The internet gambling industry has exploded. According to an internet gambling Committee of the National Association of Attorneys General, there were less than 25 sites on the web in the mid-1990s. Now there are well over 1,000.
Before the advent of the Internet, a compulsive gambler needed to get in his or her car and drive to a casino. If there were no casinos near them, they might even have to fly to cities such as Las Vegas to gamble. Now they can sit down at their computer and take their chances. Usually the outcome is debt.
While the current policies make most online gambling illegal, many off-shore foreign entities have figured out how to circumvent these laws. It is difficult to form a national policy on gambling, not least of most because our policy makers send mixed messages about gambling.
States have now made gambling a core element to financing schools and other pet projects. Some have nicknamed lotteries a tax for people who are bad at math. Online gambling is a natural extension of the idea, promoted aggressively by these states with lotteries, that this could be the day you win. Studies have shown people overestimate risk where is doesn’t exist, and underestimate it where it does. Examples might be that we fear flying although it’s doubtful you would ever die in a plane crash, but don’t think twice about getting in a car, where the odds are you will eventually be in an accident. 37,261 people died in car accidents in 2008 in the United States alone. In contract, fewer than 900 people world-wide died in plane accidents that year.
Gambling feeds on this human tendency to underestimate real risk. It also feeds on the desperation of those who are just waiting for that one big win. Internet gambling has allowed this obsession to flourish right in our living rooms.
Back in 2001, Congress became alarmed by these trends. They recognized that Internet gambling presented a complex set of legal, financial, technical, and social challenges. Although most forms of gambling are prohibited by the Interstate Wire Act and this creates obstacles for Internet casinos on U.S. soil, it does little to stop virtual casinos outside the reach of U.S. law. Bank secrecy jurisdictions tend to allow these types of operations, but other countries do as well. Many of these jurisdictions earn huge licensing fees from these virtual casinos. The financial incentive to continue to allow online gambling is powerful.
Any person armed with a credit card can gamble online. When you consider how aggressively credit card companies market to college students, it should not be surprising to learn that college students have gotten into the game of Internet gambling.
Here are some startling statistics on youth gambling:
Approximately 7 million youth under 18 gamble; 4-7% of them meet criteria for problem gambling.
5% of Texas college students report betting weekly or more.
Problem gambling among college students is more than double that of the general population, with an estimated 3 percent to 4 percent of college student gamblers developing into problem gamblers.
Because young people tend to take more risks in general, and often believe the bad thing won’t happen to them, gambling can become a serious problem for them. Many of these young people rack up intolerable debt; some commit suicide. Twenty-one-year-old Christian Sellergren, a professional gamer, turned his skills to online gambling. In 2006 he committed suicide after his gambling habit caused him to lose his job – he had over $13,000 in debt at the time. Then there was the suicide-by-cop: a 19-year old college student from New York, who couldn’t cope with a gambling debt of $6,000.00 that he bet on the Super Bowl and the World Series. He purchased a toy gun, he led police on a car chase, when approached he pulled the gun out of his pocket and was killed by the unsuspecting police officer.
Some experts warn that even younger children may take to online gambling. What’s to stop a 14-year-old from stealing his or her parent’s credit card to start gambling online? Casinos would turn this child away. The Internet welcomes him with open arms.
“A dormitory room with one student, one laptop and one or a dozen credit cards can become a virtual casino. And that is true of any room in any building in America or in any country in the world or any place in the world. All you have to do is take your palm wireless out of your pocket and you can engage in gambling anywhere in the world. And how does society benefit from that?” Representative LaFalce, 2001 Congressional hearing on online gambling
Parents should be aware that they can dispute charges to their credit card – even if the child is legal age. Online gambling such as this is done by foreign entities circumventing U.S. prohibition of online gambling (Unlawful Internet Gambling Enforcement Act of 2006). Many credit card companies have stopped allowing their cards to be used in online gambling due to lawsuits where gambling losses were disputed.
Internet gambling may become a bigger problem in the future. The pressure from special interest groups (namely, casinos) is strong, and as the national debt increases, Congress may decide they want to tax winnings in online gambling.
Currently because these operations are illegal in the United States, there is little or no regulation of the virtual casinos. Las Vegas and other gambling hubs are continually under scrutiny and casinos abide by strict laws to stay in business. The odds are still in favor of the casino, but certainly not do the degree they are when it comes to online gambling where virtual casinos can simply turn the odds against you in an instant with no oversight.