As PartyGaming's initial public offering rocked the British stock market with its $8.5 billion day-one value, a few new studies indicate that Internet gambling is likely to thrive and prosper, but at a potential price.
The River City Group said in its study that e-gambling right now is a $2 billion a year business with a million players a month. ComScore's Media Metrix, a measurement of American Netizens at home or school or on the job, found more than 29.1 million unique e-gambling visitors in April. And the University of Pennsylvania's Annenberg Public Policy Center showed that 11.4 percent of the weekly college-age card players they polled were likely to play online.
CasinoCity.com determined the most popular Internet poker sites were PartyPoker.com and Pacific Poker, both based in Gibraltar and the former a party of the PartyGaming empire-in-the-making. Behind them were PokerRoom.com and Empire Poker, based in Canada, and Poker World Online Cardroom based in Jamaica.
But among the problems with the picture, according to Wharton legal studies professor Dan Hunter, is that it's the leaders who put up the most impressive numbers while e-gambling is as badly regulated as big business. And the University of Pennsylvania's Knowledge@Wharton team says it remains an open question as to whether laws on the book affect online gambling or whether the U.S. – as it has threatened to do if spotting even one American gambler using PartyGaming – can "realistically" block offshore Internet gambling.
American federal lawmakers are trying to keep online gambling at bay even as poker, for one, is becoming hugely popular on broadcast media, from Celebrity Poker Showdown and Poker Superstars Invitational Tournaments to the World Series of Poker that became somewhat of a surprise hit on ESPN recently.
"We have a strange relationship with gambling," Hunter told Knowledge@Wharton. "Not only do many states rely on it for their revenues – a situation that generates its own weird political economies – but we don't really like the state [watching over] what we do with our free time and money.
"Against this, we have reasons why gambling might be regulated, including moral reasons, social problems, or protection of certain classes who are uniquely unable to deal with the issues that gambling presents," he continued. "So, in the abstract, gambling is a vexed arena."
Not as far as at least some U.S. states are concerned. As of July 1, a new Indiana law makes Internet betting on horse racing a felony offense, which prompted among others Los Angeles-based Television Games Network to tell Indiana customers their accounts were now canceled.
"We think TVG's activities have been lawful under federal and state laws," TVG vice president John Hindman told the Indianapolis Star. "This law is new. We're going to work with legislators to clarify the intent of it and take the appropriate measures."
The new Indiana law, the brainchild of state Sen. David Ford (R-Hartford City), elevated providing Internet gambling sites in Indiana to a felony instead of a misdemeanor, unless they were allowed directly by such state laws as the Indiana state lottery.
On the same day as the Indiana law took effect, the Deloitte auditing company dropped as a client Los Angeles-based WPT, owners of the World Poker Tour, because WPT launched an Internet gambling site for nonU.S. residents.
Outside the United States, however, smaller countries increasingly appear to view Internet gambling with a "if you can't beat 'em, join 'em" philosophy, which lends credence to a prediction made five years ago by Whittier Law School professor I. Nelson Rose.
"It appears that many more governments will be getting into the business of regulating and licensing online gaming," wrote Rose at that time. "[T]hese licensing bodies will continue to be parts of the governments of states, territories and smaller nations, rather than federal governments or the governments of larger nations."
