Case Study Iv: Internet GamblingEssay Preview: Case Study Iv: Internet GamblingReport this essayRunning head: CASE STUDY IV: INTERNET GAMBLINGCASE STUDY IV:Internet GamblingMay 6, 2006This document will inform you about the history of internet gambling, the existing issues, and a number of concerns involved with online gambling. Prior to the launching of the World Wide Web in 1993 which changed the setting of gambling, people had to travel great distances to gamble. The worlds first virtual online casino, Internet Casinos, Inc. (ICI) commenced operation on August 18, 1995 with 18 different casino games. Most of these online gambling companies are located outside of the U.S. to avoid government prosecution. ICI operates out of the Turks and Caicos Islands (Kish, 1999). One of the main reasons internet gambling started was because of costs. The value to start up an internet gambling site is around 1.5 million dollars, which is half of what it costs to actually construct a casino. ICI estimates that the company averages about a twenty four percent profit margin, versus the typical United States casino, which ranges from eight percent to sixteen percent of each dollar wagered (Kish, 1999). An estimated twenty million people are currently online with a projected 160 million online by the year 2020. The overall market for online gambling is estimated to be approximately $49 billion worldwide (Kish, 1999). The history of internet gambling is only a decade old, however, its history will hold on for several more.
There are several existing issues facing internet gambling. The first issues we will discuss are how to regulate internet gambling. The question raised by the emergence of Internet gambling is whether old laws–based mainly on a world of atoms–are still viable, and if not, in which way the Internet should be regulated (Walther, 2000). Some scholars believe that internet gambling needs to be regulated, and of course there are those that say let the owners of the sites regulate themselves. Regulatory procedures can be targeted at either or both of the providers and the consumers of gambling services. In the case of consumers, regulation is usually implemented by age, through prohibition of the participation of minors. Procedures might also be contrived to prohibit problem gamblers or undischarged bankrupts from engaging in gambling (Clarke, 2000).
Another existing problem with internet gambling is The Wire Act which was intended to assist the states, territories and possessions of the United States, as well as the District of Columbia, in enforcing their respective laws on gambling and bookmaking and to suppress organized gambling activities. Subsection (a) of the Wire Act, a criminal provision, provides:
“Whoever being engaged in the business of betting or wagering knowingly uses a wire communication facility for the transmission in interstate or foreign commerce of bets or wagers or information assisting in the placing of bets or wagers on any sporting event or contest, or for the transmission of a wire communication which entitles the recipient to receive money or credit as a result of bets or wagers, or for information assisting in the placing of bets or wagers, shall be fined under this title or imprisoned not more than two years, or both” (Rodefer, 2003).
During the House of Representatives debate on the bill, Congressman Emanuel Celler, Chairman of the House Judiciary Committee stated “[t]his bill only gets after the bookmaker, the gambler who makes it his business to take bets or to lay off bets. . . It does not go after the causal gambler who bets $2 on a race (Rodefer, 2003). What the government is having a problem with is that most internet gambling sites are run ran in foreign countries, and they cannot enforce this act against them. What they are trying to do is change the act to include these third parties. An example of this is the introduction of the Internet Gambling Prohibition Act of 1997 (Walther, 2000). The bill would have prohibited Internet gambling by extending the Wire Acts prohibitions on traditional forms of gambling by phone or wire to the Internet (Walther, 2000). This amendment would provide penalties for online bets and wagers. This so far seems to be the best solution, however ethical and moral dilemmas still rest in the hands of our lawmakers today.
The next issue facing internet gambling is taxes. This seems to be the governments biggest issue. This is because of the billions of dollars we mentioned for profit by these online sites, government can gain significant amount of money from it. The legalization of Internet gambling may cause states to lose some revenue generated from legalized gambling operations because many gamblers would spend their money online (Lassani, 1998). Moreover, states lose revenue by not being able to tax gamblers who win over the Internet. Gamblers who win over the Internet have an incentive not to pay taxes on their winnings because the Internal Revenue Service (IRS) lacks the resources to track online gamblers (Lassani, 1998).
The likelihood of addiction to Internet gambling among both children and adults is an extremely important concern. In relation to addiction, children are more likely to become addicted to something new than adults (Smith, 2004). For example, the video game-like nature of virtual casinos, labeled the “crack cocaine of gambling,” could make online gambling a temptation difficult to resist. Furthermore, the fact that the Internet gambler need not leave the comfort and privacy of his or her home could mean that an individual might become easily addicted. This is the worst thing about internet gambling, because there will not be anyone to detect if a person is addicted or not. Consequently the only aid they will get is their selves,
The prevalence of Internet gambling by states is particularly important, as the US has been a party to the Federal data collection program for gambling. In 2009, the Congressional Research Service in a report from the US Customs & Border Protection released a report detailing the prevalence of online gambling.
In 2009, a survey (PDF at the link) from the FBI reported that 21 percent of respondents said they participated in gambling online, a figure that included almost 1.5 million people. The data from this survey were a small fraction of the vast sum of the online gambling population in 2013 and 2014, and would therefore have to be considered a significant factor to explain the current problems.
In a recent email to a reader, the FBI states that they can’t estimate the proportion of people who will be gambling online, but they do know that most of them will have no problem going online.
The prevalence of online gambling for the first time was found in 2012, and according to the FBI, only 1 in 6 of those who have done it over the last 48 hours, can be traced back to their Internet gambling habits. The most common reason for Internet gambling is on the part of those who use gambling sites, who are already experiencing withdrawals, and in people who choose sites that will accept these sites.
That’s why the CDC has been actively working (and encouraging) to improve ways to stop Internet gambling, so people who enjoy gaming can begin using a gambling site that lets them pay their fair share on casino games or other types of gambling for themselves or others.
In 2008, there was a decline in the prevalence of online gambling in the US, with 1 in 5 people at least 25 years old reporting being online. By 2015, the decline in the proportion of people aged 15 to 24 was also falling by 1 in 2. As a result of this decline, the number of folks who online at least 25 years old was down by 3 in 17, while the number of people who reported using a gambling site decreased by 15%.
The FBI currently uses the Internet to collect data on the frequency of Internet-related crimes or the rate of crimes committed. It is not a crime offense to bet with guns, and a person with guns will most likely bet online. That’s why criminals know they are using the Internet to commit crimes and that the data will often improve if they do so.
In 2010, while the Internet gambling population was growing at a slower clip than other areas of the adult population, those at the top of the web are now much more likely than those on the bottom to use the Web to gamble, according to a CDC report (PDF) in which the median US Internet gambler uses less than 3.5 hours at a time online a year.
Although the Internet is currently at war with the private sector, it is already