Gambler's Web

Why online betting can't be stopped--and why Washington shouldn't bother trying.

Nick Gillespie, James Ledbetter & Tom W. Bell from the October 1999 issue

(Page 5 of 5)

In late July, however, a New York judge issued a decision asserting that the state's prohibition against casino gambling applies to such transactions, regardless of where the server is located. If that reasoning holds--and it's unclear what the results of any appeals will be--much of this sector of the online gaming industry will suffer.

For the individual gambler, these sites raise reliability questions: How do you know that the game you're playing isn't rigged? Most of the sites claim to have an audited guarantee that their methodology is solid, but the simple truth is that you're at their mercy. One commentator recently compared gambling with an online casino to playing poker with someone over the phone: He tells you he's got a straight, and when you ask for proof, he sends you a printout. Similarly, there's a real problem knowing whether or not you're going to receive winnings--a major barrier to Web gambling's commercial viability.

Over the course of several months, I gambled on about a dozen of these sites. Though skeptical about relying on markets alone for consumer protection--and well aware that there are scamsters out there--I became convinced over time that Internet casinos are regulating themselves pretty well, at least for the time being. The sites are not cheap to run, and given the formidable competition, they must rely on repeat business. Any site that leaves its users with feelings of unreliability is not going to get customers to come back. In the long run, though, these sites are going to be either banned or regulated, most likely by state governments--much as real-world casinos already are.