Abstract
Internet gambling is one of the most attractive internet games today and this game is increasing its popularity day by day. This objective of this paper is to highlight the effects of internet gambling on the society as a whole. This paper is divided into five sections, in the first section introduction is given, then in the second section different companies that are working in the internet gambling industry are discussed and further some types of internet gambling games are briefly explained. In the third section, different laws and regulation that have been implemented on the internet gambling are discussed. In the forth section problems and effects of internet gambling are explained in detail considering the individual, societal and national level, and finally in the last section conclusion is given.
This paper is adopting a secondary research methodology, i.e. all the data collected have been from published articles, magazines, books, journals and newspaper articles.
Introduction
Gambling refers to the game of chance in which the better bets his money or any other personal valuable involving a certain degree of skill. This game is associated as a dangerous game because it indulges rowdy activities and often produces debtors, due to this gambling is prohibited in some countries (n.d. 15864). But even after so much unpopularity, gambling has set its feet on new grounds and now internet gambling has emerged as a new sport. Internet gambling is also known as online gambling where thousands of individual are connected through a computer network that permits these individuals to visit the virtual world. Internet gambling is almost same as normal gambling but in internet gambling the better utilizes the use of technology like computer to play (Doyle, ix).
For internet gambling the better needs not to go to the physical casino but he can connect to the casino sitting at home or any other location. The bettor uses his computer and email to place his bet with the bookie where three-dimensional pictures create a casino atmosphere with vivid color combinations, virtual poker tables, virtual people and dealers, virtual slot machine and sounds that create a perfect gambling situation and environment. The procedure to play online gambling is very easy and handy. They can enjoy because nowadays there are superb software’s developed that provides unlimited fun and easy accessibility. These individuals can play at home by opening an account with any online casino. But nowadays to avoid fraudulent case there is a requirement for all players or betters to open their accounts and deposit a lump of money, generally $500- $1000 (Doyle, x).
Internet gambling has grown so much that various sites are offering internet gambling and within these sites approximately 50- 60 sites are trying harder to join them. Some of the best online or internet gambling sites are goldencasino.com, onlinevegas.com, gocasini.com and rushmorecasino.com. There are certain new features added to the gambling game by the internet gamblers, such as proxy gambling, gambling for credit and claim of gambling in the virtual offshore gambling environment (Doyle, xi).
Even though internet gambling is providing excellent services but still three main obstacles create a hurdle for internet gamblers to become multi- million dollar endeavor. Firstly there are technical improvements, i.e. even the latest technology and systems that are used during the gambling process is still very rough and dry, secondly financial mechanism becomes a hindrance and lastly credibility are those barriers that are causing trouble to internet gambling. Apart from these some sites fail to provide a sound and somewhat similar gambling atmosphere that reflects the real physical gambling world. Internet itself is major threat for the gamblers as a lot of security issues, financial issues and fraudulent cases can arise. Due to this the enforcement of online gambling is a very risky game with a lot of complication so certain legal issues have also emerged in this form of gambling which will be discussed later in the paper (Doyle, xi).
Types of Online Gambling and Online Gambling Games
There are certain forms of online gambling, such as online poker, online casinos, online sports betting, online bingo, mobile gambling and funds transfer. Online poker table have tournament and ring game structure where they offer certain game types like Texas, Omaha, Seven-card Stud, Razz and HORSE. Online casinos are played against the house and hence make money even though if the odds are in its favor. Roulette, black Jack, pachinko, Baccarat and others are those casino games that are played in the online casinos. Online sport betting is often a result of sports events which offers fixed-odds gambling on the internet and indulges betting exchanges and bookmakers. Mobile gambling are a connection tool or a platform through which online gambling is played because mobile devices act as a median to develop wireless system and hence then connectivity. Funds transfer refers to the transferring of funds or money by the gamblers to the online gambling companies generally by credit card, debit card, check, wire transfer and electronic money services. But generally credit cards are not very advisable form of transfer and due to this many online gambling sites generally reject the use of credit card. Online bingo is another type of internet gambling which is also offering variety of games over on the internet.
Some of the common and most favorite online gambling games are the casino games such as Black Jack, Video Poker, Slots and Roulette. Black jack is the oldest casino game, yet very simple and easy to play. The game starts with placing a bet, the better has to choose two cards, the bet is placed against the dealer and when the count reaches 21 the gambler wins. The dealer then hides the other card and decision lies in the hands of the dealer to either take an extra card or proceed with the same one.
Video poker runs on automated system both online and offline. Online are more interesting and it starts when the player creates the hand of five cards and the chances of winning increase if he chooses the best five hands. Slots are played in five and three reels and the game starts with the selection of coins and inserting it in slot machine. If the same figure or picture appears along the pay line the player wins. Roulette is one of the earliest online casino games and this game type includes 37-38 pockets and two types of wheels, i.e. European and American. The game starts with placing the bet on a specific stake number and if the ball rests on the same number the player wins.
Internet Gambling Laws and Acts
The use of Internet gambling advanced day by day and then at a certain level there was a strong need for implementation of certain laws and regulation. According to the research it is estimated that by 2000 approximately 4.5 billion Americans enjoyed online gambling (at least once in their lifetime).The United Kingdom is the most powerful country in the world and hence it is the first country that has allowed the regulations of online gambling and some also state that after a certain period internet gambling will become completely legal in United Kingdom. The main reason behind is to earn revenue through taxation as offshore casinos will be invited and they will regulate their business activities on the UK land thereby raising revenues. Italy, Spain and South Africa followed the pace of the UK and have started introducing regulations that is making internet gambling acceptable in the global market place. But still Germany and France are not very optimistic about making online gambling legal. They seem to prohibit internet gambling by securing and protecting the land-based casino gambling. But the process of online gambling regulations have been started long time back and a lot of variations have been seen in its history where some part of the population standing in favor of internet gambling and some standing as its opponent.
The first and the foremost act was passed in 1994, ‘Free Trade and Processing Zone Act’ which was passed by the government of Antigua- Barbuda. This act was the base of internet gambling as there are several online casino’s that work and operate under this license even today. Till November 2003 as such laws no law had been enacted that would justify it as an illegal activity or restrict or prohibit it. The reason was that the effects of online gambling were not seen by then and neither was it proofed to be illegal because it was treated as a normal game on the internet. But over time, problems of internet gambling emerged, so due to this in 1995, Congress tried to ban all internet gambling and tried to provide evidences to state it as a corruption game that indulges criminal activities but all those legislation proved to be fruitless (Crisco, 3-6).
So in 1998 and 1999, ‘Internet Gambling Prohibition Act’ was introduced by Sen. John Kyl, this legislation was passed in the senate but failed to get approval from the House Judiciary Committee in the 105th Congress. The main feature of this legislation included the penalties for individual bettors. But Congress did not lose its hope and continued to introduce new legislations and so number of state and federal trial and hearing of internet gambling were a success. Most of the hearing pursued under the ‘Wire Wager Act’. The first act was passed in 1961, ‘Interstate Wire Wager Act’ but this act was not passed directly on Internet gambling.
According to this act “anyone who is engaged in the business of betting or wagering knowingly (using) a wire communication facility for the transmission in interstate or information assisting in the placing of bets or wagers on any sporting event or contest…shall be fined under this title or imprisonment”. So according to this act virtual casino gambling was prohibited (Crisco, 3-6).
In 2000, the Australian federal government passed the Interactive Gambling Moratorium Act. According to this act all those Australian online casino and sports book firm where declared illegal who did not license themselves before operating. Due to this only one internet casino, ‘Lasseters Online’ continued its operation. Another attempt to curb internet gambling was made in the US by Rep. Bob Goodlatte (R-Va) by introducing ‘Internet Gambling Prohibition Act’ but this act also failed because it was could not get approved because of the lack of two-third majority votes. But again in 2002 Rep. Bob made another effort and this time his bill focused particularly on internet betting and online casinos. But after the failure of Bob’s effort, Jim leach introduced a new act known as ‘Internet Gambling Enforcement Act” also known as Leach Act this act was did not attempt to prohibit internet gambling itself but it prevented the U.S. citizens to gamble online by limiting their financial access to gambling sites. This act also failed to pass but it is still a proposed bill but its name has been changed to ‘Unlawful Internet Gambling Enforcement Act of 2005’ (Manter, 2-4)
But this act was signed by President Bush on 13 October, 2006. This law also imposed restrictions on banks and other financial service providers and asked them to block all illegal financial transactions. Illegal transactions referred to only these transactions that were related to wagering, so some financial transactions may be illegal according to the UIGEA but not by others (Todd, 1). So due to this, not all accepted this act and they continue to accept bets from U.S. players but they trying to prove their point by giving different perspective and justifications. While some companies were willing to take legal risk and accepted various bets from the U.S players (Walters, n.d).
Individual states have further manipulated the situation as they have passed their online gambling laws. Due to this online gambling legality is becoming a word of concern because its complexity is increasing day by day. So due to this no such law is enforceable in the U.S or any other state regarding its prohibition so instead government decided to legalize and provide license to the online gambling businesses but instead charge taxes on them so revenue could be generated and economic stability could be gained. Recently United Kingdom passed a ‘Remote
Gaming License’ it is a measure that would encourage the online gambling industry. But serious steps are being taken against the violators and they are being arrested and are being charged heavily. Some of these are associated with BetOnSports.com (Walters, n.p). These laws could not have been implemented because of the over-aggressive lobbying, i.e. if one bill was passed in one house of congress it would fail to get accepted in the other and this often caused because there were a set of few officials who had a great level of influence on the other representatives and it has also been stated by various house officials that the chief of Staff reported to the Republican House leaders that if the bill would be passed then they would lose their representative seats. So the main failure of bills was not basically because of bill itself but because of shady lobby attempts (Schmidt & Grimaldi, A01).
Effects and Problems of Internet Gambling
Internet gambling or online gambling is creating both positive and negative effects on the individuals, society, companies and countries as a whole. It has also been reported that only 5 percent of the population faces problems with internet gambling. And it generally takes approximately eight years for a new or recreational gambler to take form of a compulsive gambler. But on the other hand it also proves to be a benefit for countries, as internet gambling is benefitting the United States in three ways. Firstly it is providing a more complete environment than the real world casinos. Secondly the increased competition in the gambling services would benefit consumers as the consumers can allocate the best choice with a maximum benefit considering the large amount of variety to choose from. They would also be benefitted by higher payouts because various companies will increase it to compete with each other and so attract customers. Thirdly it would lead to high revenue because united states is already blessed with a good reputation. After all, gamblers have trust in them because they know there money would be secure and it would be a fair game (Hammer, 15-17).
Online gambling would also lead to the improvement of existing gambling casinos and other companies. They are increasing their service quality and also offering additional services to attract customers. Internet gambling has another advantage as because of effective screening procedures, a scam can easily be caught because there is a very effective public watch group on the internet which keeps a close eye on any unfair practices (Oliver, n.p).
Certain problems are also arising due to this gambling type but still individuals continue to play this game. This game is attracting more customers than any other baseball games or other activities. In the beginning this game may be only a form of leisure activity but the better fail to understand its effects and the reality that many individuals have become trapped in this attractive game. So this internet gambling is not very pleasing and attracting as it seems because in reality it has caused serious problems. The biggest issue that arises for the gambler player is that he may become addicted to this game and then due to this the gambler may take certain actions. Such as, he may become preoccupied with gambling and due to this he would neglect his family life, office life and may even at times lead to selling his possessions. It is also surveyed that a gambler plays this game when he is extremely disappointed or frustrated and this leads to serious problems. It is researched that better may face with difficulties if the size of bet would be increased to a certain level where it would be extremely difficult for better to quit or cut back because this game is an addiction which has caused some people go bankrupt (Kossman, n.p).
It is also causing problems for certain small scale casino companies as now they have to operate and compete on the global level which would ultimately lead them to go out of business. E.g. Indian casinos and Las Vegas are forced to compete on global grounds and this is causing a real threat to their survival. Gambling is creating a form of benefit for the economy but internet gambling is harming families, leading to criminal cases and also leading to addiction. It halts the economy in three ways; firstly it reduces the tax revenue as millions of dollars are paid in taxes annually to local and other general governments.
It has been researched that in 2000, $297 million was paid in taxes and fees by the state and local government (Iowa casinos and other race tracks). Also lotteries have resulted in a crux of revenue shortage from the government treasuries but the situation could have been different if the online lottery proceeds could be reinvested to improve the government projects. E.g. when an individual buys a lottery ticket at any convenience store, the portion of that ticket should be used to improve education and other efforts can be made to improve economy. Internet gambling is benefitting the financial banks and credit card companies because they charge a higher rate of interest on advance cash but at times it can lead these companies in loss when the debtors fails to pay back the money and so these gamblers become bad debts for these institutions (Hammer, 15-17)
Some other societal costs have emerged with the emergence of online gambling as crime rate, bankruptcy and other gambling disorders have risen. Internet gambling has lead to gambling addiction and also gambling by minors. These cause serious societal concerns and costs as physical and mental problems have raised and expenditure of unemployment benefits have also arisen. Theft, bankruptcy, suicidal rate, domestic violence, child abuse have also raised to high levels and this rate has increased. According to the research findings it is stated that number of compulsive buyers are likely to be increased and is expected to quadruple from 5 million to 20 million shortly. This game is more addictive because it involves high speed and instant satisfaction and pleasure. Another major cost of the internet gambling is its accessibility to the minors. There have been issues to curb their access but somehow or the other they indulge in criminal acts to play this game (Hammer, 18-20).
Conclusion
Internet gambling which was inspired from the local gambling is now at a faster and is more profitable than normal land-based gambling. Internet gambling is such a game which has provided the gamblers with easy accessibility, wide range of variety of casinos and higher profitability but it has lead to other serious problems like compulsive buying, addiction of gambling, other societal problems which are causing serious concern of security and integrity. Internet gambling is benefitting the countries as well but it is also affecting adversely because a lot of revenues are being lost because of taxes. Apart from that different rules and regulations have been introduced but they all failed to pass in the house. So due to this U.S permitted and claimed internet gambling as legal but certain laws were regulated and those who failed to follow those rules were dealt strictly.
Works Cited
Aaron Todd, 2006, Congress passes Unlawful Internet Gambling Enforcement Act. Web.
Charles Doyle, 2003, Internet Gambling: Overview of Federal Criminal Laws, pg ix-xi. Web.
Gambling, The Columbia Encyclopedia, sixth edition. Web.
Gregar Manter, 2003, The Pending Determination of the Legality of Internet Gambling In the United States, pg 2-4. Web.
James Oliver, 2001, Internet Gambling; Will History Repeat Itself. Web.
Lawrence G. Walters, Basic Information Regarding Gambling. Web.
Mark Kossman, 2007, Internet Gambling, pg n.d. Web.
Ronnie d. Crisco, Jr, 2003, Follow The Leaders: A Constructive Examination Of Existing Regulatory Tools That Could Be Applied To Internet Gambling, pg 2-6. Web.
Ryan D. Hammer, 2001, Does Internet Gambling Strengthen the U.S. Economy? Don’t Bet On It. Web.
Susan Schmit and James V. Grimaldi, 2005, How a Lobbyist Stacked the Deck. Pg A01. Web.