The Toronto Sun
Wednesday, April 29, 1998

Rolling the Digital Dice

There's no guarantee online gamblers will ever see their jackpot

by Ian Harvey, iharvey@sunpub.com

Think of cyberspace as the next Wild West frontier.

Think cowboy boots, a trusty stallion, a six-shooter, and smoky saloons where the women and the whiskey are cheap and available, and there is always a card game going at the corner table.

So it is with the Internet: Wild women (and men) and gambling.

Aside from sex, one of the other fastest growing areas of the Web is gambling, the vast majority of it illicit, or at the very least, in the grey areas of the law.

Take Barry Steib, a mid-thirties kinda guy here in Hogtown who likes to gamble. He signed on for an NFL pool last year called Survival after hearing about it from a friend.

"It was a Web site. You paid $50 and you had to pick the winning team from any game in week one", says Steib, who, for obvious reasons, doesn't want his real name used. "No point spread, just the winning team. The catch was that once you picked that team, you couldn't pick them again. If your pick lost, you were out. It was instant death. That was why it was called Survival."

The rules forced the players to analyze the entire schedule and then map out a strategy that would keep them in the game until the Superbowl.

"By December, there were five of us left and we agreed to take $10,000 each and then let the eventual winner take the balance of the pot, which would be $50,000 -- obviously the guy running it takes his cut, too", he says. Throw in a couple of major upsets and just before Christmas, Steib found himself the last surviving player, and a total of $59,950 richer.

"It was a total fluke that one person won it, but he (the bookie) paid off", says our happy gambler.

But that's the big risk of online gambling: There's no guarantee the winners will ever see their jackpot.

"If there's a reason to regulate the licensed industry where the players are big blue-chip companies, then what does that say for the unlicensed, unregulated world where everyone is jumping in", asks Duncan Brown, executive director of the Alcohol and Gaming Commission of Ontario. "As it stands, our authority extends only to those licensed by the Ontario government. But are we thinking about the potential of online gaming? Damn right. It's on the horizon. All jurisdictions are thinking about the impact."

Australia is moving to license online gaming, while other jurisdictions are issuing licences as an extension of their existing gambling regulatory agencies. The U.S. is wrestling with the idea of regulation, but is well aware that the Net is not restrained by mere geo-political borders.

This week, the Gaming Lottery Corporation, a Toronto Stock Exchange and NASDAQ-traded company, plans to launch its virtual casino (www.galaxiworld.com), offering 52 games online through a simple Java-driven browser access.

"We won't be taking cash directly", explains Alex Igelman, director of special projects for the formerly Toronto-based company now relocated to the British Virgin Islands.

The money will be routed between the gambler and the casino, based in St. Kitts, through a third-party agency which creates cyber-cash accounts. GLC holds a casino licence in St. Kitts.

That, says Igelman, a lawyer, avoids the sticky problem of illegal gambling.

"It's coming", Igelman says of the gambling wave. "One study predicts that by 2000, online gaming will be a $10 billion-a-year industry." He notes that while the demographics currently skew towards men, in line with Internet and computer use generally, there are indications that large numbers of women are itching to play as well.

"Men like the bonding aspect of gambling, while women love the slot machines and video poker", he says. "We think 20% of players will be women."

Also driving the exponential growth are set-top boxes that turn TVs into Net browsers.

A gambler "could play a few hands while he's waiting to go out for dinner or when he first gets home from work", Igelman says. "Just a few minutes a day. It brings the excitement of a casino into your living room."

Also watching with interest are the OPP, who are well aware of the boom in online gambling.

"We've got enough going on without having to go looking in cyberspace", sighs Det.-Insp. Larry Moodie of the 36-member Illegal Gambling Enforcement Unit. "But that's not to say we won't be looking at it. Someone is going to have to address the issue."

Copyright © 1998 by The Toronto Sun. All Rights Reserved. Reprinted with permission.