By the time the coin is flipped for Sunday’s Super Bowl XLI between the Chicago Bears and Indianapolis Colts, the game’s first record will have already been broken.
In Las Vegas.
It’s estimated that fans in Nevada casinos will wager more than $100 million, shattering the old mark of $94.5 million for the biggest betting day in football.
But if you place your bet online, there’s no guarantee you’ll ever collect.
Gambling experts estimate total wagering on this Super Bowl could top $6 billion — mostly in cyberspace and almost all illegal.
A federal crackdown on financial companies and Web sites that process online bets has cut people off from their money, causing consternation among both bettors and overseas investors.
Still, it hasn’t been enough to stop people from placing bets online.
“This genie is way too big to put back in the bottle,” said national radio host Tom Trushel, the nation’s top-ranked football handicapper and CEO of the betting information site sportsmemo.com. “People love to gamble and they like the convenience of point and click.”
Since the Unlawful Internet Gambling Enforcement Act became law last October, the federal government has made a show of shutting down related companies. Because the United States has no direct authority outside its boundaries, the act targets money-moving mechanisms needed to make bets, such as credit cards and wagering accounts.
Inserted into an unrelated homeland security bill, the act was pushed by then-Senate Majority Leader Bill Frist (R-Tenn.). Although the new law gave companies 270 days to comply, authorities used other regulations to make arrests and reinforce an anti-gambling campaign.
“Internet gambling is a multi-billion dollar industry,” FBI assistant director Mark Mershon said in an official statement last month. “A significant portion of that is the illegal handling of Americans’ bets with offshore gaming companies, which amounts to a colossal criminal enterprise masquerading as legitimate business. … The FBI is adamant about shutting off the flow of illegal cash.”
Two weeks ago, two Canadian directors of British-based NETeller were arrested in Malibu and the U.S. Virgin Islands on money-laundering charges. NETeller, which processed payments for an estimated 2,500 offshore gambling operators, promptly pulled all its U.S. business. NETeller turned an annual $750 million profit while processing more than $7.3 billion a year for gambling Web sites, authorities said.
The Justice Department then issued subpoenas to 16 Wall Street investment banks that had underwritten initial public offerings for popular online gambling sites. Their demands include e-mails, telephone records and other documents so the government can build cases against those who profited from online gaming in the United States.
Earlier, authorities arrested top executives of online gambling giants BetonSports.com and Sportingbet, two publicly traded companies that saw their shares crash on the London Stock Exchange.
“It’s an interesting and somewhat arrogant strategy for the U.S. to be taking,” noted William Eadington, the director of the Institute for the Study of Gambling and Commercial Gaming at the University of Nevada. “But I have a strong suspicion people will find a way around it.”
The fear factor worked. Curacao-based giant Pinnacle Sports cut off its U.S. customers. Several other companies followed suit.
“Public companies have pretty much went out of business (in the United States),” said world champion handicapper R.J. Bell, the co-founder of Pregame.com, one of the first sports betting information sites. “It thinned the playing field.”
But the new law didn’t clarify the illegality for the average bettor, Bell said. Those bettors are his customers. Some 50,000 visitors a day consult Bell’s Web site, which distills statistics into “information worth betting.”
“All it did was set everything back five years,” Bell added. “If people were motivated enough to bet with their local bartender, they’ll find a way to get money offshore into their account.”
Trushel and Bell witnessed firsthand how the Internet changed the gambling world. Information — the most valuable commodity in sports betting — became widely and almost instantaneously available to everyone.
“When I first started in 1993, I didn’t even have a computer,” recalled Trushel, who launched his first Web site in 1996. “I had a fax machine and a network of friends who sent me newspaper articles from around the nation. I thought I was cutting-edge.
“A few people started using computers to collect information and they were bringing down the house. By 1999, the Internet just exploded. Now, information is everywhere, but its shelf life is extremely limited. You have about 12 minutes before your inside tip is out around the world.”
Said Bell, “The Internet changed gambling on two levels. It allowed some guy sitting at home in the Midwest to play 10 different sports books and get the best line. Competition brought down prices across the board.”
Initially, the Internet allowed those at-home bettors to become instant wise guys. But that edge quickly vanished as more people went online.
“Information now moves at the speed of light,” Bell added. “You’re only a wise guy if you’re smarter than the masses.”
Nevada casinos — the only legal place for Super Bowl and most other sports wagers — saw a spike in business as large bettors brought back their business. In November, the sports books saw a 336 percent increase in football betting compared to the same month in 2005. Wagering on sports parlay cards jumped 229 percent, according to gaming reports.
Nevada sports books had not been too concerned by the Internet competition.
“If we did lose people to the Internet, we gained a lot more with the growth of Las Vegas,” said Micah Roberts, the sports and race book director for Station Casinos’ 10 properties. “This city has almost doubled in size in the last 10 years. That’s a lot of new customers.”
Some experts speculate the current crackdown on Internet wagering could bring back neighborhood bookies, who were virtually put out of business by offshore online companies.
“That’s going to take some time, if at all,” Eadington said. “The Internet created a quasi-legal environment that people trusted. These were companies that had reputations. (Customers) were much more likely to be paid for big hits. With illegal bookmaking, that’s always a question.”
Poker — which bloomed online and attracts as many as 70 million American players — has taken a major hit. Partypoker.com, the best-known online site, pulled out of the U.S. market.
“Partypoker was the market leader with 55 percent of the action and they just disappeared,” Bell said. “In addition, poker had reached its saturation point. TV ratings (for poker shows) have slipped back to where they were two, three years go.”
As super-size as Sunday’s betting totals sound, those amounts actually represent a small slice of the gambling pie. Americans spend an estimated $80 billion a year on all forms of gambling.
“The fact is Americans gamble, they gamble a lot and they bet on all sports,” Trushel said. “It’s part of our culture’s fabric and history. We’re in a transitional phase right now, but it won’t stop people from betting. We were here before the Internet and we’ll still be here after it’s gone.”
Source: Sacramento Bee