The Justice Department is widening its net in its crackdown on online gambling, apparently now even targeting U.S. firms that helped overseas gambling sites with their stock offerings.
Meanwhile, the Wall Street Journal reports that as the biggest sports gambling day of the year approaches, it's business as usual. Sort of:
In fact, the government's war against illegal online wagering may be driving gamblers back to where they started: their local bookie.
"The likely impact is that people who previously wagered on legal, regulated sites … will now call a local bookie or bet on an unregulated site," says Alan Feldman, a spokesman for casino giant MGM Mirage.
It's true that many of the publicly traded online-gambling sites have pulled out of the U.S. market since last summer. Some have folded entirely. And the Justice Department served subpoenas to a number of investment banks that allegedly helped underwrite foreign public-stock offerings for some of the companies.
But as the kickoff at Super Bowl XLI in Miami gets nearer, the overall picture of Internet gambling has only gotten muddier. It's not just that local bookies are taking bets over the Internet. For every established Internet-gambling company that has stopped accepting bets from the U.S., others have cropped up to fill the void.
"The online-gambling ban should be renamed the Sopranos Support Bill," says Wayne Allyn Root, an outspoken professional sports handicapper in Las Vegas. "All of this money has moved to brand-new, privately held companies [that] opened overnight and [are] run by criminals engaging in fraud and organized crime."
"The crackdown has taken the online bets out of a fairly transparent set of companies and put them into companies that aren't transparent at all," adds Sue Schneider, president and CEO of River City Group, a St. Charles, Mo., Internet-gambling consultancy. "Players could be more at risk."
Prohibition of a vice has spawned risky, unregulated black markets? You don't say.
In more welcome news on the online gambling front, the European Union is considering a WTO challenge to the Unlawful Internet Gambling Act.