citizens can play only for fun. But Playboy.com will also link to offshore gambling sites that play for real money. With such upstanding media corporations dipping their toes into the pool of online gaming, some in the Internet industry are betting that the day when a "legitimate" online casino opens in the United States is not far behind.
The potential action is too compelling for even the largest tech tycoons to resist. One of Microsoft (MSFT)'s less-publicized adventures is Ninemsn, an Australia-based Internet service to which Bill Gates has pledged tens of millions of dollars. His equal partner is Australian tycoon Kerry Packer of the Crown Casino in Victoria. Packer is a man with a voracious gambling appetite.
That partnership leads many observers to believe that an online casino - using Microsoft platforms, of course - is in the works. A Ninemsn spokesperson says that the site does not now offer online gambling and would not comment on future plans. Tony Cabot, an attorney specializing in gaming issues, says flatly, "When you see Kerry Packer get together with Microsoft, you have to believe there is a future for this type of wagering."
You might think that the prospect of competing against the likes of Microsoft would terrify a $20 million company like Inland. But they say the more bettors, the better. Says Opel, "Bringing in the big names and established companies only adds credibility and visibility to what we're already doing."
A few hurdles have to be cleared before such ventures can take off - beginning with the federal government. The Justice Department doesn't think that online casinos (including those that offer gambling on sports events) can legally conduct business in the United States, even if they are based in places where gambling is legal. In a highly publicized March 1998 "raid," Mary Jo White, the U.S. attorney for the Southern District of New York, indicted 14 managers of six Internet companies for offering gambling on their sites. The defendants, many of whom live abroad, were threatened with up to five years in prison and $250,000 fines.
More than a year later, however, no cases have come to trial, and nine defendants have accepted plea bargains for state misdemeanor charges with no jail time. That may suggest that, as some legal observers have argued, the 1961 federal Wire Act is too old and too loosely written to prohibit online gambling. In 1998, the Senate passed, by a large margin, an amendment prohibiting Internet gambling, but that bill died before becoming law.
But the growing acceptance of online betting and the Internet's inherent ability to shatter jurisdictions bring the inconsistencies of American gaming law to a boil. Why should it be legal to bet online on a horse race in another state, but not legal to bet on a basketball game in one's own state? If Native American tribes can establish new, legal, physical places where adults can gamble, why shouldn't someone be able to do the same in cyberspace?
Gambling is as at least as old as Christianity (that is, if Ben Hur can be trusted). About 2,000 years later, Bugsy Siegel took the concept a step further and built the Flamingo Hotel in the desert town of Las Vegas. For decades, Vegas was about the only legal option for gamblers. In the '70s, Atlantic City legalized casino gambling; in the ensuing decades, state lotteries, Indian casinos, gaming ships, offtrack betting parlors and card clubs have sprouted across the landscape.
Today, Americans spend some $600 billion a year on legal gambling, making it by far the favored national pastime. As Timothy L. O'Brien observes in Bad Bet, his comprehensive account of America's gambling industry, "Judging by dollars spent, gambling is now more popular in America than baseball, the movies and Disneyland combined."
The amount spent on Internet gambling is harder to calculate. Estimates range from $650 million to $1 billion a year, worldwide - a tiny fraction
