Human beings have engaged in betting since antiquity. For a long time gambling was an activity that took place only in exclusive casinos. Not everyone could afford or access these places. Online gambling, which became a reality around 1995, allowed gambling to be a past time for many more people. Software that simulates games of chance had been in existence for a while. The use of internet became common place and inexpensive and was crucial to the establishment of gambling websites. Another necessary factor was the mechanism to make and receive payments online in a secure manner. The final piece of the jigsaw puzzle was the creation of authorities that licensed and regulated gambling operators.
Once gambling websites were established around 1995 they began to proliferate quickly. The period 2000 to 2006 was a boom time for the online gambling industry. This is because online gambling offers many advantages over land based gambling. The biggest advantage is that players can engage in online gambling from home. All that they need is a home computer or lap top with an Internet connection. Players no longer have to spend money to travel to the casino
No spending time and money to travel to casinos or going on holidays to Las Vegas. Players can come home and immediately log on to their favorite online gambling site.
Online gambling is exceptionally convenient for people who are afraid of posh casinos, with well dressed staff efficiently conducting operations and knowledgeable players who are proficient at the art and science of gambling. Internet gambling is an anonymous activity. Many of these games are played solo with the online casino software. Even in multiple player games there is no need to be face to face with other players. Most of players use nicknames and no one need know from which part of the world they are from. They can make their mistakes without fear of being made fun of and can learn the ropes at their own rate without worrying about losing a lot of money. And formal dressing can be dispensed with.
Another major advantage of gambling websites is that it delivers greater average returns to the player. The costs involved in setting up and operating internet gambling sites is much lower than that for land casinos. Because there is no real estate, there are no expensive buildings and minimal staff to pay. Thus making gambling sites do not need to make a lot of money to cover their costs and provide a return to their owners. Because of the competition in the online gambling industry, the savings are handed on to the players in the form of larger average returns. This is particularly evident in online slots where the average return is around 95%. Where as land based slots the average return may be well below 90%.
Online gambling today covers a wide range of product verticals. Sports betting can be conducted online. Players have access to the most current odds and can even engage in live betting through online gambling. Poker is yet another well-liked form of gambling. Players can play both fast cash games and in online tournaments. Online casinos offer gambling on blackjack, baccarat, roulette, craps, video poker, online slots and other games. Other forms of online gambling can include bingo and financial betting.
For better or for worse, online gambling is coming to New Jersey.
In late February, Chris Christie officially signed into law a bill that legalized internet gambling in Atlantic City.
Initially the bill was vetoed by the Governor because of issues surrounding transparency and taxes. Lawmakers adjusted the text and the amended bill passed by an overwhelming majority in the legislature and earned Christie’s seal of approval.
Here are the basics of the bill:
- Casinos located in Atlantic City will be able to apply for a license to offer online gambling. Only the twelve official Atlantic City casinos will be eligible for the license. No other organizations can offer internet gambling, and face stiff fines if they do. All facilities used for the operation of internet gambling must be located within city limits; only bets that are received by a server in Atlantic City will be legal.
- Players must be “physically present” in New Jersey to place wagers. In the future, New Jersey may develop agreements with other states where internet gambling is legal to permit out-of-state gambling. The casino’s equipment must verify players’ locations before accepting wagers.
- Any games available to play in the casinos can be played online. (For comparison, Nevada only allows poker.) As of now, sports betting will not be protected by this bill, although the state of New Jersey is trying to fight the federal statute barring the legalization of sports betting.
- The bill has all kinds of provisions to keep gambling addiction at bay, such as requiring the prominent display of the 1-800-GAMBLER hotline number, a way to set maximum bets and losses over a certain period of time, and tracking player losses to identify and limit users who may demonstrate addictive gambling behavior.
- Revenue from online gambling will carry a 15% tax. The Christie administration states that about $180 million in revenue for the state will be generated from this tax, but some analysts think this number is seriously overestimated.
The official regulations, which the bill required the Division of Gaming Enforcement to produce, were released on June 3, and are subject to a “public comment period” until August 2 before being finalized. These rules include details such as how a casino acquires the appropriate licenses and procedures for maintaining network security on gambling sites.
So, will online gambling actually benefit the state?
Revenues from Atlantic City casinos have been on the decline for the past seven years, and online gambling could be what saves the failing casinos. Since 2006, casino revenue has dropped from $5.2 billion to around $3 billion. Online gambling could be a $500 million to $1 billion industry in New Jersey, which may be enough to keep struggling casinos afloat and save jobs in Atlantic City. Further, even though estimates of tax revenue are all over the map, there is potential for online gambling to be a considerably valuable source of money for the state. The casinos will also have to pay a tax to the Casino Reinvestment Development Authority, which will provide further assistance to struggling casinos in Atlantic City.
For the player, low overhead costs mean better prizes and more opportunities to play. Casinos can incent players with free “chips” that have minimal costs for them but give players more opportunities to play and win. The convenience of gambling online allows players to play more with less travel.
One of the goals of the bill is supposedly to attract more people to visit the brick-and-mortar casinos, but it is hard to say if online gambling will actually lead to this outcome. One could speculate it could even cause people to go to the casinos less (However, this seems unlikely; the social element and the free drinks are lost in online gambling. Also, research indicates that, at least with poker, internet gaming does not reduce casino gaming.) Advertising for the host casino will be allowed on the online gambling sites, which could possibly encourage people to visit the casino but could also be annoying for players.
Online gambling could be seriously devastating for people who have gambling addictions, or even cause people to develop them, raising financial and moral concerns. Even with all the preventative steps the bill requires, it will definitely be much harder to cut off compulsive gamblers if they can place bets anywhere with an internet connection.
Regardless, it is going to be a while before the casinos can actually kick off their online gambling offerings. The regulations need to be finalized and casinos need to apply for licensure and develop their gambling websites. This means the casinos will not be enjoying this new source of revenue during the 2013 summer season, which could be Atlantic City’s toughest season ever following recovery from Hurricane Sandy.
Internet Casinos Inc. (ICI), the world’s first online casino, started operating from August 18, 1995, with 18 different games. Since then more than 1,400 websites, mostly domiciled in small Caribbean islands, have given rise to an industry that grosses over $3 billion a year. In fact no business on the Internet earns more revenue than online gambling. Out of the estimated 14.5 million online gamblers, almost 30 per cent are from Asia.
A bet can be placed in minutes. Anyone with a credit card can set up an offshore currency account with a gambling site, leaving them free to place bets on sporting events like Wimbledon, cricket, horse racing and Formula One, or join a virtual casino to play slot machines, roulette, blackjack, poker etc. Companies like Flutter and Betmart accept bets on anything from who is going to win the Nobel Prize to whether Madonna is getting a divorce or not. Bets can range from a nickel to thousands of dollars and according to whether you win or lose the amount is automatically adjusted to your account. The final balance can then either be mailed to you or left for future bets.
The law relating to online gambling in India needs to be understood within the country’s socio-cultural context. At the outset, gambling, although not absolutely prohibited in India, does not receive express encouragement by policy makers. The Indian organized gambling industry is estimated to be worth around US$8 billion. While stringent laws have checked the proliferation of casinos and high street gaming centres as in many other countries, barring the state of Goa, the lottery business remains the most post popular form of gambling.
Though gambling is not illegal, it is a highly controlled and regulated activity. Modern India is a quasi-federal Constitutional democracy and the powers to legislate are distributed at the federal as well as the state levels. Gambling features in List II of the Constitution of India, this implies that the state governments have the authority to enact laws in order to regulate gambling in the respective states. Thus, there is no single law governing gambling in the entire country. Different states have different laws governing gambling in addition to the laws that have an application across the country. While some states have banned lotteries, other states allow state government lotteries marketed and distributed in other lottery playing and promoting states through private entities.
Regulation of gambling
The courts have defined gambling as ‘the payment of a price for a chance to win a prize’. The dominant element of skill or chance shall determine the nature of the game. A game may be deemed to be gambling if the element of chance or luck predominates in deciding its outcome. As a result, Indian courts have held that betting on horse racing and a few card games are not gambling. The right to undertake the business of gambling and lotteries is not considered as a fundamental right protected by the Constitution of India. It may however be pointed out that the state government run lotteries make significant contributions to the state exchequer of several state governments and the Union government, and hence there is a resistance to complete prohibition.
The following legislation is pertinent to gambling:
The Public Gaming Act, 1867
This Act provides punishment for public gambling and for keeping of a ‘common gaming house’. This Act also authorises the state governments to enact laws to regulate public gambling in their respective jurisdictions. The penal legislations in respective states have been amended in accordance with their policy on gambling. However, this legislation does not have any direct impact on online gambling unless a wide interpretation is given to the definition of common gaming house so as to include virtual forums as well.
The Indian Contract Act, 1872 (ICA)
The ICA is a codified umbrella legislation that governs all commercial contracts in India. Under the ICA, a wagering contract is the one which cannot be enforced. The Act lays down; ‘Agreements by way of wager are void, and no suit shall be brought for recovering anything alleged to be won on any wager or entrusted to any person to abide by the result of any game or other uncertain event on which any wager is made’. Gambling, lottery and prize games have held to be wagering contracts and thus void and unenforceable. While a wagering contract is not illegal, it cannot be enforced in a court of law. Thus, the courts will not entertain any cause of action that arises out of a wagering contract.
Lotteries (Regulation) Act, 1998
This Act provides a framework for organizing lotteries in the country. Under this Act, the state governments have been authorized to promote as well as prohibit lotteries within their territorial jurisdiction. This Act also provides for the manner in which the lotteries are to be conducted and prescribes punishment in case of breach of its provision. Lotteries not authorized by the state have been made an offence under the Indian Penal Code. Several non-lottery playing states, like Gujarat and Uttar Pradesh, have prohibited the sale of other state-government lotteries under this Act.
Indian Penal Code, 1860
Section 294A deals with keeping lottery office. It says that whoever keeps any office or place for the purpose of drawing any lottery not being a State lottery or a lottery authorised by the State Government, shall be punished with imprisonment of either description for a term which may extend to six months, or with fine, or with both.
And whoever publishes any proposal to pay any sum, or to deliver any goods, or to do or forbear doing anything for the benefit of any person, on any event or contingency relative or applicable to the drawing of any ticket, lot, number or figure in any such lottery, shall be punished with fine which may extend to one thousand rupees.
The law related to gambling is also applicable to online gambling. All gambling contracts are considered to be wagering contracts and it is not possible to enforce such contracts under the ICA, detailed above.
As pointed out earlier, the online lottery is the most popular form of internet gambling in India. Most companies marketing and distributing or conducting state government-sponsored lotteries through the internet are not allowed to sell their services in the states that banned lotteries. In most cases, these marketers and distributors limit their online services to consumers who are residents of the states where a lottery is permissible. Notwithstanding the fact there has been no reported case of breach by any company promoting online lotteries, most of these companies (as a safeguard) seek an undertaking from their consumers relating to their residence.
There have been instances where one state has banned the lottery of other states, including online lotteries. In a recent case, the Karnatka High Court upheld the decision of the Karnataka government to make itself a ‘lottery free zone’ by imposing a ban on lotteries of all other states, including online lotteries under the Lotteries (Regulation) Act 1998. The state government, in this case, directed the closure of the terminals and kiosks selling the online lotteries.
Enforcement over foreign jurisdictions
If the websites are hosted and operated from outside India, it may be difficult for the Indian authorities to issue any directive to close them down or prohibit their access without using its blocking powers under the ITA. The authorities have little to worry about, as Indian foreign exchange laws do not permit remittances outside India for gambling related activity, such as the purchase of lottery tickets, football pools and sweepstakes. As a result, a gambling website hosted outside India aiming at receiving money from within India cannot do so through legal channels.
Online gambling remains a highly regulated sector with seemingly limited horizons to grow. While the present regulatory framework makes it difficult for offshore gambling websites to target customers in India, the India-based companies can only distribute and market state-government lotteries online in permitted territories. The pervasive authority with the government to block gambling related websites and the impossibility of enforcing gambling-related contracts further discourage the prospects for the industry.
Ever played poker? Roulette perhaps? Have you ever wagered money when playing? Then, in fact, you have gambled. Gambling is when you wage money for something even when you do not know what the outcome will be. However, gambling seems to be a part of quite a number of people’s lives. It has become a habit, worse, even a psychological problem.
For someone who gambles for the first time, it may not be hard to get out of it. Once you win something by doing it, you may want to try it the second time. When you get the hang of gambling, you will probably want to do it again. The next thing you know, you become unconsciously addicted to it. Even when you wish to stop, there is nothing you can do.
Ludomania is known as the impulse or itch to gamble even when you know its’ corresponding implications. This however is just a minor difficulty. Severe cases actually nod into the direction of a mental disorder. It is called pathological gambling. One is considered to be a pathological gambler if one is preoccupied with gambling all the time and that is mainly all he thinks about. He tends to imagine when he will be playing again in the future or thinks about the game he played yesterday.
When someone tries to recover from gambling problems and still resorts to gambling, then it is also considered pathological gambling. It is also when someone considers gambling as an escape from reality – a sort of a makeshift world when he can be himself at least for that moment to break away from his realities.
One of the most common symptoms is the need to gamble more. When you lose a game, thus losing money, you have the urge to get it back and start gambling again. It is a never ending difficulty to those who are hooked on gambling.
Consequently, one now has a hard time controlling his gambling habit. This loss of control will eventually lead to deceit to his family and friends.
When gambling becomes so much of a habit, one may consider doing illegal acts. The need to gamble more when you lose money could lead to stealing money to recover your losses. Sometimes, one would resort to fraud. Forgery is also common when someone uses someone else’s signature especially in writing checks for him to continue gambling.
Risking his relationship just for gambling is also a symptom. When he continues to gamble even when it compromises his time away from his wife or kids is a serious problem. This could lead to divorce. This also could involve missing work as a result of being in a game instead of at work.
Another symptom is when he relies so much on his family or friends for money. When he is losing money because of gambling, he could resort to borrowing money from his family, friends, even a financial institution that could result in bankruptcy.
Gambling will become serious if not given proper attention. When this becomes a habit, it becomes a hindrance to your relationships with others, especially with your family. When this becomes severe, you should go to counseling to counteract your gambling problems. Have someone to talk to. Your family can be of help because they are your first line of defense against gambling. But most importantly, discipline should begin with you. There is nobody who can help but you alone. Remember that too much gambling can make your life miserable, so avoid excess gambling.
Bob has been writing articles online for nearly 2 years now. Not only does this author specialize in gambling and other forms of entertainment, you can also check out his latest website about: