On Sunday, a 28-year-old Hollywood assistant named Seth plans to enjoy the Super Bowl in the same way millions of other football fans will: He’ll bet on it.
How, exactly, will he wager that $100 burning a hole in his pocket? One thing he knows for sure is that he won’t do it legally. Trekking to Vegas for the weekend is out of the question. And he won’t do it using one of the publicly traded online services based abroad that have been taking sports bets from Americans over the past few years. They have mostly stopped taking action from U.S. residents in the wake of an aggressive government crackdown on Internet wagering.
But that doesn’t mean he and other gamblers will be shut out. In fact, the government’s war against illegal online wagering may be driving gamblers back to where they started: their local bookie. And in an ironic twist, there’s a good chance the bookmaker is taking bets over the Internet, too.
“Even my bookie is online these days,” says Seth. He would be logging in to place his bet but misplaced the username and password the bookmaker gave him. “I guess I’ll just have to call him and get him to resend me the instructions, sort of a tech support for the sports bettor,” he says.
The government’s crackdown has, in recent months, targeted executives at offshore Internet-gambling outfits and the foreign credit-card-processing companies that facilitate the transactions with U.S. bettors. But while it may have dented the $12-billion-a-year online-gambling industry, it didn’t break it.
No one thinks that American gamblers’ appetites have waned either. Last year, about $94.5 million was legally wagered on the Super Bowl in Nevada casinos, the only place in the land where it’s lawful to bet on sports. Illegally, the American Gaming Association – a casino-industry trade group – figures that Americans bet between $5 billion and $6 billion each year on football’s marquee event.
“The likely impact is that people who previously wagered on legal, regulated sites… will now call a local bookie or bet on an unregulated site,” says Alan Feldman, a spokesman for casino giant MGM Mirage.
It’s true that many of the publicly traded online-gambling sites have pulled out of the U.S. market since last summer. Some have folded entirely. And the Justice Department served subpoenas to a number of investment banks that allegedly helped underwrite foreign public-stock offerings for some of the companies.
But as the kickoff at Super Bowl XLI in Miami gets nearer, the overall picture of Internet gambling has only gotten muddier. It’s not just that local bookies are taking bets over the Internet. For every established Internet-gambling company that has stopped accepting bets from the U.S., others have cropped up to fill the void.
“The online-gambling ban should be renamed the Sopranos Support Bill,” says Wayne Allyn Root, an outspoken professional sports handicapper in Las Vegas. “All of this money has moved to brand-new, privately held companies [that] opened overnight and [are] run by criminals engaging in fraud and organized crime.”
“The crackdown has taken the online bets out of a fairly transparent set of companies and put them into companies that aren’t transparent at all,” adds Sue Schneider, president and CEO of River City Group, a St. Charles, Mo., Internet-gambling consultancy. “Players could be more at risk.”
To eliminate paper trails and take advantage of technology, some bookmakers have apparently joined forces with offshore-betting sites and now issue their clients account numbers. Bettors log on to the Web sites like ordinary gamblers and enter their account numbers. But instead of sending credit-card data, they simply make their bets, which are linked electronically to their bookie’s name. The bookie keeps track of his clients online but still collects debts and pays winnings the old-fashioned way: in person. He likely pays a cut to the Web-site operators.
Nelson Rose, a law professor and expert in gambling law, has fielded dozens of phone calls from casual gamblers since the U.S. government went on the offensive. The No. 1 question: “Will I get arrested for betting on sports?” His response: “About as likely as the chances of their winning the World Series of Poker.” In other words: not likely.
But even before the government’s sudden interest in chasing down online-gambling companies, some sports bettors found the online experience frustrating. Most online-gambling sites required U.S. bettors to open an online account and deposit a certain sum via credit card. Betting losses would be deducted from the account and wins credited.
Seth once had an account like this, but after a few months of losses, he decided it was too laborious and resumed using his local bookmaker. Months later, he says, he still receives annoying telemarketing calls from the site.
For the Super Bowl, Seth says that if logging onto his bookie’s site is too complicated, he may just skip the bet altogether. “I don’t think I’d work that hard just to lose $100,” he adds.
Source: Sun News

The World Trade Organisation (WTO) has ruled against the US in an online gambling dispute with the Caribbean island of Antigua and Barbuda. The US is breaking international trade rules, it is expected to say.
Though the ruling is still private, Reuters has reported that the WTO has found the US guilty of not complying with a 2005 order in the case.
Antigua and Barbuda has built up a significant internet gambling industry to replace falling tourist revenue and took the US to the WTO over entry to the US gaming market.
Laws passed previously banned non-US companies from operating in the US gaming market. Antigua argued that this was an illegal trade restriction and broke a free trade pact that the US had signed.
A WTO dispute resolution panel found in Antigua’s favour in 2003. The US appealed but the Appeals Board found largely for Antigua in 2005. The WTO has now found that the US has not tried hard enough to stick to that decision.
Antigua had taken a case relating to a ban on all bets placed across state lines. The WTO, though, only ruled in its favour in relation to the narrower issue of horse race betting across state lines. It found that foreign bookmakers seemed to suffer discrimination.
The WTO has provided both sides with a preliminary report on its findings. Both parties can submit further comments to it before a final report is published in March.
A spokesperson for the US Trade Representative told Reuters that the ruling was only a minor issue. “[We] did not agree with the United States that we had taken the necessary steps to comply with that ruling,” she said. “The panel’s findings issued today involve a narrow issue of federal law.”
Since the disputed laws were passed in the US further, more stringent anti-online gambling legislation has been passed. Last autumn, the US passed laws which made almost all internet gambling illegal in the US and several online gambling executives have been held by US authorities.
The US has the opportunity to appeal the latest ruling after it is published in March.
Source: The Register