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Experts testify in Congress on behalf of internet gambling industry

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Supporters of a regulated internet gambling environment testified before Congress yesterday, offering evidence that many of the alleged social ills associated with the industry are already being adequately addressed in jurisdictions that offer regulated gaming environments.

"It was made clear at today's hearing that online gambling can be effectively regulated," said Jeffrey Sandman, spokesman for the Safe and Secure Internet Gambling Initiative. "Instead of prohibiting Internet gambling, which is futile, the government should regulate and tax Internet gambling to ensure proven and effective security controls are implemented to protect consumers and capture billions in revenue that is needed for critical government programs."

Opponents of the industry frequently make wild accusations regarding the dangers of internet gambling for children and compulsives, while also arguing that fraud and money laundering are widespread. Leading experts in the internet gambling business took the stand to dispute those allegations. As Lawrence Lessig has made clear, the internet provides potentially a more, rather than a less, regulated environment, since the digital information packets that constitute the internet can be tracked indefinitely.

The head of online services for GamCare, a charitable organization committed to addressing the social impact of gambling, testified that a comprehensive regulatory scheme can effectively discourage underage gambling. After all, what makes age verification for gambling different than age verification for pornography?

"We are satisfied that if the move towards more responsible operation continues to gather pace, as is increasingly observed across Europe and the rest of the world, that the continued legitimate development of the industry need not be off-set against significant increases in problematic gambling," said Andrew Poole. "Robust, formal regulatory frameworks undoubtedly represent the best opportunity for achieving this."

Support came from some surprising sources. Keith Whyte, who is the executive director of the National Council on Problem Gambling, discussed the ways that technology can be used to control compulsive gambling online.

Safe choices

"Problem gambling is a serious and even life-threatening mental health disorder," said Whyte. "However, the graphical and interactive structure of the Internet provides a revolutionary opportunity to create informed consumers with access to a variety of information designed to encourage safe choices and discourage unsafe behavior. The technology also exists, unlike for other forms of gambling, to allow players and operators to set limits on limits on time, wagers, deposits, etc…as well as to exclude themselves. Clearly gambling on the internet raises some difficult issues, but it provides theoretical opportunities for operators to deliver responsible gaming programs that meet or exceed current standards in the 'bricks & mortar' gaming industry."

As the US Government knows well, controlling the pocketbooks of the gamblers provides enormous leverage. Gerald Kitchen, the CEO of SecureTrading, a payment service provider specializing in the secure processing and settlement of Internet payments, explained that payment processing technology has been used other countries to target and control problem gambling.

"The issue of compulsive gambling remains a significant challenge and the approach required to effectively combat this requires transparency and involvement from various stakeholders," said Kitchen. "Payment card holders can be offered the possibility to restrict their ability to gamble on the Internet by way of applying to be excluded via a self-exclusion program. When self-exclusion from Internet gambling is put into effect via the payments system, it becomes impossible for the person concerned to participate in any gambling on the Internet that uses traditional card payments through the payment processor."

Perhaps the most outrageous accusations have been that internet gambling could provide money laundering opportunities for [insert favorite terrorist here], when anyone who understands the banking system knows that the electronic transactions of the online casinos are far more traceable than the cash transactions of the "bricks and mortar" variety.

"As with all other industries and sectors it (Internet gambling) is capable of control in order to prevent it being used as a source of crime," said Clive Hawkswood, CEO of the Remote Gambling Association. "Within the United States vast amounts of credit card transactions take place on a daily basis. The system is well established and well policed in order to counteract fraudulent and criminal transactions. The only circumstance in which crime can flourish is if the activity is unregulated."

A former senior executive in charge of compliance at Visa concurred. Jon Prideaux, the CEO of Asterion Payments, testified that the technology is in place to protect consumers, and keep evil doers at bay, in a regulated online environment. "On the basis of my experience I can unequivocally state that Internet gambling can be regulated, and that abuses can be effectively regulated and controlled," said Prideaux. "Regulation ensures that players get a fair deal and are not cheated…. We owe it to people who have experienced problems with Internet gambling in the past to introduce a regulated environment where the proper protection can be provided to the vulnerable."®

Burke Hansen, attorney at large, heads a San Francisco law office

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