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Addressing the Stated Gambling Concerns Part 2 - Underage and Problem Gambling...By Hartley Henderson

Last month I started a series to provide counter arguments to the five stated concerns made by John Kyl and others by which they felt online gambling could never be regulated. These included the legitimacy of games and operators, underage gambling, problem gambling, the loss of revenues to the government and money laundering. The main purpose of this series is to provide some fodder to any lobbyists who want to try and overturn the current law. The series seems very germaine now considering that Barney Frank is currently spearheading a movement to have the UIGEA repealed, and ultimately online gambling legalized and regulated. Last month looked at the issue of the legitimacy of games and operators, and this article will address underage and compulsive gambling.

Underage gambling is a problem both onshore and offshore. While the government would like the public to believe that protections are in place to stop minors from gambling in brick and mortar casinos, at racetracks or on the lottery, studies have shown that minors are able to gamble in America and do so frequently. Fake identification is easily obtained, and in the case of lotteries often the merchants who sell the tickets aren't concerned with verifying age. Nevertheless, at least in a brick and mortar establishment visual contact can be made with the individual and identification can be requested, so if the minor is able to bet it is strictly due to the negligence of those monitoring the establishments. Online it's not so simple since the individual is unseen. Filters are generally good for keeping very young children from visiting gambling websites, but teenagers usually can get around them. Besides, today most teenagers have their own computers, and even if they are using a family computer it is unlikely they will have the websites restricted by their parents. Consequently, it is incumbent on the site owners to ensure that minors aren't betting illegally. Unfortunately for parents and gambling merchants, the best method for deterring minors was taken away when the U.S. government forced credit card companies to stop processing gambling transactions. While it's true that many teens these days can get credit cards, all information including age is fairly easily obtained if a person is forced to pay by credit card (at least initially) for their first bet. Furthermore, for teenagers, credit card limits are usually quite low. As such, if it is determined from the credit card information that the person is not of age, the credit card transaction can be denied and access for anyone with that name and address can be blocked across all online gambling networks. However, since credit cards are no longer an option to merchants or clients in the United States, the next best solution is age verification programs.

Age verification programs on the internet generally try to use public records such as voter registration information to determine if a person is of legal age. Naturally, if John Smith is on the voter's registration record for his state then clearly he is at least 18 years of age, or else he wouldn't be on the voter registration list. Likewise, if John Smith is not on the voter registration list, it could raise a flag requiring John Smith to provide additional information to the site to prove that he is indeed 18 years of age. More confidence can be given to the age verification program by instituting an authentication process that provides assurance of identity. Once the age verification program is satisfied the person is 18 years of age, a key can be mailed to that person?s address, and the person in question can be required to enter the key to gain access to the site. If the name and address are falsified by a minor hoping to gain access by pretending to be an older cousin for example, then without the key the minor would have no access to the site. Needless to say this can be quite cumbersome, but in actuality it can provide even better proof of age than a driver's license shown to a security guard at a brick and mortar casino. Idology Inc., Aristotle International and Intellicheck have been proven to be excellent products for this type of age verification.

Assuming the customers and/or merchants don't want to go to that extreme, there are other methods for trying to determine if someone is a minor. Studies have shown betting patterns that are typical of younger bettors. If a new customer shows patterns that resemble those patterns, then the site can suspend the account and demand proof of age such as a picture driver's license which they can then run through the public records to determine authenticity. In the UK, many sites do precisely this type of monitoring and also use experts who can determine if signatures which they require be sent to them are representative of minors.

Obviously no system is perfect, but technology changes rapidly and there are definitely methods to provide 95 to 99 percent certainty that a bettor is of legal age. Hence the argument that "it is impossible to stop underage betting online", as Jim Leach proclaimed, is just not true.

As for the other concern, compulsive gambling, this creates more of a challenge to the online operator. There are no verification programs online to identify if someone has compulsive behaviour as there is for determining age, but the issue is certainly not impossible to address. As is the case in brick and mortar casinos or other on land institutions, there are key characteristics that determine if someone is a problem gambler. These include but are not limited to:

- Person gambles day and night.
- Person increases the size of bets after losing
- Person deposits large amounts of funds uncharacteristically
- Person starts making bets that are unusual, i.e. large parlays when they usually haven't in the past

Obviously these can only indicate a problem, but gambling sites, particularly casinos and sportsbooks, are constantly monitoring the play of their customers, and if they do see these patterns occurring regularly they could indeed block the account so the person can't play there for a period of time. Many people would argue that online gambling sites would never actually stop these problem gamblers since they represent easy money to the operation, but nothing could be further from the truth. Most casinos and sportsbooks make their money off the customers who wager with a regular pattern, particularly at sportsbooks. They want the customers there for the long term, and problem gambling could indicate some future issues.

There are also ways for bettors to put themselves on self exclusion lists at offshore sportsbooks, just like at many brick and mortar casinos. But unlike with brick and mortar casinos, online self exclusion is actually effective. Once on a self exclusion list, it is almost impossible to get off of it. The program designed by Aristotle International spans all online gambling sites that register with it and essentially blocks a person from opening an account once his name and address or IP address or other verification tools identify that person as excluded. It should be noted that when someone tries to sign up with a merchant who has registered with the program, the person will simply come back as "declined." The merchant doesn't even need to know the reason why that person is refused as a customer. With brick and mortar casinos, clients often get around the self exclusion list. A requirement to register with Aristotle International (or any other company that runs similar self exclusion lists) could be a regulatory requirement for running an online gambling establishment.

One thing that must be noted is that while problem gambling is an issue that sites may be forced to deal with in order to appease the government, the same consideration is not made in American casinos. Walk into any land based casino and one can easily witness numerous people playing a whole line of slot machines, where they are simply dumping coins into the slot machines and pushing the spin buttons without even watching the reels. These "slot jockeys" are known to wear depend diapers so they don't have to leave their machines, and are the ultimate in problem gamblers. They may not leave the casino for hours and hours, yet the casino operators, who can witness this problem gambling, simply leave them be. The same holds true for many individuals at card tables, in poker rooms and or at craps tables. It's common to witness individuals who have simply lost it and are betting compulsively, yet the casino operators will rarely, if ever, ask the person to consider stopping. Instead, the casinos feel they have done their duty by putting up signs stating "if you think you have a problem call..." Almost all online gambling sites have links to gambler's anonymous, but for some reason the online operators are held to a higher standard than land based casinos.

Perhaps one of the most noted compulsive gamblers is William Bennett. The former drug czar under George Bush and author of The Book of Virtues lost millions at Las Vegas casinos, but never really apologized for it. Instead, this conservative pundit, who had no problem with telling people how to live, qualified his gambling by saying that he wasn't betting the milk money. In better words, while he believed he may have bet too much in the past, it was nobody's business because it wasn't harming him or his family. How ironic that today many online gambling proponents, such as Barney Frank, who make the exact same argument are labelled as immoral or clueless. It appears that if you gamble compulsively onshore it's not a problem, but if you have a gambling problem online it is an issue. The hypocrisy of some politicians is unbearable.

To conclude, underage and problem gambling are concerns, both in brick and mortar casinos and online. But there are ways to address these issues in both locations. Unfortunately, it is unlikely that today?s U.S. government is interested in hearing these solutions or honestly looking into these issues.

Next I will look at the fourth stated concern and probably the real reason for the online ban, the loss of revenues to the governments.

Hartley Henderson

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