Internet Gambling Regulations example essay topic

Overview of topic and issues discussed Gambling in any form has been controversial since before history could document it. There are sections of the Bible that forbid gambling in any form. Gambling is legal in parts of the United States such as in Las Vegas Nevada, Atlantic City on the East coast and on various Indian Tribal grounds spread widely across the rest of the United States. The establishments in these areas are well regulated.

With the creation of the Internet, gambling has found a way to permeate all parts of the globe. Any computer with internet access can gamble regardless of local laws. Internet gambling was one of the first websites created as the internet became more popular in the early 1990's. Since then it has grown in popularity at an explosive rate. Most of the Internet gambling websites are hosted and based in foreign countries in order to evade the laws of the United States. Since most websites are not based in the United States the laws used to govern each site vary greatly.

This lack of regulation is where the main arguments concerning Internet Gambling reside. There are four pending pieces of legislation relating to Internet Gambling in the House of Representatives and Congress. The potential laws vary in their aims from cutting off the financial United States banking and credit resources to creating a regulatory commission that would oversee it all. The website web lays out a summary of the Pending Legislation: "A number of bills concerning Internet gambling are currently pending in Congress. Three of these bills, two in the House and one in the Senate, seek to prevent funding of Internet gambling through the use of bank instruments. There is significant disagreement in the House, however, over the specific language and scope of the legislation.

A fourth bill, currently pending in the House, would create an Internet gambling licensing and regulation commission. HR 21, also known as the Unlawful Internet Gambling Funding Prohibition Act, was introduced in the House in January 2003. The bill seeks to prohibit the use of credit, electronic funds transfers, instruments payable through a financial institution, or any financial transaction involving a financial institution to fund Internet gambling activities. The bill also encourages communication with foreign countries to root out Internet gambling operations connected with money laundering, and to ensure international cooperation with the Act. Additionally, HR 21 requires the Secretary of the Treasury to prescribe regulations relating to payment systems and compliance with the Act.

Finally, HR 21 provides certain civil and criminal penalties for violations of the Act. The House Committee on the Judiciary passed HR 21 in May of 2003. HR 2143, also pending in the House, was introduced in the House in May of 2003 as a revision of HR 21 in part of a growing debate over the extent to which Internet gambling should be regulated. HR 2143 contains the same restrictive provisions as HR 21 that relate to funding of Internet gambling, however, HR 2143 provides exemptions for state-licensed businesses.

HR 2143 also does not provide civil and criminal penalties for violations of the Act. The House Financial Services Committee approved HR 2143, however it has been pulled from the House floor twice for fear that the controversy over the language would kill the bill. The disagreement over these bills focuses mainly on the question of whether states should have the ability to regulate and exempt certain businesses from Internet gambling prohibition. The debate is being led by the Chairs of the House Financial Services Committee, which has backed HR 2143, and the House Committee on the Judiciary, which supports HR 21. It is unclear whether HR 21 or HR 2143 will pass either house, as two previous bills, HR 556 and HR 4419, have failed in recent years to pass the Senate and the House, respectively. S 627, currently pending in the Senate, is another bill seeking to prevent funding of Internet gambling through financial institutions.

The bill contains the same restrictive, regulatory, and punitive provisions as HR 21, but it differs in that it would create the Office of Electronic Funding Oversight within the Department of Treasury to issue regulations and carry out the intent of the Act. The Senate referred S 627 to the Senate Committee on Banking, Housing and Urban Affairs in March of 2003. HR 1223, another pending bill concerning Internet gambling, is also known as the Internet Gambling Licensing and Regulation Commission Act. This legislation seeks to create a Commission whose task is to study and propose changes to the existing laws and issues concerning Internet gambling. Major issues the bill seeks to address include money laundering in connection with online gaming activities, use of financial institutions to fund Internet gambling, availability of international cooperation with any proposed legislation, and the scope of Internet gambling regulation in the European Union. The Commission would be required to complete its study and issue a report within one year of its creation.

The House referred the bill to the Subcommittee on Crime, Terrorism and Homeland Security, to the Subcommittee on Telecommunications and the Internet, and to the Subcommittee on Financial Institutions and Consumer Credit". With the Internet Gambling industry being valued at $49 billion dollars (web) it becomes clear why a lack of regulation means big bucks. Background, description, and / or history of the topic Gambling in and of it self is as old as we can document, as stated above, there are sections of the Bible that relate to the subject. However with the spread of the Internet coming to fruition, more and more people are finding themselves using their personal computers to wager bets online rather than in the traditional Casinos. The Merriam- Webster Online Dictionary (web) defines gambling as "1 a: to play a game for money or property b: to bet on an uncertain outcome 2: to stake something on a contingency: take a chance transitive senses" Gambling Online is essentially the same in definition yet it uses a computer and an internet connection to place wagers. The online resources found at web lay out a brief history of Online Gambling.

"Online gambling is increasing at a staggering rate, while the history of the industry is still as new as the Internet itself. The world's first virtual online casino, Internet Casinos, Inc. (ICI) commenced operation on August 18, 1995 with 18 different casino games, online access to the National Indian Lottery, and plans to launch an Internet sports book. A second gambling site is also currently operating with an active sports book and plans to launch an online casino in the spring of 1996. The Interactive Gaming & Communications Corp. (BET) is a publicly traded company listed on the NASDAQ Bulletin Board. The company accepts bettors's ports wagers phoned in to Antigua on a toll free line via satellite.

Some foreign governments have also entered the business holding their sites out to people worldwide. For instance, the government of Liechtenstein is operating an online international lottery in six different languages, including Chinese. Several other Internet companies have also announced plans to launch their own online casinos in the near future. In all, according to Rolling Good Times Online gambling magazine, there are 452 gambling-related sites on the net and more are up and running every day. Most of these online gambling companies are located outside of the U.S. to avoid government prosecution. ICI operates out of the Turks and Caicos Islands and Wager Net is based in Belize.

Site users can either send cash through one of the companies offering secure payment systems for the Internet or open an offshore account, a requirement for Americans to use ICI's site. Bets can be as low as a nickel for certain slot machines and go into the thousands of dollars. The economics of the industry are amazing. While it may cost up to $300 million to build a new resort casino, ICI's virtual casino was developed for only $1.5 million and employs only seventeen (17) individuals as opposed to thousands for a traditional casino. ICI estimates that the company averages about a twenty four (24%) profit margin, versus the typical U.S. casino, which ranges between eight percent (8%) to sixteen (16%) of each dollar wagered.

Interactive Gaming & Communications's ports International handled $48 million dollars in its first year of 800 telephone line operations and made a staggering profit. In sum, an estimated twenty million people are currently on line with a projected 160 million online by the year 2020. ICI has received over 40,000 registrations for its service since its beginning and registers over 7,000,000 visits per month at its site. With over $500 billion spent on legal and illegal gambling in the U.S. alone in 1993, it's estimated that over ninety percent (90%) of adults participate in some form of gambling. The overall market for online gambling is estimated to be approximately $49 billion worldwide".

Issues (related to the course material), with various points of view The General Pros and Cons of Online Casino Gambling web does an excellent job outlining the pros and cons of online casino gambling. "There can be no debate that online casino gambling is a lot different than gambling in a physical casino. In some ways it is better and in some ways it is worse. Below are my pros and cons of online casino gambling, based on my personal experiences, compared to gambling in a "real" casino. The Pros: 1. Online casino gambling is a competitive business and many casinos will offer a lot to get and keep your online casino gambling business.

Many will offer sign-up bonuses to new customers, adding 10 to 50% of their initial deposit to their bankroll (see below for more on this subject). Some will randomly deposit money in customer accounts and others will give away vacations for specified levels of total money bet. 2. The rules are usually better than in physical casinos. 3. You don't have to travel long distances.

The casino is in your own home. 4. You don't have to suffer real casino annoyances, like smokers. 5. You don't have to feel obligated to tip.

The Cons: 1. You have to be patient about getting your money after you cash out. In addition to waiting periods on the casino end there are also delays on the credit card end. Two to four weeks is the norm for the time between cashing out and your credit appearing back on your credit card.

Debit cards are much faster taking only about 3 to 5 business days. 2. Customer service can be spotty depending on where you do your online casino gambling. Some places offer great service via e-mail and a toll-free number.

Others take several days to reply to an e-mail, have no known telephone number, and generally seem like they just don't want to be bothered aside from taking your money. The latter are the places you don't want to be dealing with. 3. The player has no power or authority to turn to in the event of a dispute.

Usually in the player agreement it says the casino can make up the rules as they go and in the event of a dispute the casino's word is final. 4. If you play at a lot of places your credit / debit card statement will be a nightmare to balance. Transactions seldom indicate the name of the casino you played at but instead specify the merchant bank". Nevada based Internet Gambling Regulations "Nevada may soon regulate Internet gambling and allow land-based casinos like Caesar's Palace and MGM Grand to operate online casinos. What can players expect when gambling at Nevada-regulated Internet casinos and how will these casinos be different from existing unregulated, offshore Web casinos?

Let's look at a few of the possible pros and cons of gambling at an Internet casino regulated by the Nevada government". (web) The following pros are given for Nevada regulated online gambling: "Cash transactions will be secure and payouts assured. Casino software will be strictly tested to assure randomness and fairness. Minors will be effectively screened out. Casinos may be required to meet a minimum payout on slot machines.

Players will earn loyalty points they can use on their next trip to Las Vegas. In the end, most players will appreciate the security and trustworthiness of Nevada-regulated Internet casinos, but the taxation policy and onerous sign-up procedures may force some players to seek unregulated, offshore gambling action". (web) Here are some just a couple of the cons related to Nevada based online gambling: "Winnings may be taxable and reported to the IRS. Players may be required to jump through hoops to verify their age and location before they play. This could involve faxing your driver's license to the casino or even attaching a Global Positioning System (GPS) to your computer".

Comments or evaluation "This paper explores the political and social implications of the emerging online gambling industry and the ability of the existing legal framework to halt the industry's development. Making gambling more broadly available via the networks threatens heightened crime, an increased incidence of compulsive gambling, and cannibalized spending in other areas of the economy. Yet, U.S. state and federal laws are inadequate to deal with the onslaught of virtual gaming. States are unlikely to be able to prosecute out of state casino operators operating in cyberspace.

Although they may be able to prosecute their own citizens for gambling on-line, enforcement will be difficult. Federal statutes may criminalize cyberspace casinos, but the U.S. government's ability to prosecute foreign operators is questionable. As existing legal frameworks prove inadequate to deal with a global, intangible entity, new legal, technological, and political solutions will have to be crafted in order to protect Americans from the substantial externalities posed by on-line gambling". (web) Summary The future of Internet gambling is anything but clear. The many opponents of Internet gambling point to the possible harms that already do, and will continue to, flow from its existence. While regulation or an all-out ban seems ideal to some, others argue that due to the nature of the internet and the gambling industry, any attempts at regulation will have a minor impact. List of references used Arent fox. com, 2004 web Ascus c. org, 2004 web Kyroslaw. com, 2004 web Merriam - Webster Online Dictionary, 2004 web Slot advisor. com, 2004 web.