Chicago, IL.- Regulation of online gambling is emerging in the United States and elsewhere, but that is not likely to slow the worldwide phenomenon, experts told UPI's The Web.
The World Trade Organization last week ruled the U.S. government could regulate Internet gambling and authorities in the United Kingdom are establishing a new public body to police online gaming activities.
"We hope that at some point it does get regulated," said Jessica Rovello, chairman of Arkadium.com in New York City, an online wagering forum. "We don't want to see people taking out a second mortgage to finance an online poker game."
Rather than restraining the international trade in gaming, such new rules and authorities actually are expected to help foster further growth of the $7.5 billion business.
There are two primary kinds of online wagering sites: those that offer blackjack and other games of chance, and those that provide games of skill, like chess.
Many Internet gaming purveyors, such as Bodog.com in San Jose, Costa Rica, have been around for 10 years, but U.S. government officials worry offshore betting sites could be commandeered by organized crime, or become havens for money laundering or fraud. The WTO's ruling indicates the United States can regulate online gambling to preserve public order, as well as morals.
Historically, state governments have regulated gambling, which occurred at land-based or riverboat casinos, though the feds have stepped in occasionally to fight organized crime and now with Internet gambling because of concerns about international trade.
Calvin Ayre, founder and chief executive officer of Bodog.com, said now that the WTO has ruled there will be a shift in perception around the world leading consumers to regard online gaming companies as "more legitimate."
"The United States is a powerful and large country and every few years the U.S. Department of Justice got all up in arms about Internet gambling," said Ayre, a Canadian national. "They would send out letters threatening repercussions if magazines and others took advertising dollars from overseas gaming. That was a method to stop Internet gambling without creating a legal precedent, but it proved to be a hollow threat."
The WTO's ruling likely will change that behavior by the government -- and force it to adopt more straightforward regulation, Ayre said.
"This is definitely going to have an impact," Ayre said. "This is the ruling we had hoped for. The WTO has said that what we do is legal under international law."
Experts think what is likely to happen in the United States may be similar to what is happening now in the United Kingdom.
Last week, the British Parliament passed the Gambling Bill, creating a new commission to police the industry. As part of the law, the commission, staffed with 100 investigators, will monitor the U.K. domestic online gaming industry. The agency will not be able to ban overseas casinos, but it will be empowered to regulate their advertising to U.K. consumers. Those who run afoul of the laws will be subject to prosecution or they may be fined. Fraudulent bets can be canceled by regulators.
Not all online casino operators are happy with the state of affairs, however.
"I'm finding the whole thing a bit frustrating," said Dennis Rose, president of Casino Fortune, which operates in the Caribbean and is one of the top three online casinos in the world.
Rose said he is concerned government officials are treating online casinos as if they were modern-day equivalents of gangster Al Capone's operations. What they really are, from his point of view, is an inexpensive way for middle-income individuals to unwind online after a stressful day at the office.
"We have hundreds of thousands of players who enjoy the product," Rose said. "We have people who enjoy playing for $20, $30 or $40 for a few hours of action. You can't drive to a regular casino with that kind of money and do that."
High-rollers generally play in Las Vegas or elsewhere -- not on the Web, he said. "We don't have a lot of whales (big spenders)."
Rose noted the lowest bid on blackjack games at his casino is 10 cents. The site employs a bevy of computer programmers to keep the games interesting and realistic. "Our guys are brilliant," he added.
Casino Fortune is looking to launch an online poker site soon, and a site for games of skill like Solitaire. "We're looking to expand," Rose said.
The skilled wagering business, at least online, might be the biggest area of growth, experts said.
"Skilled gaming is up and coming -- it differentiates itself from gambling," Rovello said. "It is regulated on a state-by-state basis. The player's skill determines the outcome. I can play you in chess, as opposed to playing the house in blackjack."
The maximum anyone can wager in one of Arkadium.com's games of skill is $25 and the most they can spend in a given month is $250, she said.
"What we found when we started researching the market was that women 35 and older would be the audience," said Rovello, who has a technical and marketing background. "That turned out to be correct. Online Mahjong and traditional Solitaire are our biggest games."