rica, Preston predicts U.S. Congress will push for -- and get -- a blockade, effectively crimping the Internet racket.

Schwartz says regulation -- in other words, government participation -- may not be a bad way to go.

"It would make a lot of sense from a revenue standpoint because you could tax it," he says.

Sports columnist Frank Deford criticized the "puritanical hypocrisy" of the American lawmakers for their misguided crackdown. "Already, it's estimated that eight million Americans are betting something like

$6 billion online annually . . . if we don't permit and regulate online betting by law, then creeps from around the world will take our money, will let our children bet, will cheat and steal," Deford wrote on SI.com in August.

"We ought to follow the example of England -- legalize online sports betting, tax it and make lots of money on it so that we can spend the profits on things that our people need."

'A Dangerous Mix'

Legal hot spot aside, other areas of concern include two groups of bettors -- the underaged, the pathological. Not that they're mutually exclusive, either. Preston pooh-poohs the fear-mongering.

"I always read the story about the college kid who winds up robbing a bank to pay off his gambling debts or the kid who stole his father's credit card and maxed it out -- all these horror stories," Preston says. "There are a few stories that are going to get out that tend to make it seem like this is an absolute atrocity."

(True story -- A 20-year-old American tried to rob a bank to get out from under a $5,000 online-poker debt. Prison awaits him.)

Wood concludes there's trouble ahead. After all, what teen isn't hooked up these days?

"That's one of the biggest issues -- screening out prohibitive populations like minors," says Wood. "One of the ways they claim to get around that is to require credit cards. But kids can use a parent's credit card. And some kids under 18 or 19 . . . actually do have credit cards. So they really are at risk.

"And the more you see a league like the CFL implicitly promoting online gambling (with corporate partners such as PartyPoker.net and on-field advertisements for Bowmans.com), you're going to see a bigger increase among the youth, absolutely."

A recent survey showed that online gambling by American male college students has quadrupled since 2000. A preliminary study by Wood revealed equally striking trends.

"About four per cent of gamblers have a gambling problem, but they generate between 35 and 40 per cent of all the revenue (for government-approved games in Canada)," says Wood. "And the rate (of problem gambling for online users) was 10 times higher than it was for land-based gamblers."

But there's no mystery behind the popularity of online gambling.

They can shop around for, and always find, better odds.

"It's more comfortable to be able to sit around at their own pace," Preston says. "It's easier to get it visually, to see what's available. Due to that, our volume online . . . has gone up exponentially in this past year alone."

Rather than being funnelled into smoky and intimidating casinos, a fresh poker game is only a click away. They can play from their La-Z-Boy . . . any time of day . . . privately, anonymously, conveniently. "The ease, the lack of betting limits -- all these things are a dangerous mix for the potential problem gambler," says Wood.