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Internet Gambling

Why is Washington out to stop it?
Bruce Schoenfeld
From the Print Edition:
Gene Hackman, Sep/Oct 00

(continued from page 4)

McAllister made a name for herself and Antigua as the spokesperson for responsible Internet gaming. She appeared on numerous U.S. television shows in her immaculate suits and skirts, spreading the message of her island nation as a tiny David against the economic imperialism of the American Goliath. (Never mind that she was born in Hampstead, a posh London neighborhood, and educated in Switzerland.)

"We have understood something that is an alien concept to the U.S. government," she said in her educated London accent. "The Internet cannot be recaptured by the U.S. or any other government on this Earth. The U.S. is a power that has sought to alter, intervene and control every man-made event on this planet for the last 200 years, but this cannot be controlled and it drives the U.S. crazy."

Like any unregulated environment, the Internet runs on reputation. "If you see that there's a gaming seal from the Antiguan government, chances are pretty good that the site is OK," says Jerry Stein of "But remember that I can put anything on my site that I want to. So do your due diligence. Go to the trusted sites. Look around. Make sure the site you're going to use is advertising in a lot of places. Don't put all your bankroll into one casino on the first try. Make sure you talk to a live person, not just communicate through e-mail. And then bet a little and see what happens. If you get paid, chances are 99 percent you'll keep getting paid."

In the past year and a half, Stein says, he hasn't heard of a single bettor getting stiffed by an Internet gambling provider. "There's no reason for any of these companies to screw players," he says. "It's no different than Vegas or Atlantic City. Gambling is a form of entertainment. If you go to the movies and you're uncomfortable in your seat, you're not going back, whether you've paid $3 or $7. And I think you'll find that, in the long run, we'll treat you better than Vegas does."

Not every Internet proprietor is as easy to track down as Stein. If you called Costa Rica-based Bali Sports Book, before they went out of business, looking for information, for example, you were told to e-mail a certain Laura. Unsurprisingly, Laura never responded. MayanSports, out of Dominica, responded to an inquiry with an information stonewall. "There's nobody here who can talk about our site," one employee said, moments before hanging up. A site called InterBet offered a telephone number in the United Kingdom that rang unanswered for minutes. That number no longer exists. Some sites, like Antigua's World Wide Tele-Sports, offer no telephone information at all.

It's always wise to remember that much about the Internet isn't necessarily what it seems, and to take your risks accordingly. Many bettors are startled to learn that a single company, Antigua-based Starnet, runs or licenses software to as many as 300 different gambling sites, many of which purport to compete with each other. "If you look at actual sites out there, our licensees probably account for about 25 to 30 percent of them," says Jason King, the CEO of Inphinity Interactive, Starnet's development arm.

King doesn't argue that the huge number of gambling sites on the World Wide Web creates confusion for customers. Such confusion can only help the illegitimate operators, which hide in the fog of new and unfamiliar names.

"We're big proponents of regulation, as I think most of the legitimate people in the industry are," King says. "We want to weed out those people who aren't paying consumers or are running random-number generators that are less than random, and that will increase consumer confidence. Consolidation in the industry will lead to more recognized brands, and that will help raise consumer confidence even more. That's the goal, and we hope to be in the forefront. There are a lot of people who will only shop at Amazon because they recognize the name. There's not really anyone in Internet gambling in that situation yet, and Starnet can be that name."

Some virtual sports books and casino sites may seem to have Antiguan licenses, but they're actually fronts or dummy corporations. Their real owners may not want their identities known because they've run into trouble on the Internet, or perhaps beyond. "There's no way to definitively tell who you're dealing with," admits Stein. And the truth is, Stein isn't actually named Jerry Stein. He uses that pseudonym because he isn't Antigua-based, though his company is, and he doesn't want the Antiguan government or any other to know exactly where he happens to be located.

But despite such evasive maneuvers, Stein makes a persuasive case that he has taken safeguards to ensure consumer safety. handles credit card betting, but only through a third party, EFSC (Electronic Financial Systems Caribbean), which issues virtual money for use on his and other sites. "They use cryptic code, and we have no access to your information," Stein says. "The idea of an 18-year-old kid taking mama's credit card and running it up is almost impossible, and that's obviously what we want. I don't want somebody's house payment. I want entertainment dollars."

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