| | Gambling Payments
Since 2002, Mr. Eliot Spitzer, the New York attorney general has succeeded in getting more than 10 major financial institutions, including Citibank and PayPal, a large Internet money transfer company, to stop processing gambling transactions. So far he has been unable to prosecute the Web site operators who are offshore, and pressed to arrest online. Instead, he has tried to seal off the financial pipeline connecting these two operations. In the past months, federal prosecutors from around the country have joined the effort of stopping online gambling by threatening to prosecute any businesses in the United States that provides advertising and financial services to illegal Internet casinos. As a result of the pressure, several large media operations have stopped running advertisements for offshore Internet casinos. Gamblers say the attorney general's efforts have made their life a tiny bit more complicated. "It used to take me one mouse click; now it takes two". As an industry, online gambling has an obvious profit potential. While casinos in Vegas spend millions of dollars into their hotels, What Web sites lack in pizazz, they make up in convenience, as clients can play blackjack seconds after rolling out of bed. The New York attorney general decided to target the online gaming industry in 1999 after his office won a precedent-setting case involving an Internet casino.
The Web site's operators, World Interactive Gaming Corporation, claimed they should not be subject to New York gambling laws, since their Internet servers were licensed in Antigua. However, the State Supreme Court ruled that the location is irrelevant since the actual transmission of information using the Internet constituted gambling activity within the state. In the long run, this ruling may influence New York online bettors, said Ken Dreifach, chief of the state attorney general's Internet bureau. On the federal level, online gambling remains uncharted territory. Many legal experts point to the 1961 Wire Act, which makes it a crime to use are for transmitting betting information across state or national boundaries. The wire Act doesn't mention the Internet and is typically viewed as being limited to sports betting. Legislation pending before Congress could amend the Wire Act to include restrictions on Internet betting, said I. Nelson Rose, a law professor at Whittier Law School in California. Historically, gambling regulation is handled by the states, but few besides New York have aggressively confronted its online form, maybe because of enforcement difficulties. Bradley J. Gibbs, a lawyer with Heller Erhman, a law firm that has handled online gambling litigation, said "arresting grandmothers and 12-year-old computer users is a sure public-relations disaster". By reprogramming a couple of lines of software, the code corresponding to these sites was blocked. But the effectiveness of such blocks remains to be seen. "If money is flowing, tunnels dig themselves," Professor Rose said. |
