While Internet gambling is illegal in the United States, government officials estimate is a multi-billion dollar industry, yet one where players have no way of knowing if they will get paid off when they win.
“There is also no way to know if it is an adult or a teenager who is playing,” said local Assemblyman Anthony Impreveduto (D-32nd Dist.), whose proposed legislation to license Internet gambling in New Jersey has attracted the attention of the gambling industry in and out of the United States.
If approved, the legislation, co-sponsored by Neil M. Cohen (R-20th Dist.), would make New Jersey the only state in the country to create licensing requirements and restrict access for children to web-based gambling.
The bill would grant an online license to any already-licensed Atlantic City casino to operate on the Internet. This would require operators of virtual casinos, the software and other functions to be located in Atlantic City, and operation would be subject to the same rules and regulations outlined in the 1977 Casino Control Act.
These “virtual casinos” would only be permitted to offer the same games that are available at the Atlantic City casino, and would not include sports gambling, something that is currently offered on the off-shore Internet sites. The New Jersey license would be renewable every year.
“Internet gambling is the Wild, Wild West of the new Millennium,” Impreveduto said. “There is no regulation, no monitoring and no accountability. New Jersey will win back the West by putting an end to unrestricted access to children and unscrupulous off-shore companies that take advantage of the consumer.”
During a telephone interview last month, Impreveduto said there were an estimated 400 Internet gambling sites, many of which operated out Costra Rica, Australia, the Caribbean islands and other locations beyond the legal jurisdiction of the New Jersey or the U.S. government.
“The way it is now, when you gamble on the Internet, you have know way of knowing who is cheating,” Impreveduto said. “By licensing Internet gambling in New Jersey, you know that if someone cheats, they will lose their land and their license, and their right to operate a casino in New Jersey.”
Cohen, in a press release issued in late January, said the Internet gambling industry is a multi-billion business that continues to grow even bigger.
Could exceed $3 billion
In an article published by Secaucus-based MSNBC, the news organization stated that online gambling revenues worldwide could exceed $3 billion by the beginning of 2002.
In 1998, Cohen said, estimates showed about 90 online gambling sites. As of the beginning of this year, the number has risen to 250, all operating from outside the United States. This does not include sports booking, lottery or bingo games, which could bring that number over 400.
“New Jersey already controls Atlantic City casinos with strict rules concerning underage gambling and consumer protection,” Cohen said. “Every Atlantic City casino that operated a virtual casino would have to follow the same rules in this new online venue.”
Working out the glitches
This measure allows for an account to be established for each online gambler if the consumer passes an online security check. Entering the site would prevent those under 21 from gaining access, and anyone residing outside the state of New Jersey.
Impreveduto said he hoped that modern technology could offer even greater security in this area, and envisioned a time in the not-too-distant future when a thumbprint mouse might be used to prevent access.
“Only the person who is register can have access by mouse,” Impreveduto said.
Yet even with existing technology, regulators can monitor the Internet gambling to make certain people are not being cheated. “It is amazing what you can do,” he said. “You can keep track of every hand of cards and every roll of dice.”
Impreveduto said that while one focus of the proposed law would be to keep kids from gambling, the law would also protect adults, since no one really knows if these Internet gambling sites are cheating or if they will pay off if the consumer wins.
“What you do is you give them a credit card and authorize a certain amount,” Impreveduto said. “You play until you use up that. But there is no guarantee when you win, the online service will pay you. That would change under this law. If you select a site that is licensed by the state of New Jersey, you’ll be able to collect your winnings or have somewhere to go to complain.”
The web-based casinos would operate from the floors of the land-based casinos and would give the state a cut in the revenues. Last year, an attempt to regulate Internet gambling got stalled on the federal level when congress failed to act on pending legislation.
According to the U.S. Justice Department, Internet gambling may be illegal under a 1961 act of Congress, and New Jersey’s Internet law if enacted, would require federal legislation to allow New Jersey to permit gambling.
The New Jersey legislation, proposed on Jan. 23, would subject Atlantic City virtual casinos to the same taxes and regulations the hotels face now, and these would be regulated by the Casino Control Commission and the Division of Gaming Enforcement. Each casino would have to comply with various provisions:
• They would have to provide a process to setup a credit, debit and wager account.
• They would have to keep out anyone under 21 years of age.
• They would be required to have software that established a voluntary loss limit and suspension of operation to prevent compulsive gambling habits.
• They would have to pay an initial annual fee of at least $200,000 for a virtual casino permit, and a renewal fee of $100,000 would be allocated to programs to prevent compulsive gambling.
They would be subject to the provision of the Casino Control Act.
The measure would also give the CCC the authority to set up regulations for virtual casinos, and protect the integrity of the games played.
“Licensing Atlantic City casinos to operate online gives the state and consumers more accountability,” Impreveduto said. “The new virtual casinos will no longer be off-shore and operated in shadows.”