Americans bet 4 billion dollars online despite ban
(PhysOrg.com)
The American Gaming Association said its analysis supports the need for a congressional study of ways to regulate online gambling for US residents in a way that will help support US jobs and tax revenues.
The report authored by Washington attorney David Stewart found that online gambling by US residents is growing at a rate of 20 percent per year, despite the contention by the US Department of Justice and several state governments that it is illegal.
Because of the threat of prosecution against betting website operators, nearly all the money spent on Internet gambling went to offshore sites, the report said, noting that several countries, including Britain, are in the process of licensing and regulating Internet gambling operators.
Stewart added that the US prohibition still allows a high volume of Internet gambling while imposing no regulatory policies to protect gamblers.
"By driving all Internet gambling business to foreign entities, the current regime also ensures that no jobs are created for American workers, no returns are earned by American companies, and no tax revenues are paid to American governments," he said.
Stewart called for a one-year congressional study commission that could evaluate how to best protect children and problem gamblers and whether Internet gambling can be effectively legalized and regulated in the United States.
The report said 2,500 sites on the Internet offer various types of betting on sports or casino games. Globally, these generated somewhere between seven and 10 billion dollars in 2004, the group estimated.
It said 85 jurisdictions around the world regulate online gambling, but that most sites are clustered in a few locations. Antigua had 536 in 2005, the highest total, followed by Costa Rica with 474.
Third on the list was the Kahnawake Mohawk nation of Canada (401), followed by Curacao (343) and Gibraltar (111).
The report said the implementation by Britain of a 2005 law regulating online gambling may shift more sites to British territory.
In the United States, authorities have blocked credit cards, banks and the online service PayPal from offshore betting. But Americans still manage to place bets through other online payment services.
"Many US bettors make payments to offshore gambling sites through e-wallets such as NETeller, FirePay, or Citadel," the report said.
"The gambler directs money to the e-wallet, which is based in the Channel Islands or some other offshore jurisdiction, and the e-wallet makes the payment to the online gambling business.
"This medium could be restricted if US banks were barred from doing business with such e-wallets, even though the e-wallets may be used for transactions with non-gambling businesses."
