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Internet Gambling: Prohibit or Legalize?
by George W. Zobrist
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Internet
gambling: placing, receiving or otherwise
transmitting a bet or wager by any means that involves the use,
in whole or part, of the Internet where such a bet or wager is
unlawful under any applicable federal or state law in the state
in which the bet or wager is initiated, received or otherwise
made. |
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Internet
gambling’s popularity continues to gain momentum, but
determining its illegality is still ambiguous. Many states allow
gambling in one form or another, and many are stepping up
efforts to prohibit Internet gambling. In addition to the need
to preserve state revenues, states are claiming potential fraud,
access by children and increased addiction as their main reasons
for pushing prohibition.
Internet
Gambling on the Rise
There seems to
be a tremendous demand for Internet gambling, perhaps fed by
many people’s love for gambling. People crowd gambling casinos, purchase state lottery tickets, frequent
racetracks and participate in other legal gambling activities.
According to a 1995 survey on American gambling habits, 56
percent of respondents claimed they gambled. In 1998, estimates
were that more than $600 billion would be wagered, of which
about $100 billion would be placed illegally. Estimates made in
2002 by Cato Institute put online gambling revenues at $3
billion.
Seemingly, the
force that will one day make Internet gambling legal is that it
could be a revenue source for the states and the federal
government. The same political forces that led to legalizing the
forms of legal gambling that we have now will most likely lead
efforts to legalizing Internet gambling.
On the other
hand, prohibition would accelerate the movement of
Internet casinos offshore; Antigua, Australia and New Zealand
are already home to many online gambling sites. If this were to
be the case, the United States would have little or no control
over those sites' activities. One major
technical issue related to Internet gambling relates to fairness
and validity of results. Internet gamblers have no way of
knowing whether odds are being manipulated, whether game results
are true or false, or whether a random number rather than a
sequence of events determines a result. Further, they have no
assurance that winnings will be credited properly. Finally,
there are no measures in place to stop operators who shut down a
site when too many gamblers win in a particular scenario, and
then open another (refer to article by C. Hall and B. Schneier at
csdl.computer.org).
Legislative
Efforts Under Way
The bills to
prohibit Internet gambling currently before Congress are all in
various stages of committee action. While the public has offered
little opposition to prohibition, Internet casinos and their
“asset backers” have waged strong lobbying efforts against the
bills. H.R. 21, H.R. 2143 and S. 627 would prevent the use of
certain bank instruments — credit cards and fund transfers in
particular — for Internet gambling. The language seems to be
intended to prohibit businesses from transferring or receiving
money, rather than being directed toward gamblers. The bills all
list numerous exemptions, however, to protect already-legal
forms of gambling that have “online” aspects. These include
Off-Track Betting (OTB) and certain forms of wagering that make
use of telephone landlines.
Would
Legalizing Be a Plus?
There are some benefits — albeit arguable
ones —
to be gained by legalizing Internet gambling. For example, doing
so would enable the private sector to increase the bandwidth of
the Internet. Further, Internet gambling addresses critics’
concerns about casino environments, enabling individuals to
gamble from their homes instead. Finally, there’s an altruistic
claim that gambling consumers should have the same access to and
receive the same benefits from competition as other consumers
have and get from other forms of commerce (www.cato.org).
Legalize
and Keep Onshore?
Banning Internet gambling
in the United States
would likely spur more offshore Internet sites, making it
difficult to control. Prosecuting offshore entities is nearly
impossible. As with “SPAM” laws, locating a site’s source is
often difficult; with offshore gambling sites, even if we could
identify offshore operators, it would be difficult to prosecute
non-citizens. Further, encouraging other countries to enforce
U.S. Internet gambling laws would be a long shot at best. So, if
Internet gambling is to become an accepted form of gambling, it
might be best to legalize and control it within U.S. borders.
For More
Information
IEEE and
IEEE-USA have published papers that discuss the technical
aspects of online gambling — generating random bits and
permutations for casino games; player-player and player-dealer
collusions; secure audit trails; etc. Go to
www.ieee.org and
www.ieeeusa.org and search
for Internet Gambling or Remote Electronic Gambling.
Other sites carry information about Internet gambling. You can
search www.google.com using
the same keywords, or visit:
You can access
the related technical bills currently before Congress at
http://dsonline.computer.org/techbills/index.htm.
Dr. George
W. Zobrist is professor emeritus at the University of
Missouri-Rolla, Department of Computer Science, and IEEE-USA's
Member Activities editor.
Comments may be submitted
to
todaysengineer@ieee.org. Opinions expressed are the
author's.
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