FTC Concerned about Underage Online Gambling

As part of its 2003 budget plan, the U.S. Federal Trade Commission requested funds from Congress to study the availability of Internet gambling to minors. The agency plans to launch a consumer education campaign in conjunction with industry representatives.

Timothy J. Muris, chairman of the FTC, testified before an appropriations subcommittee April 10 to outline the agency's budget proposals.

In his statement, Muris said the FTC is responding to an appropriations bill from last year that asked it to study the availability of gambling Web sites to children. He said the initial results of the FTC's look at online gambling and underage players showed there was too much access.

"The FTC staff conducted a 'surf' of online gambling sites, which revealed that minors easily can access online gambling and frequently are exposed to advertisements for online gambling on general use, non-gambling Web sites," Muris testified.

Muris' statement was made to the Committee on Appropriations Subcommittee on Commerce, Justice, State, the Judiciary and Related Agencies.

Former New Jersey regulator Frank Catania, a consultant for the Interactive Gaming Council, said representatives from the ICG have met with FTC staff to hammer out a plan for voluntary corrective action on the part of the I-gaming industry. The meetings took place around Feb. 1

"Their objections were legitimate objections and concerns that any responsible Internet gaming company would have to be concerned about," Catania said. "People are going to have to follow the lead of companies like Sun (International) who have taken those measures to comply with regulators in the U.S."

Muris told the appropriations subcommittee that the I-gaming representatives told the FTC that they will create an industry-wide best-practices guide "regarding clear and conspicuous disclosures of warnings about underage gambling prohibitions, effective blocking methods and restricted placement of industry advertisements."

Catania, who attended the meetings, said the FTC's investigation into online gaming sites found that many of them had no warnings about underage gambling. Of the sites that asked for a player's age, some allowed players to change their date of birth when told they were too young to gamble. He said the FTC also has concerns about advertising for online gambling sites showing up on sites aimed at children.

"They wanted to see some action taken, and if we were the most responsible Internet gaming trade organization, they got the feeling that maybe we could put our influence out there before they start taking action on some sites that are not complying," Catania said.

To read FTC Chairman Timothy Muris' congressional testimony, click here.