Gambling experts told a congressional panel Thursday that efforts to ban Internet gambling would prove ineffective, and Congress should instead consider regulating the fast-growing industry.
ONLINE CASINOS and sports-wagering facilities create many problems, witnesses told a House of Representatives subcommittee. Barriers to children’s’ participation are weak, most operations are not regulated, and compulsive gamblers can quickly see their habits spiral out of control, they said.
One policeman spent over $100,000 of his department’s money on Internet gambling and now faces fraud charges, said Dr. Valerie Lorenz of the Compulsive Gambling Center..
But efforts to ban Internet gambling outright or bar credit-card companies from handling such transactions would be unworkable due to the borderless nature of the Internet and the wide use of alternate payment systems like PayPal, witnesses told the House financial services oversight and investigations subcommittee..
“I’m always reminded of the old adage, ‘Keep your friends close and your enemies closer,’” said Sebastian Sinclair, vice president of Christansen Capital Advisors. “Sweeping this under the rug will only exacerbate the issue.”.
Internet-based casinos and sports-betting facilities, many operating from offshore bases beyond U.S. jurisdiction, have proliferated over the last few years from an estimated 25 sites in the mid-1990s to approximately 1,400 today, according to Bear Stearns..
Revenues doubled last year to $2.2 billion, according to Christiansen Capital Advisors, and are expected to grow to $6.4 billion by 2003. Most of that money comes from U.S. citizens, Sinclair said..
The gambling industry as a whole took in $61.4 billion in the U.S. last year, according to the same estimate.