For critics of online gambling, the Neteller case and a flurry of other high-profile prosecutions are welcome crackdowns on a murky and unregulated industry. "It's an underworld wrought with scams and schemes," said Kentucky Gov. Steve Beshear (D), spearheading a state effort to block online bets.
But to some legal scholars and Internet gambling proponents, the government's efforts highlight a widening disconnect between 21st-century technology and the 20th-century laws used to protect Americans from gambling. "Congress shouldn't be trying to make criminals out of people who have taken the game from the kitchen table to the computer table," said John Pappas, executive director of the Poker Players Alliance, a Washington lobbying group claiming just under 1 million members.
The alliance and other backers are pushing for the federal government to license and regulate Internet gambling. They say that the current ban leaves players vulnerable to abuse at loosely regulated offshore sites, as occurred in the AbsolutePoker and UltimateBet cheating scandals. Gambling is already widespread, with casinos, slots parlors and state lotteries. The government would be better off collecting tax revenue and creating strong laws to prevent cheating, they argue.
Until a decade ago, gamblers had limited choices. They could go to a casino or horse track in states with legalized betting, or find a private poker game. The Internet erased those borders: Players now can jump from site to site on the Web, bypassing regulators at home. When Neteller retreated from the U.S. market, Internet poker pro Serge Ravitch simply switched to another firm to handle his accounts. "It took two minutes," he said. Online poker players pay for their bets in a variety of ways, including prepaid debit cards, electronic transfers and bank wires.
Initially, most Internet gambling sites were sports books and online casinos based in Caribbean and Central American countries with low taxes and minimal regulations, according to a recent study by Canadian researchers Robert J. Williams and Robert T. Wood. In January 1996, an Internet casino in Antigua became the first to accept a wager, followed two years later by the first online poker room.