Encyclopedia of Computer Science and Technology

346 online gamblingand agencies such as the FBI will pursue perpetrators. Everystate also has an office of consumer protection or consumeraffairs, and local district attorneys may become involvedwhen perpetrators are operating in their area or victimizingresidents.Private agencies also play an important role. Besides theBetter Business Bureau, most industries or professions havesome form of certification of products or practices. Thereare also professional services that will authenticate collectiblessuch as stamps, coins, and sports cards.Government and private agencies also offer a variety ofconsumer education materials that explain common fraudsand suggest ways to shop prudently for goods or services.Further ReadingFederal Bureau of Investigation. “Internet Fraud.” Available online.URL: http://www.fbi.gov/majcases/fraud/internetschemes.htm.Accessed October 6, 2007.Henderson, Harry. Internet Predators (Library in a Book) New York:Facts On File, 2005.Internet Crime Complaint Center. Available online. URL: http://www.ic3.gov/. Accessed October 6, 2007.Securities and Exchange Commission. “Internet Fraud: How toAvoid Internet Investment Scams.” Available online. URL:http://www.sec.gov./investor/pubs/cyberfraud.htm. AccessedFebruary 7, 2008.Silver Lake Editors. Phishing, Spoofing, ID Theft, Nigerian AdvanceSchemes, Investment Frauds, False Sweethearts: How to Recognizeand Avoid Internet Era Rip-offs. Aberdeen, Wash.: SilverLake Publishing, 2006.online gamblingDespite its illegality in the United States, Internet-basedgambling has been very popular—by 2004 more than 20million Americans had tried some form of online gambling,and in 2005 they bet about $5.9 billion.Online casinos appeared in 1995, but at first they couldonly be played “for fun,” with no actual money changinghands. That soon changed: In 1996, InterCasino appeared—it would be the first of hundreds of online casinos, sportsbookmakers, and other types of gambling. Generally theseoperations are based outside of the United States—Caribbeanislands such as Antigua and Curaçao are popular locations.Online casinos offer traditional table games such asblackjack, roulette, and craps. Generally odds and payoffsare comparable to those at traditional casinos. Assumingthe game is honest and properly programmed, the house’srevenue comes from a percentage of the amount bet—blackjackhaving the lowest house percentage and roulette thegreatest. Slot machines (which give an even higher percentageto the house) can also be simulated online.Although occasional cases of software programmed tocheat have been documented, a more common problem isfailure to pay winnings promptly, or at all. Recourse is difficult,since the casino is offshore and the activity is illegalfor U.S. players. Players can, however, consult lists of socalledrogue casinos to be avoided. Some players cheat aswell, typically by opening multiple accounts in order to getthe “signing bonus.”Online PokerOnline poker has become very popular, particularly gamessuch as Texas Hold’Em. Estimated revenues from onlinepoker in the United States were $2.4 billion in 2005.Unlike the case with casino games, online poker playersplay against each other, not the house. The house’s revenuecomes from a “rake,” or percentage, of the pot. Many sitesoffer organized tournaments, and some online players havegone on to win traditional tournaments. (The aptly namedChris Moneymaker won an online tournament, qualifyinghim to enter the 2004 World Series of Poker, which he wenton to win.)Like online casinos, online poker is illegal in the UnitedStates. Proponents argue that while any given hand is random,poker in the long run is a game of skill, not chance. Agroup called the Poker Players Alliance has been lobbyingto exempt poker from Internet gambling laws.A third type of online gambling is sports betting, whichis legal in many countries but only in Nevada in the UnitedStates. The Web has also given sports bettors a forum fordiscussing (or arguing about) teams and their prospects.Legal and Other IssuesIn 1998 the federal government charged more than 20Americans with operating gambling services in violationof the Federal Wire Act, which prohibits wagering over thephone lines used for most Internet transmissions. Most ofthe charges were subsequently dropped or plea-bargained,with only one casino operator serving 17 months in federalprison. In 2002 a federal appeals court ruled that while theWire Act applied to sports betting, it did not apply to onlinebetting on games of chance. However, subsequent legalambiguity has led major Internet services such as Googleand Yahoo! to remove online gambling advertisementsfrom their sites. Meanwhile, a suit by the Casino City gamblingportal on First Amendment grounds was dismissed,although other legal challenges were underway in 2007.In recent years antigambling activists have adoptedan indirect strategy of going after the infrastructure usedfor gambling transactions. In 2006 Congress passed theUnlawful Internet Gambling Enforcement Act, which prohibitsU.S. credit card companies and banks from transferringfunds to or from Internet gambling sites. (One of thearguments used by proponents was that terrorists might beusing online gambling sites to launder money.)Another issue raised by online gambling opponents isthat the high-speed, highly interactive (click-and-response)nature of online games of chance made it easier for peopleprone to gambling addiction to get and stay “hooked.” Particularconcern has been raised about teens who decide togamble using parents’ credit cards. However, studies suchas the British Gambling Prevalence Survey 2007 have suggestedthat the growing popularity of online gambling hasnot led to an increase in the rate of gambling addiction.On the other hand, congressional liberals such as Rep.Barney Frank (Dem.-Massachusetts) have sponsored legislationthat would legalize (and tax) Internet gambling, andprovide for programs to deal with underage and compul-