internet gambling

Last night's edition of 60 Minutes was quite interesting. The 3 segments were on Internet Gambling, the current situation in New Orleans, and the rock band U2.

While I was certainly aware of gambling on the Internet and knew that it and the porn industry were the two big money makers I've never actually been to a gambling site so this segment on 60 Minutes really opened my eyes.

According to Nigel Payne, who runs Sportingbet, one of the world’s biggest online gambling companies, over 12 million citizens of the USA indulge in this activity. They contribute approximately 80% of the revenue to International gambling sites which rake in 10 billion in profits last year. That's not sales, folks, that's profit!

This is an interesting topic since online gambling is illegal in the USA. Of course it's quite difficult to regulate the Internet which is why so many US citizens are able to play--and thus sending about 8 billion in profits overseas where it can't be regulated or taxed by the US government.

Not very surprisingly some people in the US government are upset--but mostly it's people that want to enforce the current laws with more vigor. You'd think they'd want to legalize the gambling and derive tax income from it instead of trying to enforce laws that are nearly impossible given the nature of the Internet.

The other side of the coin, people wanting to legalize online gambling in the US, are headed by people in the traditional gambling industry. Their view is that since gambling is already legal in almost every state of the union--why should Internet gambling be illegal? For them, these laws bar them from a much more lucrative side of the gambling business since operating on the Internet would free them from many of the standard expenses of their business. No hotels to build, drinks or rooms to comp, no staff to hire beyond a few programmers.

My take on this is divided. Gambling, other than the stock market, doesn't appeal to me so I have no personal stake in this. On one hand, gambling is nasty on the underside and if legal on the Internet many people that shouldn't be gambling will be losing money that they can't afford to--and it's a lot easier to do this on your own computer than if you had to travel to a casino. The flipside to that is people are already gambling in the US despite it being illegal. As noted above--to the tune of over 8 billion dollars a year. Having it illegal isn't stopping it!

I guess it comes down to the government not wanting to infer respectability to gambling by having it be legal. Though that argument is pretty flimsy given that most states have at least a lottery and many have a serious gaming industry--with more states legalizing gambling all the time to get the easy tax revenue.

In the end, gambling is like drugs. People are going to do it anyway, so make laws you can enforce and tax the Hell out of what you can't enforce. Then hope for the best because you know things can get ugly.


I don't know anyone who ever stopped doing something just because it is/was illeagal.
Michelle said…
Great post David. I have been quite aware of the extent of Internet gambling.It's also illegal in Australia. I think it's an issue that's unsolvable. I guess it's like Internet fraud,phishing,morphing, pedophillia etc. If all countries don't agree to help each other in prosecuting, then it's a waste of time and money trying to prosecute anyone. China are pathetic in their laws regarding hightech crime. Australia, America and England appear to be the only ones serious about prosecuting anyone.
rf said…
Interesting post. I am an avid online gambler and fantasy sports player and place most of my bets online. I find the internet to be a great tool and even use resources like StatShark to help me make my picks. What a great sports forecastings tool.
Yaeli said…
What an interesting post! I was turned of gambiling a few years ago when I dated a guy who used to put $1800 in the pokies in a lunch hour. I hate to thing how much he gambles now with the explosion of internet gambling!
netchick said…
Ahh yes... An interesting topic! Strangely enough, although I'm an internet professional, and have created sites for people offering forex trades (close the the legalized form of gambling as you can get in the states) I've never actually met anyone who at least admits to participating in online gambling.

Here in Canada, it's a grey area... Our own government run lottery has an online gaming component, including sports bets. But, you have to prove that you live in BC to play online. It's a strange system. (
kenju said…
I know nothing about it; I didn't see the show last night. But I would never gamble like that, so it is a non-issue for me.
utenzi said…
Judy, I don't really agree with that. It's like drugs--even if you don't use them it's apt to affect your life sooner or later. Gambling is a serious problem so I don't think it's a non-issue for anyone but unfortunately I don't see any solution to it.

Tanya, I used to do site coding back during the dot com boom but I never did anything for a gambling site. I suspect a lot of their sites are state-of-the-art since they have so much money to toss about. At least the big ones do. It's probably a great area to make money in.

Yaeli, darling--you sure have some interesting dating experiences!

Jack, you're right. Most people modify behavior to try to stay out of trouble but they don't stop. They just find ways to do what they want without getting caught.
My 21 yr old son goes to a couple of those sites. It honestly makes me uneasy, knowing how people become addicted to it.

As someone who enjoys gambling, (Vegas and Laughlin Nevada)it can be a novel, enjoyable entertainment. Admittedly I don't see the fascination for these sites though. Unless you are SO hooked on the adrenaline of gambling...
Regarding this article, I'm of the mindset that the govenment might as well legalize it, and take a peice of the pie. At least dollars spent on them will have some good use here in the U.S.

Good article Utenzi!

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