Online Casino Gambling

Around the world, countries and states continue to debate the pros and cons of online gambling, with as many officials against the pastime as for legalizing online gaming. This week, both New Jersey and South Africa have reported important news for their gambling industries, with both regions making steps that could allow legal online gambling in the future and provide residents with the chance to gamble from the comfort of their own homes.

New Jersey Rebounds from Previous Veto

The American state of New Jersey has made progress after legislation that was created in 2011, was vetoed. Last year, Chris Christie, Governor of New Jersey, refused to allow the online gambling bill which have been sponsored by Senator Ray Lesniak and passed through the initial stages of legislation. One of Governor Christie’s main concerns was he wanted to ensure that any benefits made from online gambling actually be advantageous for land casinos in Atlantic City instead of the horse racing industry which was highlighted in the previous bill. Now, Lesniak’s new proposal has found support from fellow Democrat Senator Jim Whelan, and with the pair having removed the horse racing industry benefits from the bill, there is fresh hope that it will be approved at governor level.

Horse Racing Industry Disapproval

Whilst the pair of senators may be looking to find approval from Governor Christie, the horse racing industry has hit back at the removal of accrued benefits to their sector in the latest bill. Barbara DeMarco, one of the lobbyists for the horse racing lobby, said that the Atlantic City Race Course and Freehold Raceway would not support the new bill as a result. A similar stance was taken by members of the Standard Breeders and Owners Association of New Jersey and the Meadowlands Racetrack.

Racing Dispute Doesn’t Hold Back Bill

However, despite the disapproval from the horse racing industry, the new bill was put in front of the Wagering Committee and Senate Government and passed with three votes in its favor with none against. With the next step for the proposal to be placed in front of the New Jersey Senate, Senator Whelan pressed that it was important that New Jersey become the first state in America to legalize online gambling and poker. Meanwhile, Governor Christie also showed interest in the new bill and said that he was hoping to see if his previous concerns over the bill had been taken under advisement and alterations had been made as needed.

Ban in South Africa Could Be Overturned

Currently, there is a total ban on online gambling, poker websites and internet based casinos in South Africa. In addition, residents are also restricted from betting on sites outside of South Africa’s borders, thus cutting online gambling off for all those in the country. However, in recent months, the trade and industry committee of the South African Parliament has been discussing the pros and cons of legalizing and regulating a possible online gambling industry throughout the country. With a public hearing having been held on March 2^nd, areas of concern were highlighted, with underage gambling, illegal gambling operations and money laundering three of the worst worries. But, with the government actively discussing possibilities, the country could see online gambling in the future.

Gambling Commission Urges Legalization

Though South Africa currently has no form of online gambling and prevents its residents from enjoying such pastimes, a recent review of the industry has urged for online gaming to be allowed through rigorous regulation and taxing. With this review in mind, authorities have now begun actively discussing the topic, with both Democratic Alliance MP Geordin Hill-Lewis and Committee Chairman Joan Fubbs expressing that online gambling already existed in an illegal sense and, by ignoring it, parliament would simply let an unregulated industry flourish. Hill-Lewis went on to say that trying to eradicate online gambling completely was near impossible and by not legalizing it the government was losing out on possible economic benefits.

Money Laundering a Top Concern

One of the country’s top concerns is in regards to money laundering, and a member of the Financial Intelligence Centre, Pieter Smit, said that online gambling allowed people to transfer funds from person to person or location to location by way of cash deposits. Whilst ‘face to face’ money laundering business is easier to track, online transactions would be difficult to trace, making trying to stop illegal operations nearly impossible. Smit went on to say that if online gambling goes ahead, then venues would have to commit to Financial Intelligence Centre regulations and that online poker and betting exchanges would need to be made illegal to limit the possibility of illegal online transactions.

National Gambling Board Against Legalization

In a matter which many may think surprising, the National Gambling Board of South Africa has said that they are not in favor of legalizing an online industry. If Parliament goes ahead and approves such an industry, the National Gambling Board said that casinos must be strictly regulated and that there should be a limit on the number of licenses given out, allowing for authorities to have manageable numbers on their books. In addition, they advised that an eight year validity limit be placed on all licenses and said that underage and problem gamblers must be areas addressed in addition to stamping out fraudulent operations.

Online Uncertainty

As an increasing number of countries around the world look to online gambling, there is more debate than ever on how to regulate such sectors. Though online gambling can have many economic benefits for nations enjoying the increased income, there is also the possibility for a rise in illegal financial transactions in addition to preventing vulnerable residents from accessing online gambling too frequently, or at all. Whilst New Jersey looks to become the first American state to allow online gambling, South Africa is still in deep discussions on whether it’ll allow internet gambling at all. And, only time will tell over the coming months and years if nations will ever be able to fully regulate online gambling industries to their approved standards.

It has been revealed that online casinos are working overtime to ensure that they rebuild the lost consumer trust after the US Department of Justice cracked down on illegal websites earlier this year. Having knocked player confidence in the industry, the online betting community are increasing efforts to show players than online gambling can be safe and within legislation.

Money Laundering and Corruption Charges

Problems with the industry were first noted when the US cracked down on illegal operations earlier in the year. April saw the Department of Justice take forcible action on websites including Full Tilt Poker; a hugely popular and famed casino with consumers. Many domain names across the internet were suspended as cases of money laundering and corruption were filed against top firms, with several key operators facing resulting sentencing. And when people discovered that access to funds for Full Tilt customers had been denied, consumer confidence in the sector fell even more dramatically.

Casinos Showing Rigid Adherence

With a difficult summer being felt by the industry, it has now been revealed that many online casinos are operating very strictly within legal parameters. Transparency is also vital in a bid to show consumers that online casinos are still safe to use. And whilst many of the sectors critics continue to place blame on the online casino industry, key operators and software services are going to great lengths to rebuild the lost trust and get back on their feet.

Government Support

In addition to staying within guidelines, experts in the online gambling industry have highlighted that companies are also attempting to gain recognition, support and approval from local government bodies. EU regulations are being taken very seriously by those involved; a fact ensuring that companies can continue to operate across international boundaries and stay stringently legal. However, consumer confidence does remain low, with many people unconfident that the industry won’t see another crack down similar to those that occurred earlier this year. And whilst sportsbook and betting software services continue to try and put customers at ease, it may be some time before people are as confident with online services as they were previously.

The NFL is one of the biggest opponents of legalized sports betting, telling U.S. citizens that it will only lead to the increased manipulation of game outcomes.  However, research conducted by an investigative reporter shows that regulated sports wagering could actually help prevent match fixing and corruption.

Declan Hill, an independent British investigative journalist and author, stated that the hundreds of manipulated outcomes from soccer games being revealed in Asia and Europe is not due to the regulation of internet casinos and sportsbooks, but the extensive underground gambling market that operates in Asia and Eastern Europe.  Hill, who is perhaps best known for his 2008 release of “The Fix,” a book in which he predicted that international soccer would soon be the victim of a major scandal, recently made the bold statement that game fixers are placing their bets with unregulated and illegal sportsbooks with connections to organized crime rings.

In a December interview with The New York Times, Hill said that the gambling industry in Asia is much larger than it is in Vegas and Europe combined.  He also noted that because most of it is filtered through illegal operations, concealing fraud and money laundering within a covert, criminal industry is considerably easier.

Experts in the gaming industry state that it is very difficult to manipulate the industry with corrupted outcomes when regulated internet gambling sites are involved.  This is primarily because the online records containing customer identities and transactions create a level of transparency that works to the criminals’ disadvantage.  In addition to this, advanced technology provides for the rapid detection of suspicious wagering amounts and patterns, particularly on more obscure sports that are often vulnerable to corruptible influences.

It has been reported that as many as 200 matches could have manipulated outcomes across international borders, many of them speculated to involve a number of referees and well known players.  However, legal, fully regulated sportsbooks have come out to say that their respective services were not targeted by cheaters, claiming that both the fixed matches and participating parties would be easy to identify.

The revelation made by Hill speaks highly of the desperate need for fully regulated and licensed internet gambling, sports wagering included.  With the lingering threat of corruption and criminal activity, this is the best way to ensure the integrity of the games and most importantly, protect the players.  The NFL seems to be high on its position that illegal sports betting is not a frequent thing, claiming that legalizing and regulating it would only tempt cheaters.  However, it is becoming clearer to see that regulation may be the only way to keep incidents such as the soccer scandal that has rocked international headlines from infecting the NFL and other major sports in the United States.

It looks as is if the online gambling industry in France will be changing very soon as the country is on the verge of enacting a new legislation largely based on the successful models of the UK and other European nations.  One of the most important components of this legislation is to prevent problem gambling by setting fixed limitations on wagers among other measures.  In addition, gambling operators will be required to post warnings about underage wagering and the potential dangers of compulsive gambling.

The opening of the online gambling market in France will consist of sports betting, horse racing, and community games of skill such as poker.  At this point, it is believed that online slots games, lotteries and common casino games such as black and roulette will be excluded from the market as the French government considers them to have a higher risk of addiction.

French Gaming Authority

ARJEL, a new independent public gaming authority, will be established specifically to regulate the online gambling market.  This authority will be responsible for the following:

Making suggestions on requirements for different types of gaming licenses to the government.

Ensuring compliance for policies associated with internet accessible games.

Preparing and attributing requests for online gaming operation licenses.

Monitoring internet gaming operations and taking action against illicit gambling sites and fraudulent activity.

According to a recent report, ARJEL with be given the power to prevent access to illegal websites through a direct relationship with internet service providers, which will allow them to block financial transactions.

Operator Responsibilities

The new online gambling legislation will impose strict requirements on the operators that service French players.  These requirements include:

Operators must provide information and confirmation on their identification, shareholding, and experience in the gambling industry.  They are also required to take the measures necessary to secure online transactions, protect minors, and prevent fraud and money laundering.

Online gambling websites must be accessible via a first level domain ending in the “fr” TLD (top level domain).

Licensees must be located within the member states of the ECC and EU.  If any headquarters of operators or shareholders are based in jurisdictions considered as non cooperative tax havens, they will be refused the licenses needed to legally offer their services in France.

Possible Time of Implementation

With the implementation of the legislation known as the Draft French Gaming Law in the works, ARJEL will likely need more time to establish an efficient architecture for regulation and license distribution.  According to senior officials within the French government, France will not begin granting online gambling licenses until sometime until 2010.  In all likelihood, the Draft French Gaming Law will not be officially enacted on January 1^st as originally expected, partly because of the detailed opinion of the EU Commission rendered back in June.  For this reason, French government officials are expecting the online gambling market to open up for the launch of the World Football Cup in June at the very latest.

Despite the surging popularity of online gambling, there is still a large number of individuals who do not feel safe enough to gamble at the many available internet casinos.  Many of them believe that these websites exist solely to contribute to problem gambling, underage wagering and money laundering.  What makes it worse is that these issues are a reality in various areas of the world.  In fact, unlicensed and illegal internet casino sites are currently operating in China, Korea, Japan and many other countries.  One major reason this occurs is because of the online gambling laws enacted in certain areas.  Some countries have simply chosen to make this activity illegal and forbid their citizens from partaking.  While all jurisdictions have their reasons for being for or against online gambling, it does nothing to sooth the fear of individuals who are spooked from all the security horror stories.

Security Conscious Casinos

Interested yet hesitant parties should be comforted to know that reputable online casino operators understand their concerns regarding security.  These companies work diligently to prevent issues of fraud and hacking from occurring within their gaming environment.  The online gambling industry is prevalent in the UK and to no surprise, this area is home to internet casinos that offer players some of the best protection available.  At the same time, they realize that no website is ever 100% safe, so many are now working to improve their level of security to ensure players even better protection.  UK operators are currently working with internet security firms to enforce security protocols and verify identification.  Casinos are putting emphasis on mechanisms that prevent underage gambling as well as unauthorized account access from parties that are not validated.  These efforts are being made to better ensure that player casino accounts and most importantly, their funds, are protected.

PartyGaming and PKR.com are two of several online casinos in the UK that have decided to ramp up their security efforts.  They have let it be known that it is their obligation to keep the security systems up to date and also make sure underage gamblers are not participating.  When asked if these efforts were being made to eventually tap into the American market when and if regulation is introduced, both stated while they always look to expand, they are more concerned about providing a secure gaming environment.  In the eyes of PartyGaming and PKR.com, the potential of the U.S. market isn’t nearly as important as protecting the players.

Conclusion

If an online casino cannot provide dependable security, there is no way they will survive in this fiercely competitive market.  However, operators must be aware that the evolution of technology opens up the door to more security woes.  Every time a viable security tool or method is introduced, the criminals always seem to find a way around it.  Therefore, security systems need to be updated on a regular basis to keep the player community protected.  Thankfully, many online casinos in the UK and other areas realize this and do their best to ensure security for their players regardless of where they reside.

2009 has been a busy year for the community of internet hackers.  It has also been one of major concern for the online gambling business.  The latest issue for the industry is gambling sites being compromised through a technique known as web scraping.  According to a report published in SC magazine, internet hackers are frequently using bot programs to capture information from online casino sites to fix the odds to reveal pattern payouts and ensure larger winnings.  After gathering the information, hackers can then use their arbitration systems to determine which bets are most likely to win.  When bets are involved, this malicious technique is incredibly difficult to detect, prevent and track because the programs run off automated scripts designed to simulate the play of a live human gambler.  This also leads security experts to believe that money laundering is still a possibility within the realm of online gambling.

How Web Scraping Works

Also referred to as web harvesting, web scraping is a technique performed by a software program that extracts data from a website.  In some cases, the program is intended to simulate human exploration of the web or a particular site.  This is typically done by implementing a lower level version of HTTP or even embedding entire browsers such as Mozilla FireFox or Internet Explorer.  The technique of web scraping is quite similar to web indexing, which involves a bot crawling the web to index pages for search engines.  Though it can be used in a benign manner when it comes to web research and data integration, this technique is very dangerous in the hands of a hacker out to wreak havoc.

Virtual Casinos a Perfect Target

The fact that online gambling is entirely based on the web makes this prosperous industry a prime target for web scraping.  Knowledgeable hackers can use the method to extract the necessary details from a casino site and use their arbitration systems to play the odds at a level that virtually guarantees huge winnings.  They can use these tools to manipulate the odds in a way that improves their winning margin and also monitor the site to determine when it experiences the most traffic.  All of this is done in stealth manner, leaving the casino to believe they are dealing with a real human player while the criminal skates off undetected.

Analysts are predicting that the online gambling industry will be worth an estimated $125 billion by the year 2015.  If that is true, hackers and techniques like web scraping could become even bigger problems for the industry.  Security experts warn that web scraping occurs quite frequently, stating that a savvy hacker can easily steal data from a website, host it on another and redirect unknowing players.  Something this manipulative could lead to phishing, fraud and even identity theft.  While there are some preventative measures that can be put in place to minimize the risk, expects are concerned that far too many casino operators do not have the time or knowledge to implement them.