THE OREGONIAN: New law is little risk for online gamblers

[Louis Cypher]

Sunday, October 29, 2006
ALEX PULASKI
The Oregonian

Peter Dumdeang's voice rose above the TV patter in a bare-walled East Portland apartment, his insistence interrupting two other men who, like him, appeared hypnotized by their laptops.

Things were desperate. Down to his last chips Thursday in an Internet poker tourney, Dumdeang needed one of two cards to survive. "C'mon, eight," he pleaded. "Eight of hearts on the river."

The river -- the last face-up card in the most popular poker game, Texas hold 'em -- flashed on his screen. Bingo: eight of hearts. High fives erupted, and chips neatly marched into his on-screen stack.

Fortune delivered on that hand, but Dumdeang and millions of other online gamblers across the nation remain wondering whether their luck is finally running dry. President Bush signed a law Oct. 13 aimed at cutting off the flow of money to online casinos based offshore. The law doesn't expressly outlaw Internet gambling, but it sets civil and criminal penalties -- as long as five years in prison -- for transmitting funds between online gambling sites and institutions, such as bank and credit-card companies.

In Oregon and across the country, poker players continue to play online despite the law, which federal authorities say they are unsure how to enforce. In many cases, players use online third-party financial sites based overseas to move money between U.S. bank accounts and gambling sites.

The largest online poker site, PartyPoker.com, immediately suspended play for money by Americans when the law took effect, and the company's stock nose-dived. Some other sites followed suit.

But dozens of online gambling sites are keeping their arms wide open to U.S. players, at least as long as rules to apply the law are being drafted during the next nine months.

FullTiltPoker.com's Web site assured players: "We're here to stay!"

Another popular site, PokerStars.com, told players it had "received extensive expert advice from within and outside the U.S. which concluded that these provisions do not alter the U.S. legal situation with respect to our offering of online poker games . . . the act does not in any way prohibit you from playing online poker."

Dumdeang, 29, was playing last week on PokerStars.com with friends Armando Valdez, 28, and Justin Thompson, 28.

Like other Oregon online poker players from Hillsboro to Medford to Bend, they view the new law as unfair and unenforceable.

"Why would the federal government care?" said Jim Burch, 47, a Portland electrician who started playing online a year ago while recovering from a serious auto accident. "The only reason that comes to my mind is revenue. Isn't that what makes it all go around?"

"Where this is headed"

Estimates on annual worldwide profits from online gambling range from $12 billion to $15 billion, about half of which is supplied by U.S. players. Dumdeang and some other players said regulating and taxing online gambling make more sense than trying to outlaw it.

"I'm sure that's where this is headed," he said. "Why should all these offshore sites make billions and billions?"

In Oregon, how the new federal law will be enforced remains unclear.

Kent Robinson, chief of the criminal division of the U.S. attorney's office in Portland, said, "We have not determined whether or under what circumstances we would ever want to bring a prosecution, particularly against an individual."

Stephanie Soden, a spokeswoman for Oregon's attorney general, said online gambling already is illegal. A 2001 state law similar to the new federal statute made it a felony for Internet gambling businesses to accept funds, but the law does not prohibit individuals from gambling online.

Soden said she has heard of no individual in Oregon being prosecuted for online gambling, but she maintains that the "only legal gambling in Oregon is the state lottery, tribal gaming or charitable fundraising." Other legal gambling in Oregon includes pari-mutuel betting at horse races.

Gamblers as victims

Josh Marquis, district attorney for Clatsop County, said prosecutors are more likely to see gamblers as victims than criminals.

"The intent of this new law is to shut down illegal offshore gambling," he said. "As a practical matter, do I see Oregon prosecutors clamping down on people who are placing bets? No."

The state of Washington took tough measures against online gambling this year, making it a felony in June. The state said gamblers risk jail time if convicted, but it has indicated it would focus enforcement on gambling sites and service providers rather than individuals.

Although poker's popularity has mushroomed in recent years through the Internet and television, nobody knows how many online players live in Oregon.

Thomas L. Moore, a Wilsonville researcher who conducted a 2006 gambling survey partly funded by the state, found that only 1.7 percent of adults surveyed had played games of chance online in the past year. That represented a mere fraction of the 64.5 percent of Oregon adults who said they gambled in some form in the past year.

Nevertheless, authorities on gambling addiction say online gambling -- video crack, as some players call it -- can trap individuals because it is easily accessible and isolating. It is also very popular with college students who can run up huge credit-card bills or drain financial-aid accounts.

Jeff Marotta, problem gambling services manager in the Oregon Department of Human Services, said the new law appears hard to enforce. He also said gamblers are adept at avoiding hurdles.

But in general, Marotta said, constructing barriers can help the uninitiated from developing gambling habits.

Too late for the crowd in Valdez's apartment. He is online every day, joining players from Vietnam to Scotland and Houston to Maine.

"If it's illegal in Oregon," said Valdez, his eyes fixed on the computer screen, "I'm going to have to move to Canada or Mexico."

Alex Pulaski, 503-221-8516; alexpulaski@news.oregonian.com