Online Gambling
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In our society today, computer
technology plays an important role in many forms of entertainment, especially in
the field of online casino. As
technology advances, net gambling is becoming more and more popular.
While its popularity is skyrocketing, ambiguity surrounds its legality.
Although most states allow some form of gambling activities, many states
seek to prohibit online gambling because of the potential for fraud over the
Internet, children's access to gambling sites, an increase in gambling
addictions, and the need to preserve state revenues generated from legally
enforced (and state-run) gambling operations.
In
order to understand the first concern about the potential for fraud over the
Internet, one must understand how a typical Internet gambling site works:
Gamblers provide their credit card numbers and social security numbers, or mail
in deposits between $100 to $500, to open up accounts. On-site operators receive the bets that the gambler places.
On-site operators use computers to run complex programs to simulate gambling
games, such as the spin of a roulette wheel. Upon completion of a game, an
on-site operator reports back to the gambler to notify whether they have won or
lost. The design of an online
gambling site precludes gamblers from investigating whether games are operated
fairly. Therefore, gamblers are at
the mercy of those on-site operators who manipulate the odds or who falsely
report game results. According to
Bernard Horn of the National Coalition Against Gambling Expansion states,
"there's just no way to tell if virtual dice, roulette or cards are rolled,
spun or dealt randomly...or whether they're responding to a sequence...to cheat
customers." In contrast,
traditional casinos are investigated to ensure that gamblers are provided with
fair opportunities to win. A
further problem of online gambling is that on-site operators will not properly
credit winnings. If on-site
operators fail to properly credit winnings, gamblers will have a lot of
difficulty finding on-site operators in cyberspace.
Often, when too many gamblers win, online operators simply shut down
their web sites and open new online gambling sites.
A
second problem with online gambling is the ease with which children can access
cyber-casinos. This easy accessibility stems, in part, from the pervasiveness of
the Internet in homes. "Having
a casino in one's home only encourages gambling addicts and sparks that interest
of children" (Bob Goodlatte, 1999). In
addition, it is possible that some children using their parent user name and
password to gamble on the net without their parent notice because people usually
save their user name and password in "login" to avoid the hassle of
logging in each time. A further
possible danger is if the children notice their parent's credit card number,
they might use it to gamble on the net too. In psychology study, most of the children are not mature
enough to know whether it is right or wrong.
They just do it out of their curiosity.
A
third problem is that online gambling will lead to a rise in gambling
addictions. Gambling addictions may increase because of the detached gambling
environment on the Internet. The Internet provides a detached gambling
atmosphere because there is no tangible representation of money, such as chips,
being won or lost over the Internet. As
a result, gamblers may lose track of how much money is being won or lost and may
gamble beyond their means. For
example, there had a recent report said that a woman called Cynthia Haines had
lost her consciousness from losing a lot money when she used her credit cards to
gamble over the Internet from her home in California.
When she realized she was losing money, her credit issuer, Providian
National Bank, sued her due to unpaid bill.
In contrast, at traditional casinos, gamblers are able to see how many
chips are being won or lost and, consequently, they may gamble in moderation.
Although
unspoken by most state officials, a fourth reason why states want to prohibit
online gambling may be the need to protect state revenues generated by legal and
state-run gambling operations. States profit from taxes on winnings and net
revenues from legalized gambling. The
legalization of Internet gambling may cause states to lose some revenue
generated from legalized gambling operations because many gamblers would spend
their money online. Moreover,
states lose revenue by not being able to tax gamblers who win over the Internet;
gamblers who win over the Internet have an incentive not to pay tax on their
winnings because the Internal Revenue Service ("IRS") lacks the
resources to track online gamblers.
In
light of the four problems of online gambling, states have taken action to
prohibit Internet gambling. Some
states have already relied on state gambling laws or consumer protection laws to
prohibit online gambling. Although
some states have taken decisive action to prohibit or regulate online gambling,
state regulation is largely ineffective because the Internet transcends state
and national boundaries. Until
recently, the federal government has played a minimal role in regulating
gambling, leaving the states to adopt their own laws and regulations.
However, because Internet gambling transcends state boundaries and is
difficult for states to regulate, the online gambling laws are still unclear.