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I've been curious about Internet
gambling for a while. There's a lot of media interest in Internet gambling
that appears to be grossly out of proportion to its status as a social
problem. A recent study found that less than 1 per cent of the population
in Canada has gambled on-line (see www.ccsa.ca/Releases/cpgirelease-e.htm),
whereas in 1997, 22 per cent of adults in Ontario had been to a casino
in the past year (Room, Turner & Ialomiteanu, 1999). The treatment
system in Ontario records less than 2 per cent of problem gamblers who
list the Internet as their primary means of gambling (Rush, Shaw Moxam
& Urbanoski, 2001). Most of the people in treatment play at bricks-and-mortar
casinos at games such as slots and blackjack. I'm not denying the real
potential for on-line gaming as a serious social problem, but I just want
to put it in perspective.
I was also curious about the
appeal. Why do people go on-line to gamble? There is no socializing, no
interaction, no night out. Perhaps that's part of the lure. You can feel
pretty much anonymous.
Technically, on-line gaming
in Canada is illegal. Here, only the government, charities and the horse
industry can legally run gambling operations. However, Canadians are allowed
to own gambling casinos that operate offshore. Most of the world's on-line
casinos are located in the Caribbean, in the Dominican Republic for example.
Several British on-line casinos were set up on the Channel Islands to
avoid the U.K.'s gambling tax, and Australia recently started to license
on-line casinos.
There are basically four types
of gambling sites on the Web. First, there are on-line lotteries. These
are ordinary lotteries where you can buy lottery tickets. Sweden has put
its national lottery on-line, but limits access to Swedish citizens. Quebec
plans to put its lottery on-line in the next year or so. Currently in
Ontario, you can only check your numbers on-line, but you have to buy
your tickets at a store.
Second, there are sports and
race books where you're allowed to place bets on the outcome of sports
games or races. Sports books currently make up most of on-line gaming.
The advantage of sports books is that you don't have to trust a gambling
site to find out if you've won; wins and losses are public information.
Third, there are on-line casinos
that include slot machines, blackjack, roulette, craps and various poker
games. These pretty much amount to what is available on many video lottery
terminals (VLTs) in other provinces. Also available in this category are
card rooms where you can play against other players rather than against
the house.
The fourth type is electronic
stock-trading sites, which, although not technically considered gambling,
are often used as a way of gambling.
There are also a number of
information sites about gambling, including on-line gambling book stores,
sites that sell information about sports teams (so that the punter can
determine his or her best bets) and sites that teach people how to gamble.
One site, the Wizard of Odds (www.thewizardofodds.com/index.html#gambling),
has an extensive library of information about gambling including rules
and strategies. This site also discusses various incremental betting systems
(i.e. chasing by increasing your bets), and why these strategies don't
work.
After a short Web search,
I found a number of gaming sites. I continued surfing to find ones with
interesting games. By the summer of 2000, there were over 800 sites run
by over 250 different companies. These numbers have likely doubled since
then. At some sites, you have to download software. Downloading takes
a few minutes, but speeds up the process of gaming and increases the potential
quality of graphics and sound. Other sites run "no download" games. The
no-download games run fine, but you will notice delays between actions,
and occasionally, the graphics aren't updated.
Casinos usually have a tour
in full-colour graphics, during which you can learn what games are available
and the rules of the games. Some sites offer multiplayer games of blackjack
and poker, where you can "chat" with the other players at the table. I
selected PlanetLuck since they promised me multiplayer blackjack and poker.
Their home site was mostly in black with flashing lights. Card symbols
moved in and out around the "Open Account — Begin Winning Now" message.
Across the top of the screen was a moving banner, which alternated between
a picture of a car and a "Click Here to Win" message. Just below it another
banner claimed, "We've already paid out $57,284,154.32." Near the bottom
of my screen the following was posted —
INDULGE magazine says,
"PlanetLuck provides clients with everything land- based
casinos offer, including the sights and sounds of a real casino... www.planetluck.com
is one of the best sites on-line."
Flags indicated that the site
was available in Spanish, Japanese, German and French. The graphics were
spectacular, but I found the animation annoying.
Cashing in was a two-step
process. I registered an account at PlanetLuck and was transferred to
EzCash — an on-line bank that does the banking for a number of on-line
casinos. EzCash set up my account, checked my age by asking what year
I was born and took my credit card number, e-mail address and street address.
At both the casino and bank, I had to set up a user name and password.
In addition to asking me my card number and name, they also asked me for
the address of the bank that supported my card. I thought that perhaps
this was a credit check or a way of ensuring that I was not under-aged.
However, I recently found out that it relates to a case in California
where a woman refused to pay her credit card. She claimed that she didn't
have to pay because Internet gambling was illegal. As a result, some credit
cards refuse to honour gambling purchases. Although intended to protect
the casino from fraud or non-payment, asking for an address does ensure
some protection for minors because it makes it a bit more difficult to
get onto the site.
I set up my account with a
credit card that I rarely use so that I'd be able to keep track of the
charges and payouts. I recommend using a card with a low limit to curb
your losses in the event of fraud. However, in general, the sites are
secure and honest. According to speakers at the Global Interactive Gaming
Conference in Montreal, Canada (May 1012, 2000), security at on-line
casinos is as good as other Internet sites, such as Amazon.com, and it
has yet to report any security-related fraud. They also know that cheating
their customers is bad for business, so they tend to be honest. They want
your money, and they know that you'll spend more if you win a bit. They
know they'll win it all back eventually, so they do pay out for wins.
But since much of the on-line gaming industry is unregulated, there is
no guarantee that the site you've selected is legit. Some claim to be
accredited or licensed, but there is no guarantee of honesty. (For more
information on security issues, go to the FAQ section at www.clubchance.com.)
There is a lot of competition
in the on-line gaming industry. So, many sites offer bonuses from 5% to
20% of your initial bankroll for opening an account. This dramatically
cuts into their edge. But, there's a catch. You can't claim your bonus
and then just cash out. You have to play two or three times the amount
of the bonus, sometimes more, before you can cash out and claim your bonus.
They also say that they will not pay out the bonus if the punter engages
in irregular betting patterns, such as covering the whole board in a game
of roulette. In addition, many sites offer prizes such as trips or bonus
rewards as incentives to keep you coming back to the site.
So, on-line I went. I cashed
in for $50 US. I was awarded a bonus of $5 for typing in 777, a bonus
number I had found in an advertisement for a different on-line casino.
I started playing blackjack for $1 a hand. I like blackjack, but I can't
really afford to play at a casino where the minimum bet is often $10 or
even $25. So the Internet definitely offers an inexpensive gambling alternative.
Of course, small bets offer little hope of big wins, but larger bets are
available. Bets available include $1, $2, $5, $10, $25 and $50, which
provide more room for incremental betting than is often available at casinos
in Ontario, where allowed bets might range from $10 to $50. So on-line
gaming might attract people who like to use incremental betting systems.
The problem with incremental betting is that it works most of the time
— not all the time. So you keep trying it until, by chance, you reach
a long losing streak, and then you lose everything.
I wonder if the maximum bet
is dependent on your bankroll. It would be easy to program a Web site
to alter the allowable bet size to accommodate the amount of money that
the person cashes in with. Coincidentally, the maximum bet equalled my
cash-in bankroll, but I haven't gone back with a bigger bankroll to test
this hypothesis. As it stands, a bet range from $1 to $50 per hand makes
Internet gambling a relatively low-stakes game.
The game seemed to progress
in a manner consistent with a random drawing of cards, while playing against
a house edge of about 2.5 per cent (the expected house edge for a player
that usually follows the Basic Strategy described by Thorp, 1964). The
rules of play were a bit more liberal than those in our local casinos.
The Web game allowed surrender (i.e. giving up half the bet when your
hand is hopeless, say, a hard 16 against a dealer's ace) and hitting after
splitting aces. Betting $1 per hand, I initially just intended on playing
until my $5 bonus was gone. I won a few hands, then started losing. Since
Internet gaming is unregulated, there is no way of knowing how valid the
randomization procedure is, but the experience was not unlike my other
bricks-and-mortar gambling experiences; that is, I win some, lose some,
win a bit back, while slowly, but surely, see my bankroll shrink. After
losing about $17 US, I cashed out. As correctly noted by www.clubchance.com,
if the random number generator was biased, "An expert player could discover
the bias and spread the word, quickly breaking that casino's bank." Thus,
"it's in the casino's best interest to be as random and unbiased as possible."
Cashing out was also a two-step
process. I first cashed out from the casino and then from EzCash. Cashing
in was posted to my credit card immediately; however, cashing out took
another month. This delay is apparently due to the credit card company
trying to discourage credits, not to the on-line casino. I also found
that the customer service of the on-line casino responded quickly to my
inquiries.
If I had won more than I cashed
in for, I would have received a certified cheque. Cashing out at a bricks-and-mortar
casino is usually more difficult than cashing in. You have to wait in
line for a cashier. If you're down to your last few chips or tokens, you
may feel that it's hardly worth it and just gamble the rest away. In contrast,
cashing out at an on-line casino was actually less tedious than cashing
in, except for the one-month delay in getting my cash back.
I discovered something annoying
— when you exit the site another site automatically starts up. This
technique is also used by the porno industry (or so I've been told) to
keep customers on their sites. To get out of this loop, you need to close
the new site before it finishes loading up.
Over the next few weeks, I
received an average of one e-mail promotion every two days encouraging
me to return to that site or to try another site. Each letter gave instructions
about how to be removed from the list, but out of curiosity about the
promotions, I haven't asked to be removed yet. One message encouraged
me to go back to the site so that I could win a trip to Tahiti. Another
told me that I could win a bonus of $1000 if I bet $100 on a roulette
number. A recent message told me I could win a BMW and $100,000 in cash.
Many messages mentioned bonuses for cashing in or for referring people
to their on-line site. Another told me, "soon everyone would be a winner,
you could be next." The last time I checked, the opening banner on their
site read, "We've already paid out $61,313,471.93 (in prizes), you could
be next." That is, while researching and writing this paper the amount
had increased by $4 million.
The on-line industry is growing
rapidly. On-line gambling revenue (not counting day trading) was a $2
billion per year industry in 2000 and is projected to rise rapidly over
the next few years. However, the industry is worried about the possibility
of an Internet betting ban by the U.S. government. Several attempts have
been made to pass bills banning Internet gambling, but so far, none have
been passed. One bill tried to extend the (American) Federal Interstate
Wire Act to on-line gaming and make it illegal to bet on-line using a
credit card. Another attempted to ban all other types of banking instruments
for on-line gaming and to make it illegal to own shares in a company that
runs on-line casinos. One recent attempt was aimed at stopping money laundering,
which would have forced credit card companies to police transactions.
The Internet's betting-ban
amendment was removed before the anti-money laundering bill was passed.
Speakers at the Global Interactive Gaming Conference in Montreal (May
1012, 2000) seemed confident that a ban on Internet gambling would
be ignored and that the industry would continue to grow. But some speakers
noted that the ban would hurt the industry. They pointed out that currently
over half of the on-line gaming revenue around the world comes from the
United States. Meanwhile, the Nevada state government has taken steps
that may lead to legalizing and licensing Internet gambling in Nevada.
(More information about the Internet gambling industry can be obtained
at www.igamingnews.com.)
According to speakers at the
same conference (www.igamingnews.com), future casino banking might be
conducted by debit cards, e-cash, special Internet gaming cards or prepaid
telephone cards. Security may utilize fingerprint-recognition technology,
and mobile phones may become the most common way to place Internet bets.
On the plus side, on-line
gambling is more affordable than casino table games. However, on-line
gambling may offer a greater potential for incremental betting, which
could lead to problematic play. On-line gambling offers the potential
ability to monitor gamblers in order to detect problematic patterns of
play, such as incremental betting and frequent re-buy-ins, which could
then automatically trigger information about problem gambling. Currently,
however, no on-line casino does this, although Lasseter's On-line casino
in Australia offers self-selected daily betting limits. (For more about
the plus side of on-line gaming, you can go to www.clubchance.com and
look for their news, editorials and letters, or go to www.thewizardofodds.com
and look at their information on the basics of on-line gaming.)
Overall, I found that on-line
gambling was a reasonably enjoyable experience. Cheaper, but less exciting
than playing live. The greatest areas of concern from my point of view
are security, availability and protecting adolescents. No fraudulent charges
were made to my credit card, so my security fears have been resolved.
Availability is a more difficult
issue. On-line casinos are available from anywhere in the world, 24 hours
a day. The automatic loading of other sites and large amounts of promotional
e-mail could be particularly difficult for problem gamblers. Autolinks
could encourage a winner to try to win more, or a loser to try another
site to win it back, and e-mail ads could induce a relapse. Self-exclusion
policies are available at Lasseter's, and links to Gamblers Anonymous
and Net Nanny are available at some sites.
There are a number of gambling
related sites that provide information to prevent problems. For example,
www.professionalgambler.com sells information on the odds for various
teams, but it also provides a list of 10 ways to throw away your money
on sports bets. This list is designed to educate gamblers about bad betting
strategies (e.g., using betting systems). Currently, protection for minors
from these sites is inadequate. But the industry claims there is a greater
potential for security problems on the Web than in other gambling venues
because everyone is checked, and fake IDs are excluded (www.clubchance.com;
see also www.igamingnews.com).
However, it remains to be seen
if this will come to pass. For the time being, it is up to parents to
use blocking devices such as Net Nanny and to keep credit cards out of
their children's hands. Account names and passwords should also be kept
hidden. Parents and educators must teach adolescents about their real
chances of winning and dispel myths of "easy money" by showing how the
games are stacked against them.
References
- Room, R. Turner, N.E.
& Ialomiteanu, A. (1999).
- Community effects of the
opening of the Niagara Casino: A first report. Addiction, 94,
1449–1466.
- Rush, B.R., Shaw Moxam,
R. & Urbanoski, K.A. (2001).
- Characteristics of people
seeking help from specialized programs for the treatment of problem
gambling in Ontario (31 paragraphs). Electronic Journal of Gambling
Issues: eGambling, 6. Available:
http://www.camh.net/egambling/issue6/research/
- Thorp, E.O. (1962).
- Beat the Dealer: A Winning
Strategy for the Game of Twenty-One. New York: Vintage Books.
This account was not
peer-reviewed.
Submitted: May 18, 2000
Updated: November,
8, 2001
Accepted: November
12, 2001
Nigel Turner received
his doctorate in cognitive psychology from the University of Western
Ontario in 1995. He has worked at the Addiction Research Division of
the Centre for Addiction and Mental Health for the past five years where
he has developed psychometric tools to measure addiction processes.
He is currently focused on understanding the mental processes related
to gambling addiction. He has extensive experience in various research
methods including psychometrics, surveys, experimental studies, computer
simulations, interviews and focus groups. He has published numerous
papers in peer-reviewed journals, including several on problem gambling,
and he has made numerous conference presentations.
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