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Electronic Gambling Report: Introduction

Oct 28, 2000 --In the last three years, the Internet gaming industry has undergone enormous expansion, going from twelve websites at the beginning of 1997 to an estimated 600-700 sites in early 2000. (For the purpose of this report, the term "Internet gaming" describes web-based casino gambling, sports betting, and lottery operations.)

Although the actual amount of current or future gaming conducted via the Internet cannot be measured or predicted easily, experts are confident that upcoming technology improvements and the relative ease of establishing such sites will continue the trend of expansion.

Gaming websites are located in a large number of jurisdictions, including Africa, the Asia/Pacific region, the Caribbean, and Western Europe. In the United States, where gambling regulation has been primarily a state responsibility, there are many proponents of federal legislation that would prohibit the transmission or use of Internet gaming services.

Although continued world expansion of this industry is not hard to predict, the legislative process necessary to establish United States policy remained unfinished in mid-2000, and the effort to establish legal controls is ongoing.

This chapter of the report provides information on several aspects of Internet gaming. The first section evaluates the speed at which Internet gaming is growing and factors involved in the development of the commercial market for Internet gaming and the types of financial activity possible using current systems.

That discussion is followed by a description of gambling websites as they now exist, emphasizing the types of customers that are targeted and how the sites attempt to deal with obstacles such as customers' security concerns, legal issues unique to the United States market, and technical problems.

The next section discusses the various approaches of national and some regional jurisdictions where there is a current or projected market demand for Internet gaming.

The fourth section discusses recent enforcement actions in the United States, focusing on civil and criminal cases that charge Internet-gaming related misconduct and on recent efforts to establish federal legislation that criminalizes Internet gaming.

The final section of the chapter examines the prospects of Internet gaming based on the conditions described in the preceding sections.

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