Gambling moves online bigtime

by Andy Balaskovitz

Andy Balaskovitz

"Bill" is a fairly happy guy. Though he’s juggling a rugged 11-credit semester (tough classes, he insists) with a 12-hour work week, he still has no complaints.

Bill is also one of millions of Americans who are gambling online. Even more unusual is that he is one of the far smaller number who regularly beat the odds - gambling is his job.

As he explains on the podcast (see left), Bill is paying his way through college with the money he makes playing poker online. He embarked on this surprising enterprise roughly a year ago, when he hit the tables at PartyPoker.com with scarcely a few dollars in his bank account. “Business was slow at first, until I began educating myself on the game and devoting more time to my new ‘job’,” he said.

By springtime last year, Bill consistently began making money and was having equal amounts of fun doing so. Now he’s a regular winner who makes his living gambling, while enjoying a traditional college experience, much like the rest of his fellow MSU freshmen.

He likes an industry that allows him to make money without having to leave his dorm. He spends a couple hours a day making a few bucks – and sometimes more than a few. Around Election Day of November 2005, when most students were debating which politician would keep the beer pong dream alive, Bill bought in at PartyPoker.com with a modest $500, expecting just another day at the office. A few hours later, cleaning up before he went out for the night, Bill cashed out with seven grand.

But these are just numbers, he insists. Maintaining his prosperous lifestyle means having to stay one step ahead of those who want to shut down Internet gambling. When online gambling had its birth roughly a decade ago, lawmakers and entrepreneurs alike were skeptical about the innovative industry. Internet gambling has since become a legal past-time overseas in flourishing havens like Great Britain and Australia.

In contrast, two laws on the books before Internet gambling became a reality keep the online gambling industry essentially illegal here in the United States, according to the U.S. Department of Justice:

• The Wire Act of 1961 prohibits transmitting gambling transactions over “wires.”
• The Professional and Amateur Sports Protection Act of 1992 (PASPA) banned sports wagering in all states except those in which it had pre-existing operations – Nevada, Oregon and Delaware [2].

However, neither political party has made much progress in calling for an all-out federal ban. Michigan is one of five states that has passed laws that expressly banning Internet gambling within its borders. But it is still difficult for the government to prosecute because the Web sites are mostly overseas. Adding to law enforcement’s future headaches is “mobile gambling,” where games like blackjack and slots can be played for fun or money directly over a cell phone.

According to an article in Time by Peter Gumbel, the United States risks getting beat in online gaming. The numbers in the youthful industry are staggering, despite the legal tangle. PartyPoker.com, the blackjack and poker daughter Web site of PartyGaming.com, averages a daily “rake” of more than $2 million (by taking a portion of each pot won throughout the Web site). Global Betting and Games Consultants of Britain estimates $12 billion was wagered in 2005 over the internet from all types of casino games – or close to 5% of the world’s total gross gambling yield. In online poker games alone, an estimated $2.7 billion will be wagered in 2006 - 10 times more than that in 2002.

According to Christiansen Capital Advisors (CCA), out of 12 million people gambling online in 2003, 4.5 million were in the U.S., dispersed among approximately 2,000 different Web sites. CCA also reported that internet gambling revenue for companies is projected to triple by 2009, bringing its total to $16.929 billion [2]. Throughout all this madness, Las Vegas attorney Anthony Cabot says the U.S. is missing out on about $7 billion in tax revenues by prohibiting online-gambling companies based in America.

Perhaps legislators will endorse online capitalism (and the tax revenues gambling would bring). As for Bill, he is simply taking advantage of the lucrative opportunities at hand.

People envy his success and most credit luck. But in all fairness, he has worked hard to get where he is today and pursues life here in this mangled 21st century with the same sort of ambition and intention that this country was founded upon.

Makes you wonder what our country would be like if everyone were as good at what they did as Bill is at knowing when to hold ‘em and when to fold ‘em.

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"Bill" is not our MSU student gambler's real name. We are protecting his identity because of the ambiguity in federal and state gaming laws.