|
| |
U.S. Gambling Culture Spreads to Wall Street
Published: 2005-12-30
 In 1995 we saw the emergence of internet casino gambling, which includes playing games of
chance such as poker, blackjack, and roulette as well as betting on sports events. By the
year 2000, nearly 300 companies around the world operated almost 2,000 internet gambling
websites. And in 2005, worldwide online gambling revenue is expected to be over $US10
billion for such operators while a total of $US 200 billion is expected to have been
wagered.
Widely an issue of intense debate since its inception, the criminality of online gambling
has been argued at the U.S. Department of Justice as well as in the halls of the U.S.
Congress. But since internet gaming sites are primarily offshore, U.S. residents are
presently not held accountable for breaking federal law in the absence of such precedent.
However, individual states may mandate such practices illegal, going after banking
institutions to prevent such transactions, for example, but individuals have not been
prosecuted.
The prevalence of online gaming and the large revenues enjoyed from it has however
prompted major U.S. brokerage firms to claim their piece of the pie. At stake is whether
or not the Department of Justice will apply the Wire Act of 1961 in enforcing the law and
how long it will be before the Congress can agree on passing new legislation which will
help strengthen the Wire Act. The main dispute is that the Wire Act was intended
exclusively for placing bets on the phone to bookmakers for sports events, and was largely
put in place by then Attorney General, Robert F. Kennedy, in order to discourage organized
crime and bookmaking. Whether the law now applies to communication between a home computer
and an establishment or casino not located in the U.S. still remains a gray area.
But in the era of industrial globalization, it appears that firms such as Goldman Sachs &
Co., Merrill Lynch & Co. and Fidelity Investments are willing to risk the vagueness of the
law in order to make investments on behalf of their clients by way of stocks and mutual
funds. By providing financing for offshore casinos the question remains whether they are
skirting the law as well as whether they are making reliable investments for their
clients, for whom most have no idea that their mutual funds are involved in such ventures.
It is now commonplace for American firms to invest in overseas corporations, even those
which may be considered illegal under U.S. federal law, such as those manufacturers
utilizing sweatshops and child labor or by outsourcing business to countries which do
business with other countries sanctioned by the U.S. government. However, the issue of
online gaming is perhaps just the latest industry in worldwide commerce in which laws and
customs have not yet caught up to it, given the sophistication of the technology involved.
The argument is whether someone who generates a gambling transaction from their living
room to a country outside of the U.S. qualifies as an illegal U.S. transaction and whether
or not it can be reasonably policed beyond U.S. shores. In addition to the Wire Act, the
Professional and Amateur Sports Protection Act was enacted in 1992, which banned all
wagering on sports events in all states except those with pre-existing operations in the
states of Nevada, Oregon and Delaware. That was followed by both President Clinton’s
administration as well as the present President Bush’s administration both of which
conveyed that the Wire Act applied to all forms of internet gambling and therefore illegal
under existing law.
Yet the U.S. Court of Appeals for the Fifth Circuit in 2002 interpreted the Wire Act in
another way. In Thompson v. MasterCard International et. al., the court affirmed a lower
court ruling that according to federal statutes sports betting conducted over the internet
is illegal, but casino games are legal. As such, since the Wire Act was specifically
enacted to prevent sports betting, it would seem that the court got it right, with the
gambling industry arguing that banning online gaming would require additional legislation.
And in 2004 the World Trade Organization got their say when the Caribbean Island nation of
Antigua sued the U.S. government in 2003 in an effort to block U.S. actions to prohibit
online gaming. The WTO ruled that the U.S. government was in violation of commercial
services accords, and that the U.S. could be subject to trade sanctions. But Elliott
Spitzer, New York State Attorney General, through his Internet Bureau Office lodged an
investigation against national banking institutions based out of New York such as
Citibank, N.A., Bank of America, N.A., JP Morgan Chase & Co. and MBNA America Bank, N.A.,
that process credit card transactions online. They as well as Visa and MasterCard agreed
to voluntarily block transactions to online gambling sites with respect to the laws of the
state of New York. However, other states must set up their own mechanisms in preventing
such gambling.
While the societal impact of gambling has been debated endlessly for decades, from mental
health issues to risk of bankruptcy, the evils of gambling will continue to prey upon
those most vulnerable. However, the repercussions of online gambling are too new for them
to be realized as yet on a grand scale. And while we hear of more and more minor children
and young adults using credit cards to participate in online gaming, according to experts,
more research and education needs to be done in order to warn children and their parents
about irresponsible gambling.
But with respect to those who choose not to gamble, the issue of brokerage houses
maintaining mutual funds, unbeknownst to their clients, by investing in offshore betting
by way of the internet, will perhaps present unanticipated complaints, once consumers
become more aware of how their life savings are being invested.
As such, Americans should have the choice of investing in a product which has been deemed
illegal by several U.S. administrations. Without a clear and decisive law, which does not
conflict with cyberspace jurisdiction as well as world trade policies, such transactions
continue to go on unabated.
Until there is legal clarity, however, the online gambling industry will continue to trump
any perceived notion of criminality. And since 2005 saw no new legislation proposed by
either the House of Representatives or the Senate to restrict online gaming, it appears
that the U.S. would rather gamble itself, in doing nothing about it, rather than protect
its consumers and those most susceptible to its ills. Rather than owning up to their
responsibilities to protect the interests of the American people and thereby U.S.
consumers, both the U.S. government and U.S. corporations would rather wager that most
will not care about their cashing in, either.
By D. M. Grassi
| |
Cindy Margolis and Cyndy Violette Are Teaming Up
Published: 2005-12-29
 The Two Are Launching a Poker Site
by Bob Pajich
There’s a new dynamic duo on the block.
Cindy Margolis, the self-titled “Most Downloaded Woman,” has teamed up with poker great Cyndy Violette to launch a website that will show off Violette’s teaching skills and Margolis’s marketing savvy.
CindyMargolisPoker.com will be launched sometime in January.
The website will be designed to harness the celebrity powers of both the blondes. Violette will be teaching the amateur poker player Margolis how to become a winner, and Margolis promises to generate publicity for them both, according to the press release.
Violette first achieved poker fame in 1984 when she won a seven-card stud tournament at the Golden Nugget and took home $74,000, which was the largest purse ever won by a woman at a tournament. An article in Playboy Magazine propelled her into the spotlight and she appeared on several television shows.
Violette took a breather from poker until 1990, when she won $62,000 in a tournament she entered on a whim. She’s been back ever since.
If Howard Stern is the “King of all Media,” Margolis might be the queen. The supermodel, author, television host and star of her own show on VH1, cover girl, and comic book character can add another line to her resume: spokesperson for Chipleaders.
Chipleaders.com is the official online community for the World Poker Tour. Margolis became the spokesperson for the site earlier this month.
| | |
|
