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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 6)

All of it will happen silently, seamlessly, unobtrusively. "You're not bringing in flashing lights," Ware says. "You don't have some ugly riverboat going up and down the Charles. You have a box and an office and customers in the privacy of their own homes. Which is better?"

Today is the first day of the NCAA's Men's Basketball Tournament, so Schillinger and Ware are in early. Tip-off is half an hour away, but Schillinger can't find an unscrambled signal on the satellite dish. Normally this wouldn't be a problem because a cable hookup serves as a backup system, but today the cable is down. Every few minutes, Schillinger calls the cable company. Each time, he's told not to worry, that the repair order will be filled immediately.

The last time the television went down, Schillinger had to call his 11-year-old and ask him to describe a golf tournament to him off the television at home. Schillinger was offering stock-exchange odds on the various golfers and they'd shift with each shot. If he couldn't see the placement of the ball, he couldn't estimate the golfer's chance of gaining or losing a stroke. (For that reason, World Sports Exchange only offers such interactive betting on televised events.) "I was asking him, 'How's the putt? How far away is Tiger?'" Schillinger says with a laugh. "'Could I make that putt?'"

Schillinger couldn't do that now, at least with a local call. His wife and kids no longer live on Antigua. Last year, they returned to California, and a normal American life. For a while, his wife was traveling down once a month, but she has stopped doing that. With Schillinger in exile indefinitely, they have made plans to divorce.

Schillinger calls his children every day from Antigua. "I'm doing all of this for them, not for me," he says. "I'm not trying to make $20 million to put in my pocket or have a good time. I'm trying to make $10 million for my son and $10 million for my daughter. What I object is to Jon Kyl portraying me like I'm some kind of dangerous criminal. All I am is a businessman, like anybody else."

It turns out the cable had been turned off because the satellite temporarily went down. That and other crises are resolved by the end of the day, to the musical accompaniment of bets rolling in. Schillinger works an uneventful two-hour shift in a beachcomber shirt and bare feet, monitoring the golf tournament, shifting odds on a player several times a minute, slugging down Cokes. If these are high crimes he's committing, they're taking place in rather mundane fashion.

That hardly mollifies Kyl, who wants a message relayed to Schillinger and Ware. "What I say to these guys is, 'You come back to the United States, help us shut down all of these sites, and put your entrepreneurial skills to use in a law-abiding and productive way, and we'll say a good thing about you at the time of the sentencing,'" he says. It is hardly enough to disband this multimillion-dollar business.

No matter what Kyl might offer, Internet gaming isn't going away. "The majority of people in the game now aren't American, and they don't care about the U.S. market," said McAllister. "All the Kyl bill could possibly do is punish Americans for being American. That's what makes it so silly."

The amount of money bet on Internet gambling sites, both sports and casino games, continues to increase exponentially. As with any rapidly growing industry, virtual bookmaking attracts all types. The reputable operators fear the scam artists because only a crisis of confidence among consumers seems likely to stop the flow of money. That's why they crave regulation--and it might be precisely the reason that U.S. legislators don't want to give it to them. In a sense, the shysters and con artists who run gaming sites are Kyl's best friends. Every shafted consumer is a congressional witness waiting to happen.

That's a shame, says King. "I think there are very few operators who would want to have anything to do with problem gamblers," he says. "No one wants minors on the system. I think most people are playing by the rules because it helps their business. And once we get regulation and taxation, it will only get better. As soon as the U.S. government figures out a way to regulate this, you'll see a lot fewer operators moving offshore."

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