CyberCrime Special:<br>What's the deal with gambling on the Net?

Congress is busy wrestling with a jellyfish -- the new and so far unregulated arena of online gambling. It's a wholly squishy thing. No one is certain what's legal, or what's not. Which is why everyone had been so closely watching the progress of proposed legislation that promised to clear things up.

It's also why players and gaming operators alike were so shocked when federal prosecutors charged 14 owners and managers of Internet sports betting companies, under existing federal laws -- laws enacted before online gambling was a twinkle in anyone's eyes.

What are the implications of the new charges filed in New York federal court this month? At first, they seemed to be the death knell for online gambling. But is that really so?

What's the deal?
	Ten reasons why Internet gambling should be illegal
	Why Internet gambling should be legal
	Are online gamblers breaking the law?

According to the Department of Justice, it's all pretty straightforward. "It's a federal crime to use the Internet to conduct betting operations," said Attorney General Janet Reno in a statement she issued following the charges in early March. "And to Internet betting operators everywhere we have a simple message: You can't hide online and you can't hide offshore."

But never has such a supposedly "simple" message raised so many complex questions.

The reason is that current laws -- specifically the "Wire Act," under which the 14 were charged -- were written to prevent interstate communications by sports bookmakers. The Wire Act makes it a crime for someone in the business of betting to knowingly use a wire communication to transmit bets or betting information that entitles the business to receive money or credit as a result.

What's the deal?
	Capitol Hill considering virtual prohibition
	States betting against Internet gambling.
	Enforcing Internet gambling laws

But, as such, the law then covers an ever so narrow aspect of online gambling. It does not cover casino-style gaming. It's also difficult to prosecute foreign corporations for violating U.S. law -- experts vehemently disagree whether the government could move against a betting site in Antigua that happened to make book with a guy from Minneapolis. If the business operates entirely outside the U.S., the legal authority to prosecute the company becomes less established.

The government, ever sensitive to the law's scope, purposely chose its targets to maximize its prospects for success. For one, it went after sports betting businesses that could come under the Wire act. And it chose "offshore" sports betting operations that were, allegedly, actually doing business in the U.S.

One of the companies has a business office in New York. Others allegedly sent correspondence and returned money to undercover FBI agents using U.S. postage stamps and return addresses. In some cases, the toll-free telephone numbers used on the sites were reportedly traced to locations within the U.S. And all of the companies allegedly advertise their sports betting operations to U.S. customers specifically.

What's the deal?
	Should ISPs be targeted?
	Gamble while you work.
	Online gambling Web sites

The reality is, to date, no bettor has ever been federally prosecuted for gambling online. No casino-style Internet gambling operations have been targeted either.

If the federal government wants to prosecute those players, it will have to wait until Congress passes an applicable law. Presently, there are two bills pending in the U.S. Senate and House. Each seeks to make Internet gambling a federal crime, with criminal penalties for both bettors and businesses alike.

Meanwhile, online gambling continues to flourish. With more than 200 gambling-related Web sites worldwide, experts predict that the online gaming industry will pull in as much as $25 billion by the year 2000. But if gaming continues to thrive, so do the legal ambiguities that plague it. Congress is busy wrestling with a jellyfish -- the new and so far unregulated arena of online gambling. It's a wholly squishy thing. No one is certain what's legal, or what's not. Which is why everyone had been so closely watching the progress of proposed legislation that promised to clear things up.

It's also why players and gaming operators alike were so shocked when federal prosecutors charged 14 owners and managers of Internet sports betting companies, under existing federal laws -- laws enacted before online gambling was a twinkle in anyone's eyes.

What are the implications of the new charges filed in New York federal court this month? At first, they seemed to be the death knell for online gambling. But is that really so?

What's the deal?
	Ten reasons why Internet gambling should be illegal
	Why Internet gambling should be legal
	Are online gamblers breaking the law?

According to the Department of Justice, it's all pretty straightforward. "It's a federal crime to use the Internet to conduct betting operations," said Attorney General Janet Reno in a statement she issued following the charges in early March. "And to Internet betting operators everywhere we have a simple message: You can't hide online and you can't hide offshore."

But never has such a supposedly "simple" message raised so many complex questions.

The reason is that current laws -- specifically the "Wire Act," under which the 14 were charged -- were written to prevent interstate communications by sports bookmakers. The Wire Act makes it a crime for someone in the business of betting to knowingly use a wire communication to transmit bets or betting information that entitles the business to receive money or credit as a result.

What's the deal?
	Capitol Hill considering virtual prohibition
	States betting against Internet gambling.
	Enforcing Internet gambling laws

But, as such, the law then covers an ever so narrow aspect of online gambling. It does not cover casino-style gaming. It's also difficult to prosecute foreign corporations for violating U.S. law -- experts vehemently disagree whether the government could move against a betting site in Antigua that happened to make book with a guy from Minneapolis. If the business operates entirely outside the U.S., the legal authority to prosecute the company becomes less established.

The government, ever sensitive to the law's scope, purposely chose its targets to maximize its prospects for success. For one, it went after sports betting businesses that could come under the Wire act. And it chose "offshore" sports betting operations that were, allegedly, actually doing business in the U.S.

One of the companies has a business office in New York. Others allegedly sent correspondence and returned money to undercover FBI agents using U.S. postage stamps and return addresses. In some cases, the toll-free telephone numbers used on the sites were reportedly traced to locations within the U.S. And all of the companies allegedly advertise their sports betting operations to U.S. customers specifically.

What's the deal?
	Should ISPs be targeted?
	Gamble while you work.
	Online gambling Web sites

The reality is, to date, no bettor has ever been federally prosecuted for gambling online. No casino-style Internet gambling operations have been targeted either.

If the federal government wants to prosecute those players, it will have to wait until Congress passes an applicable law. Presently, there are two bills pending in the U.S. Senate and House. Each seeks to make Internet gambling a federal crime, with criminal penalties for both bettors and businesses alike.

Meanwhile, online gambling continues to flourish. With more than 200 gambling-related Web sites worldwide, experts predict that the online gaming industry will pull in as much as $25 billion by the year 2000. But if gaming continues to thrive, so do the legal ambiguities that plague it.