Imagine the following situation: You enter a web site, download a necessary program and register with the web site. Several minutes later, you are sitting at a virtual poker table, happily playing Texas Hold ‘Em.
You start playing with real money. You have paid for virtual betting chips by an escrow service. Then, if you have good luck and win, your account will be credited with money.
What’s wrong with this imaginary situation? According to the Department of Justice, it’s not legal.
Thousands of gaming web sites operate offshore, beyond the grasp of American regulation.
Internet casinos have already existed for nearly ten years, and the latest increase in the popularity of poker has spurred their growth. Keith Furlong, deputy director of Interactive Gaming Council, claims that an industry trade organization situated in Canada, Internet casinos will attract around 10 billion dollars this year, with U.S. players ponying up 60 to 65 per cent of that.
A few American states have passed laws banning Internet gambling, however no federal law particularly addresses it. Instead, the federal government relies mostly on the Wire Wager Act in order to prosecute Internet casino operators.
Under this act, people running businesses who accept bets via a “wire communication facility” confront fines and imprisonment. The act was designed to restrain the use of the telephone to accept bets.
Critics of online gambling are quick to observe that the act was prepared in 1961 – long before the Internet. They question whether the law applies to Internet gambling or not. Moreover, they insist Internet gambling is a gray area at best. Nevertheless, the Justice Department is stubborn that online gambling is not legal. And in 2000, it effectively prosecuted American Jay Cohen, part owner of the World Sports Exchange in Antigua.
Since the year 2002, the Justice Department has pressured media companies to pull advertisements for Internet gambling. Clear Channel, the country’s biggest radio company, ceased airing adverts for Internet casinos that year, and other conventional media companies have followed suit.
Other organizations that have already been under the pressure of the Justice Department are banks. A lot of them refuse credit-card transactions from Internet casinos. Bank One, which h merged lately with JPMorgan Chase, belongs to this group.
‘[That’s] due to the great probability of fraud,” explained Mary Jane Rogers of Bank One. “Bank One may limit transactions which appear to be online gambling.” She also says that the bank can not always tell that a charge is from a casino.
Some other methods of payment are also becoming scarce. PayPal ceased processing payments for gaming in 2002. That left only a few lesser-known escrow agents cooperating with the casinos.