“Record Profits for Online Gambling Firms Have Potential Social Cost”

For anyone requiring an accurate picture of the record growth currently sweeping the online poker industry, a recent study commissioned by River City Group has the answers. According to the research firm, online poker attracts over one million players per month. The survey which took into account a variety of different locations – from work to the home to college campuses – found that over 29.1 million people frequented an online gambling site out of a total number of 165 internet users.

An additional survey by the Annenberg Public Policy Center of the University of Pennsylvania provided supporting information on rising gambling trends. Notably card playing for money grew considerably between people aged 14-22. 11.4 percent of respondents from this age group admitted to playing for money more than once a week. Undoubtedly the figures that proved most concerning are that 43.2 percent of these players are under the legal gambling age of 18 years, and that 11.4 percent participated in online gambling activity.

Issues of legalization vary widely across the Atlantic. The United Kingdom’s decision to legalize online gambling was based on its recognition of the need to impose regulations upon the industry and to provide protection for underage players. In contrast, the United States’ government has deemed online gambling illegal with the prosecution of gambling site operators resulting in severe financial penalties. Individuals as a rule are usually ignored when law enforcement seeks to implement anti-gambling legislation.

These issues raise some tricky questions for the U.S. government. Applying national legislation to overseas companies and enforcing it creates a multitude of thorny issues, including whether or not internet gambling is actually illegal under current anti-gambling legislation. The bulk of revenue captured by online poker companies comes from the United States, but all of the major players in the industry are based off-shore, including the most popular poker sites: PacificPoker and PartyPoker located in Gibraltar, Canadian-based Poker Room and Empire Poker, and Jamaican Poker World Online Cardroom.

With the sharp increase in profits generated by the online poker industry, new attention is being paid to the negative social costs associated with gambling. Daniel Romer, research director of Annenberg’s Adolescent Risk Communications Institute, states that while live casinos are physically off limits to under age players, online gambling means that anyone with a computer can play. “There’s a lot of concern about whether this is legal, especially when it’s a form of gambling that’s accessible to adolescents,” he says.

Wharton legal professor Dan Hunter supports Romer’s views, even if internet companies do try and screen for under-age players. “It’s a big business,” says Hunter, “…widely distributed and badly regulated.”

Keith Whyte of the National Council on Problem Gambling also highlights his organization’s concerns. The greatest danger concerning online gambling is the risk it presents to young people and the new generation of problem gamblers the online poker boom has the potential to breed. Whyte states that legislation and the willingness and means to enforce it are two different subjects. “You can say online gambling is illegal, but if you can’t enforce the law it doesn’t matter,” he says.