Payment Processing Controversy Returns Online Gambling to Mainstream Media Attention
February 11, 2010 (CAP Newswire) – Last week’s move by credit card processor MasterCard (and, eventually Visa) to start cracking down on online gambling companies generated a wave of media frenzy that’s going beyond the online gambling world and is now saturating the mainstream media, as well.
Forbes today released a story examining the potential risks being taken by online poker sites that continue to offers services to U.S. players. “[Doyle] Brunson may be making the biggest bet of his career, facing not other poker players but possibly law enforcement officials,” writes Nathan Vardi in the article. “Brunson partnered with investors in 2004 to found DoylesRoom, a Costa Rican Web site that for the last year has hosted for-money poker games for U.S. players.
“All of that is at risk now, as well as possibly the entire U.S. online poker industry, where 2.5 million Americans play and bet $30 billion annually.”
The article explores the possibility that the UIGEA, set to go into effect in June, could not only shut down all online gambling operations like DoylesRoom but also seize their collective billions of dollars in assets and levy possible legal penalties towards the sites’ owners and managers. “Now the bet is on whether or not Justice is gearing up to go directly after firms like DoylesRoom and the two biggest online poker sites still taking U.S. play: PokerStars and Full Tilt Poker.”
The article offers a fascinating look at the big business of online poker, and the difference between companies that have suffered because of the online gambling ban (like PartyGaming) and those that have thrived in the face of it (like DoylesRoom). Read it here.
The Washington Post has also weighed in on the issue, providing a rundown of the state of online gambling and what legislative efforts are needed to legalize and regulate the activity.
“Rep. Barney Frank (Mass.) and other Democrats are using the six-month [UIGEA] reprieve to push ahead with legislation that would legalize and regulate poker, mah-jongg and other online betting games — pastimes that have exploded in popularity in a country that accounts for more than half of the $16 billion global Internet gambling market,” the article explains. Read it here.
As with the recent coverage of the California online poker hearings, most of this coverage makes use of the fact that online gambling is a hugely profitable business and that, unregulated, the government is missing out on a lot of revenue. And with enormous, globally branded financial services companies like MasterCard and Visa taking action against an industry this profitable, some politicians are sure to take notice.