Get ready to place your bets on the Net

You don't have to fly to Las Vegas to experience the highs and lows of gambling. Milly Jenkins explores the as-yet-unregulated world of online casinos

"People just love to gamble," says Claude Levy gleefully. "And there are a lot of people on the Internet." You can almost hear the sound of rubbing hands all the way from Belgium, where, in the last three months, his company has launched 29 online casinos. Another 30 will go live this month, mostly named after places they bear absolutely no relation to but have all the "glamour" of - like Monte Carlo.com or Nevada.com.

"Namblers", as online gamesters are sometimes known, would never guess on first entering his British Casino site, with its Bond-style depiction of a Rolls-Royce parked outside a front door which looks suspiciously like Number 10, that they are in fact using a service based in Brussels and run off computers in Delaware.

But then geography is a moot point when it comes to online gambling. Most sites are based in the Caribbean - Belize, Antigua and Costa Rica - where anyone can set up a casino for a few hundred thousand pounds, with few legal restrictions to worry about and no tax to pay. A one-off payment to the authorities is usually all that is required. Many of the operators are American, but, with an estimated $450m now being wagered online every year, all those dollars flowing in are good news for Caribbean economies.

However, not everyone is delighted. America's anti-gambling lobby is hoping that a bill put forward by Republican Senator Jon Kyl, due to be debated by the Senate soon, will put the kibosh on all US online gambling. Under current US law, gambling is illegal in most states and in the states where it isn't, like Nevada and New Jersey, a federal law prohibits anyone taking bets over a network - including the Internet - which crosses state lines or international borders. (How Claude Levy gets round this isn't quite clear, but he insists that "US law doesn't clearly say that online casinos are not legal").

If passed, Senator Kyl's Internet Gambling Prohibition Act would punish not only those who accept online wagers but also the gamblers themselves - anyone caught putting an illicit wager on the Super Bowl with a Caribbean sports book could face a $500 fine and up to three months in prison. There is little that can be done about offshore operators, although in Florida the state's attorney general has managed to persuade Western Union to stop wiring money from gamblers to the islands.

To the outsider, US gambling laws seem to be riddled with contradictions. It is hard to see the logic, for example, of lotteries being outlawed in Las Vegas. But then Americans have always been ambivalent about the rights and wrongs of gambling. As Wired magazine pointed out: "The Puritans of Massachusetts Bay colony enacted the New World's first laws against gambling. But the same people funded the sailing of the Mayflower by holding lotteries back in England."

The US gambling community is gearing up for a big fight over Senator Kyl's bill. "Back off you fascist bastard," says a "49-year-old professional who happens to love sports" in an online letter to Congress. "Cease and desist. Quit trying to tell me how to live my life and what is or what is not good for me. I love my country; but people like you make me nervous."

Vanessa, from Mississippi, says it would be a "huge blow to freedom" if the bill goes through. A single mother with a handicapped child, she says people like her who can't often get to casinos have a right to gamble from home: "The reason they want to outlaw it is because they can't figure out how to get a piece of the profit. The law in the US is, if you can't tax it, make it illegal."

It is hard to imagine exactly how people could be prevented from placing bets online, says Sue Schneider, editor of the online e-zine Rolling Good Times and chairman of the Interactive Gaming Council. "They would have to subpoena records from [Internet service providers], or do sting operations to catch people. The point is, they must have better things to do with their law-enforcement resources."

Like it or not, Schneider says, online gambling is going to happen - and the sensible thing to do would be to regulate and tax it, rather than push it underground by prohibiting it. Australia, she believes, where the state of Queensland has just passed a law licensing cybercasinos and sports betting operations, has got the right idea.

In Britain, the situation is a lot calmer. The big bookmakers are politely awaiting clarification on legal and tax issues before setting up online services. In theory, there would be nothing to stop them doing it now - the same law that allows them to take bets on the phone would let them do so online. They might, however, run into problems with Customs and Excise about the taxing of bets from abroad.

Ladbrokes predicts that when it happens, online betting will be particularly popular with women, who still find going into the blokeish world of the high-street bookmakers intimidating. Claude Levy says a surprising number of his casino customers are female.

Setting up an online casino on British soil is most definitely illegal: casinos can only be run out of licensed premises and the Gaming Board does not consider Internet sites to be premises. The British Casino Association says it won't push for the liberalisation of these laws until restrictions on their terrestrial casinos have been lifted - casinos still aren't allowed to advertise, even in the Yellow Pages.

The Gaming Board says it won't act, whether to regulate or prohibit online gambling, until it has become a more obvious trend. "As yet, there is no evidence that large numbers of people are playing on offshore sites," says Tom Kavanagh, secretary to the Gaming Board. "We haven't heard horror stories about people losing their house on the Internet. When people lose large sums we nearly always hear about it."

Internet gambling is not exactly high on the Government's legislative agenda. Trying to prosecute individuals, he adds, would not be a "happy" path to go down.

In the end, regulation is far more likely than prohibition, here and even in the US: after all, what right-thinking government is going to turn down the potentially huge revenues from taxing online gambling? Michael Evason, an analyst at Datamonitor, predicts that by 2001, European revenues from online gambling will be as high as $3bn. Other estimates for worldwide revenues go up to $10bn. "The growth of the market will depend on regulation issues being sorted out, but it's going to take off regardless," says Evason.

It is possible, though, that the British already have more than enough opportunities to gamble without needing to do it online. "I'm not saying people won't," says Tony Coles, a lawyer who specialises in gaming. "But compared with the States and other parts of the world, it is already very easy to gamble in the UK.

The British, agrees Dr Mark Griffiths, a psychologist at Nottingham Trent University with an expertise in gambling and Internet addictions, are indeed a nation of gamblers - thanks to the National Lottery, two-thirds of the adult population have become regular gamblers. But, he says, those who say the Internet is the "crack cocaine" of gambling are exaggerating. One report predicted that that within 10 years gambling will be a bigger youth problem than drugs.

But gaming technology will have to get a lot more sophisticated before it becomes compulsive, says Griffiths: "The gambling activities which cause problems are the ones where the speed of reward is very quick, like with fruit machines, roulette and scratchcards. But at the moment the bandwidth problem on the Internet means when you try to play simulated poker it can literally take five minutes before the next card is shown. It's just too slow".

Sue Schneider argues that it's far easier to track and control compulsive gambling, as well as underage gamblers and criminals involved in money laundering, on the Internet - especially if there is regulation. She points to Australia, where compulsive gamblers can be barred from sites at their own request or that of a spouse. Regulation would also mean fewer people getting ripped off, she believes.

The Gaming Board may not yet have heard of any British casualties, but there have been plenty in America. The RGT site has a "vice squad" which will investigate any claims of rigged games or unpaid winnings. The Interactive Gaming Council has also established a voluntary code of conduct which many casinos have adopted. Most realise that they'll make a lot more money by playing straight - when people do get ripped off, word travels fast in gambling newsgroups.

"Our rules are exactly the same as those in Las Vegas or Atlantic City," says Claude Levy, "and the pay-outs are the same, too. The big advantage of playing online is that every transaction is recorded, so that if you put pounds 5 on 34 red and then come back months later and say you actually played 24 black, we can tell you exactly what you did and when. In a real casino, when it's busy at the roulette table, it's much harder to prove."

"Besides, why fly to Las Vegas and have to pay for airfare, accommodation and food? Before you put your leg in the casino you're already down a few thousand dollars."

And does he play? "Oh no, not since I was a young man."

Rolling Good Times

http://wwww.rgtonline.com