Debate swirling around Web's 'virtual casinos'
Web Posted: 09/01/2006 12:17 AM CDT
L.A. Lorek
San Antonio Express-News Business Writer
More than 2,000 Internet gambling Web sites allow anyone with an Internet connection to place bets around the clock.
"It's having a virtual casino in everyone's home, whether it's hosted by someone here or someone overseas," said David Robertson, spokesman with the National Coalition Against Legalized Gambling, based in Washington.
That reality hit San Antonio this week, when police raided professional poker player Richard Lee's Shavano Park house Tuesday night.
They referred to his residence as the "nerve center" of a suspected Internet gambling operation, and police confiscated a money-counting machine, five Lexus cars, plasma screen TVs and a large amount of cash.
But Lee, who recently won more than $2.8 million in the 2006 World Series of Poker in Las Vegas, hasn't been charged with a crime, said Sandy Gutierrez, spokeswoman with the San Antonio Police Department.
During a news conference Thursday on his front porch, Lee denied operating an Internet gambling Web site but said he was gambling online on partypoker.com when police arrived Tuesday night.
"It was a small tournament for which you could win a prize, and the prize was money," he said. "If it is (illegal), I wasn't aware of that. Some of my friends told me it was a really good site."
No one was available from partypoker.com to respond Thursday afternoon.
Internet gambling is a lucrative industry that generates an estimated $5 billion in revenue, according to a U.S. Government General Accountability Office report. And it's growing, thanks to more-robust Internet connections in U.S. homes.
Most of the operations have headquarters offshore, but some executives live in the U.S.
David Carruthers, chief executive officer of the British company Betonsports PLC, was arrested in July in Dallas as he changed planes. He's now under house arrest in St. Louis and his company is under indictment. On Thursday, a judge barred Betonsports from doing business in the U.S. for 30 days.
To further crack down on online gambling, the U.S. House on July 11 passed a bill that would expand U.S. laws banning Internet gambling and make it illegal to use credit cards or checks to place bets. The legislation is pending in the Senate.
For years, Congress has considered stronger federal legislation to beef up enforcement against Internet gambling, but lobbying efforts killed the bills, Robertson said.
Laws should lag behind actual Internet activities so as not to have a chilling effect on the marketplace and citizens' rights, said Henry H. Perritt Jr., professor of law and former dean of Chicago-Kent College of Law. He hopes Congress waits for prosecutors to bring cases to trial under existing gambling laws.
"I think it's appropriate to go slow about this," said Perritt who wrote "Law and the Information SuperHighway."
The National Coalition Against Legalized Gambling, however, hopes to see Congress crack down soon.
"I think if we get enough pressure on it we can get it passed," Robertson said. "There is a bunch of Internet gamblers lining up as a poker players and saying we are taking away their freedom."
The coalition contends gambling causes a host of social ills, including gambling addiction, suicide, bankruptcy and increased crime.
Offshore companies are creating more compelling and attractive gambling sites.
One of them, Betonsports, faces a 22-count federal indictment against company founder Gary Kaplan and CEO Carruthers. The company ran its U.S. Internet business from offices in Costa Rica and Antigua.
Carruthers and seven others pleaded not guilty July 31. He was freed on $1 million bond. Kaplan hasn't been taken into custody.
In 2003, the company's Web site, Betonsports.com, had 100,000 active players who placed 33 million wagers worth more than $1.6 billion, according to the indictment.
Not every gambling site should be treated the same, according to the San Francisco-based Poker Players Alliance.
The organization, which says it has 100,000 members nationwide, opposes any effort to ban Internet poker gambling. The alliance released a study in July estimating that more than $3 billion in federal and state revenue could be raised if this country taxed and regulated Internet poker.
"Poker is a skill game," said Michael Bolcerek, the alliance's president. "It's a different game than roulette or lotteries, and we think it should be treated differently."
Lee said he turned down promotional offers from online poker sites during last month's World Series of Poker because he made a promise to promote San Antonio.
During his news conference, Lee was wearing the same red long-sleeved T-shirt with "San Antonio" on the front that he wore during the poker tournament.
"I was proud as hell to be able to wear this T-shirt rather than take some money from people I don't even know," Lee said.
He said he did not consider his activities to be bookmaking.
"For you people in San Antonio who know me, I think you can tell I am a person of integrity," Lee said.
llorek@express-news.net
Staff Writer Brian Chasnoff and Bloomberg contributed to this report.
Web Posted: 09/01/2006 12:17 AM CDT
L.A. Lorek
San Antonio Express-News Business Writer
More than 2,000 Internet gambling Web sites allow anyone with an Internet connection to place bets around the clock.
"It's having a virtual casino in everyone's home, whether it's hosted by someone here or someone overseas," said David Robertson, spokesman with the National Coalition Against Legalized Gambling, based in Washington.
That reality hit San Antonio this week, when police raided professional poker player Richard Lee's Shavano Park house Tuesday night.
They referred to his residence as the "nerve center" of a suspected Internet gambling operation, and police confiscated a money-counting machine, five Lexus cars, plasma screen TVs and a large amount of cash.
But Lee, who recently won more than $2.8 million in the 2006 World Series of Poker in Las Vegas, hasn't been charged with a crime, said Sandy Gutierrez, spokeswoman with the San Antonio Police Department.
During a news conference Thursday on his front porch, Lee denied operating an Internet gambling Web site but said he was gambling online on partypoker.com when police arrived Tuesday night.
"It was a small tournament for which you could win a prize, and the prize was money," he said. "If it is (illegal), I wasn't aware of that. Some of my friends told me it was a really good site."
No one was available from partypoker.com to respond Thursday afternoon.
Internet gambling is a lucrative industry that generates an estimated $5 billion in revenue, according to a U.S. Government General Accountability Office report. And it's growing, thanks to more-robust Internet connections in U.S. homes.
Most of the operations have headquarters offshore, but some executives live in the U.S.
David Carruthers, chief executive officer of the British company Betonsports PLC, was arrested in July in Dallas as he changed planes. He's now under house arrest in St. Louis and his company is under indictment. On Thursday, a judge barred Betonsports from doing business in the U.S. for 30 days.
To further crack down on online gambling, the U.S. House on July 11 passed a bill that would expand U.S. laws banning Internet gambling and make it illegal to use credit cards or checks to place bets. The legislation is pending in the Senate.
For years, Congress has considered stronger federal legislation to beef up enforcement against Internet gambling, but lobbying efforts killed the bills, Robertson said.
Laws should lag behind actual Internet activities so as not to have a chilling effect on the marketplace and citizens' rights, said Henry H. Perritt Jr., professor of law and former dean of Chicago-Kent College of Law. He hopes Congress waits for prosecutors to bring cases to trial under existing gambling laws.
"I think it's appropriate to go slow about this," said Perritt who wrote "Law and the Information SuperHighway."
The National Coalition Against Legalized Gambling, however, hopes to see Congress crack down soon.
"I think if we get enough pressure on it we can get it passed," Robertson said. "There is a bunch of Internet gamblers lining up as a poker players and saying we are taking away their freedom."
The coalition contends gambling causes a host of social ills, including gambling addiction, suicide, bankruptcy and increased crime.
Offshore companies are creating more compelling and attractive gambling sites.
One of them, Betonsports, faces a 22-count federal indictment against company founder Gary Kaplan and CEO Carruthers. The company ran its U.S. Internet business from offices in Costa Rica and Antigua.
Carruthers and seven others pleaded not guilty July 31. He was freed on $1 million bond. Kaplan hasn't been taken into custody.
In 2003, the company's Web site, Betonsports.com, had 100,000 active players who placed 33 million wagers worth more than $1.6 billion, according to the indictment.
Not every gambling site should be treated the same, according to the San Francisco-based Poker Players Alliance.
The organization, which says it has 100,000 members nationwide, opposes any effort to ban Internet poker gambling. The alliance released a study in July estimating that more than $3 billion in federal and state revenue could be raised if this country taxed and regulated Internet poker.
"Poker is a skill game," said Michael Bolcerek, the alliance's president. "It's a different game than roulette or lotteries, and we think it should be treated differently."
Lee said he turned down promotional offers from online poker sites during last month's World Series of Poker because he made a promise to promote San Antonio.
During his news conference, Lee was wearing the same red long-sleeved T-shirt with "San Antonio" on the front that he wore during the poker tournament.
"I was proud as hell to be able to wear this T-shirt rather than take some money from people I don't even know," Lee said.
He said he did not consider his activities to be bookmaking.
"For you people in San Antonio who know me, I think you can tell I am a person of integrity," Lee said.
llorek@express-news.net
Staff Writer Brian Chasnoff and Bloomberg contributed to this report.
