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U.S. Controversy over Online Gambling via Internet Cafes and "Sweepstakes" Escalates

June 22, 2010 (CAP News Wire) – As the CAP News page recently reported, a number of U.S. states (most in the South) are struggling with a new controversy over the legality of Internet gambling via a special loophole some smaller companies are using to let customers wager money online.

Now, North Carolina lawmakers are close to banning this new form of Internet gaming for money. North Carolina’s explains how it works: “Folks can walk into a permitted business, fill out a one-time registration form with a secret code to log in to play games, and draw from a nearby automatic teller machine to buy Net time to use the Internet.

“Time can be used for social networking, e-mailing or more than likely — for playing games of chance on a computer to win money,” the article continues. “Courts have held that Internet gaming is not specifically outlawed in the 2006 law that banned 2006 video poker. But now, because of its similarities to video poker, Internet gaming could be banned as well.”

The article goes on to explain how a state senate judiciary committee is working to legally stop this type of business. (For its part the advocates legalizing and taxing the practice, a stance more and more common in related online gaming matters.)

The Associated Press reports that the state is expected to vote this week on whether or not to pass new laws outlawing the online gaming parlors. The Wasington Daily News reports that the law may already be in the works.

In Boone, another smaller North Carolina township, the town council has already taken measures to ban the Internet games, passing “an ordinance limiting the locations and hours of electronic and Internet gaming sites” that goes beyond the existing moratorium passed on March 31, according to the Wautaga Democrat.

There have also been several raids on this type of business in Texas, according to that state’s CBS affiliate.

How far will politicians go in their moral anti-gambling crusade? In Florida, per the, the efforts of the authorities to stamp out Internet cafes that offer sweepstakes gambling is targeting non-profit veterans organizations — a risky political move, to say the least.

The Tampa Tribune also reports that new “gaming rooms” are opening almost as fast as authorities are shutting them down. “Six weeks after authorities in Marion County shut down three parlors, more have opened across the region, including in Brooksville,” writes Tony Holt.

The lesson here seems to be that business people and gamblers are proving that they won’t be stopped from the Internet games, despite larger efforts from the authorities to shut them down. This may not exactly be online casino gambling, but it’s close: As the article points out:

“Supporters say gaming, or gambling, is a personal choice that is victimless, and like alcohol and cigarettes doesn’t need to be prohibited, just regulated. Of course, those products are associated health risks, while Internet gaming is not.” Sounds a lot like the recent UIGEA debates, doesn’t it?

“There’s a lot at stake here,” that article adds. “The sweepstakes industry estimates up to 600 gaming locations have cropped up across the state.” Again, using the likely large economic effects of banning online gambling to argue for its regulation and continued legalization.

No matter what happens, too, it’s becoming clear the Americans will find ways to engage in online gaming, one way or the other. As authorities continue to remove the legal options, more new forms of iGaming continue to appear.