Internet Gambling

CHAPTER 5. INTERNET GAMBLING

A key mandate of the National Gambling Impact Study Commission was to assess the impact of technology on gambling in the United States. Technology in this area is evolving at a rapid rate, and its potential is only beginning to be glimpsed. This is especially true regarding Internet gambling. On-line wagering promises to revolutionize the way Americans gamble because it opens up the possibility of immediate, individual, 24-hour access to the full range of gambling in every home. To better understand the impact of Internet gambling, the Commission and its Subcommittee on Regulation, Enforcement, and the Internet received testimony from technology experts, the interactive gambling community, and public officials and reviewed the growing research on Internet use and the efforts of regulators to match the unprecedented pace of change. This chapter presents a summary of those findings and recommendations for meeting the challenge posed by this technology.

similar rates of growth. One study, which looked at Internet gambling revenues and the revenues of companies that produce software for on-line gambling operators, concluded that the Internet gambling industry’s revenues grew from $445.4 million in 1997 to $919.1 million in 1998.2 Although projections concerning the turbulent world of the Internet are notoriously inaccurate, virtually all observers assume the rapid growth of Internet gambling will continue. Sinclair estimates that Internet gambling revenues will reach $2.3 billion by 2001.3 The Financial Times and Smith Barney have estimated that the Internet gambling market will reach annual revenues of $10 billion in the beginning of the next millennium.4 Obviously, the numbers are greatly influenced by a number of hard-to-predict variables, the most important of which are regulatory measures undertaken by governments. Such efforts are unlikely to be uniform, however: Even as the U.S. Congress debates legislation to prohibit Internet...