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The Online Gambling Industry[Part 4]

December 17th, 2007


 | The Online Gambling Industry[Part 1] | The Online Gambling Industry[Part 2] | The Online Gambling Industry[Part 3] | The Online Gambling Industry[Part 4] | 

As it stands, the U. S. government is the only real obstacle to the reliable, credible, and successful operation of internet casinos.

Online Gambling: A Perfect International Market?

While perfect markets can never realistically exist, internet gambling has the potential to be one of the closest approximations yet in human history. Usually, the export of services becomes complicated, as it usually involves the movement of people and equipment over state borders thus introducing new externalities; contrarily, gambling is one of few services that can be supplied exclusively via the internet, which practically operates in the absence of the burdens of physical limitations and their corresponding distortions.

Cyberspace is an abstract realm that holds the possibility of achieving closer adherence to perfect-market assumptions. It shows promise for the ever-increasing transparency of economic transactions. Practically infinite capacity, decentralization of access control, and constant innovation of hardware and software methods allows for thousands of companies to compete and cater to different preferences, making monopoly virtually impossible (no pun intended) in 2006, U. K. government estimates projected that there are 2,300 online gambling sites worldwide. The ready, rapid access of information can allow website to provide catalogues of competitors sorted by the user’s preferences, increasing symmetry of information. Even the elusive condition of arbitrage could be brought closer to fruition by compiling prices internationally.

Present efforts by private companies, namely Google, Inc. to centralize information have been met with great success. However, such centralization is a double-edged sword for the future of internet gambling and markets like it: while it can give the consumer easy access to a wealth of information never had before, it also gives government regulators new opportunities to police internet usage. Google’s recent cooperation with Chinese authorities in blocking access to government-censored websites is testament to this danger. When the appropriate technology is attained, the political climate surrounding internet gambling will determine whether it will be abolished entirely or permitted to blossom into the profit-making machine it has the potential to be. Nevertheless, in the status quo, legal barriers have held and continue to hold the industry’s growth in check.

[1] Internet gaming, online gambling, online gaming, etc. henceforth all refer to the same thing.

[2] The term “Brick & Mortar” (abbreviated B&M) used to describe casinos refers to conventional gaming houses.

[3] A good explanation can be found at http://en. wikipedia. org/wiki/Expected_value.

[4] Texas Hold’em is presently the most popular variant of poker played in casinos and online.

[5] This is just a variant of Texas Hold’em where the betting structure allows a player to bet all the chips he has on the table at any time. The result is a very volatile, but highly skill-dependent game.

[i] Cross-Border Gambling on the Internet: Challenging National and International Law, 21. Swiss Institute of Comparative Law. (Zurich: Schulthess, 2004)

[ii] National Gambling Impact Study Commission Final Report. http://govinfo. library. unt. edu/ngisc/reports/fullrpt. html (this and all websites accessed December 9, 2006).

[iii] Online Poker. Wikipedia. http://en. wikipedia. org/wiki/Online_poker

[iv] Basu, Indrajit. US-barred gambling set to roll in Asia. http://www. atimes. com/atimes/South_Asia/HJ31Df01. html

[v] Internet World Stats. “World Internet Usage and Population Statistics. ” http://www. internetworldstats. com/stats. htm.

[vi] McCarthy, Michael. New legislation may pull the plug on online gambling. http://www. usatoday. com/tech/2006-10-02-internet-gambling-usat_x. htm? POE=TECISVA.

[vii] Illegal Internet Gambling: Problems and Solutions. http://www. ncalg. org/Library/internet/Kyl_Internet. pdf

[viii] Hansen, Burke. Tiny Antigua grabs the US by its illegal, online dice. http://www. theregister. co. uk/2006/11/21/antigua_wto_bet/

[ix] Cross-Border Gambling on the Internet, 146.

[x] Burke, http://www. theregister. co. uk/2006/11/21/antigua_wto_bet/

[xi] Bell, Tom. http://www. cato. org/testimony/ct-tb052198. html

[xii] The Technical Feasibility of Regulating Gambling on the Internet. Australian Institute of Criminology http://www. anu. edu. au/people/Roger. Clarke/II/IGambReg. html

 | The Online Gambling Industry[Part 1] | The Online Gambling Industry[Part 2] | The Online Gambling Industry[Part 3] | The Online Gambling Industry[Part 4] | 


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