Start of Crusade Against Internet Gambling?


July 18, 2006 -- -- Yesterday, the Department of Justice [DOJ] announced charges against 11 individuals and four companies accused of taking sports bets from U.S. residents in the $12 billion a year online gambling industry.

The charges focused on the persons and companies that supported BetonSports PLC, a U.K. incorporated, publicly traded company and popular Internet sportsbook that claims to have 1.2 million registered users.

"The view of the DOJ is and has been that Internet gambling is illegal," said Brian Sierra, a spokesperson for the DOJ.

Among those charged were the company's CEO David Carruthers -- arrested over the weekend at the Dallas-Fort Worth Airport -- and the site's founder Gary Kaplan. Both are charged with conspiracy, racketeering and fraud.

Many, both in and out of the industry, see this as the opening salvo in a battle to bring down Internet gambling in the U.S., just a week after Congress voted in favor of legislation clarifying that gambling online is a crime.

"It's a moral crusade," claimed Radley Balko, a policy analyst at the CATO Institute, an organization that scrutizes public policy. "These guys have a personal opposition to gambling and they want to impose that on the rest of the country."

In past weeks, politicians on both the federal and state level have given Internet gambling a black eye -- and a couple of bruised ribs.

Aside from Congress taking up the issue, the state of Washington recently strengthened its anti-gambling laws to make online gambling a Class C felony, on a level with animal cruelty, child molestation and rape.

Though state officials have been quoted as saying Internet gamblers won't face the same kinds of prison terms and fines as rapists and child molesters, it may be little consolation to some who get a felony conviction on their record, for playing poker.

"It's wrong for about 1,000 reasons," said Balko, "but the main ones are it's not gonna work -- it'll just push it underground."

Balko argues that any attempts to curb Internet gambling are bound to fail and are hypocritical due to the legal nature of online horse and lottery betting, which benefit individual states.

The law in Washington is so strict, he says, it has become a crime to even write about gambling.

"The Seattle Times was told it would have to discontinue its poker column because it was now illegal," Balko said.

In addition, several gambling publications have now canceled subscriptions to Washington State residents.

According to Sierra, the new laws and Congress' interest in online gambling have nothing to do with the latest round of charges lodged by the Department of Justice.

"We're not trying to send a grand scale message here," he said. "We've been saying it for years: Internet gambling is illegal."

Sierra says the department's position is and has always been that anyone either in or outside of the U.S. who operates illegal online gambling operations to take bets from U.S. residents is committing a crime. Period.

But Balko argues that the laws enacted and speculated about are being made on political points which are a stretch and in some cases are downright absurd.

"The people who are pushing this ban in Congress ... try to argue these sites prey on children, which is totally ridiculous," he said. "If your kid has access to your checking account or credit card and is making transfers to off-shore accounts across the world, Internet gambling is the least of your worries."