Of all the ways fortunes are won and lost over the Internet, few endeavors have enjoyed the explosive growth or weathered the intense scrutiny of online gambling. Its popularity is surging, thanks to a proliferation of Web sites that cater to bettors, a poker craze that shows no signs of abating, and continued interest in wagering on huge sporting events such as the Super Bowl and the World Cup.
At the same time, debate over the legality and morality of Internet gambling has raged since the very first bet on the virtual  blackjack table. The brief history of online gambling is an ever-evolving drama that has swept up lawmakers, entrepreneurs, criminals, lobbyists, and opportunists of every stripe.
Although it is currently illegal to operate a gambling Web site within the United States, that has not stopped millions of U.S. Internet users from visiting offshore gambling sites. While efforts in Congress to strengthen existing laws have been stymied for years, the industry has matured quickly, with the larger players consolidating to such an extent that prohibition might be impossible. Many experts believe the U.S. has little choice but to embrace regulation.
A quick look at the numbers confirms that foes of Internet gambling face some pretty long odds.
High Stakes
Online gambling is a $10 billion-plus behemoth that benefits from a powerful combination of cutting-edge technology, widespread broadband availability, and unprecedented interest in betting.
Worldwide online gambling revenues rose from $8.5 billion in 2004 to $10.9 billion in 2005, according to a December 2005 report from the New York-based research firm eMarketer. Its paper, "Online Gambling: Bet, Call or Fold," also reports that participation from within the U.S. has increased substantially in recent years: a survey conducted in July 2005 showed that 30 million Americans visited online gambling sites that month, more than doubling the ranks of the 13.6 million players who visited in December of 2001.
Koleman Strumpf, an Associate Professor of Economics at the University of North Carolina at Chapel Hill and an expert on sports bookmaking, said that as people who are Internet-savvy take up an increasing share of the population, interest in online wagering will continue to rise. The legal status of online gambling in the U.S. will do little to slow the fervor, he said.
"When there is a large demand for an activity," Strumpf said, "supply will figure out a way to get around regulatory roadblocks." In other words, people like gambling online -- a lot -- and will continue to do it, especially as broadband Internet access becomes more widespread and people are able to reach highly interactive gaming sites with enough bells and whistles to make for an engaging experience. (continued...)
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