When someone from Hawai‘i wins a million dollar jackpot in Las Vegas, they’re treated like a hero by media, and especially the state Department of Taxation, who stand to gain a tidy sum. But back in May of 2002, when
When someone from Hawai‘i wins a million dollar jackpot in Las Vegas, they’re treated like a hero by media, and especially the state Department of Taxation, who stand to gain a tidy sum.
But back in May of 2002, when a Hawai‘i Internet gambler known only as “Moosed” drew a royal flush in an online poker game, he became a hunted animal.
Moosed never claimed his $176,688 winnings, and for good reason: Hawai‘i police and the Federal Bureau of Investigations, including international law enforcement, were ready to bag and book him.
What Moosed did was illegal, not just in Hawai‘i, but in every state in the union. Hawai‘i outlaws gambling in any form, whether you use the telephone, Internet or even in a friendly game at the local pub, if there’s money involved. Even more daunting, people like Moosed face a federal rap because they typically do their gambling on Internet servers based overseas. Moosed gambled with InterCasino. com, an Internet site based in the Caribbean island nation of Dominica. It was a direct violation of the Federal Wire Act of 1961. The Wire Act was created to prevent organized betting operations from using telephones or electronic methods. Today, entrepreneurs say the Wire Act is outdated and that it hinders the growth of bandwidth-hungry Internet businesses.
But the advent of the Internet has made the Wire Act nearly impossible to enforce, say local law enforcement officials. Indeed, Moosed would have gotten away with it had InterCasino. com not sent press releases to local media who, in turned, snitched to police. If they hadn’t, Moosed would have been mailed a fat check from the InterCasino. com accounting office in Toronto, Canada.
Nevada recently became the first state to directly challenge the Wire Act by legalizing online gambling for Nevadans playing on Nevada-based servers. The servers must remain within the state – where tax collectors can keep an eye on winnings. For Internet gambling entreprenuers, start-up costs alone could be prohibitive: Prices for Nevada online gaming licenses start at $500,000.
When Congress takes up the issue again, as it has for every year since 1999, it will have to deal with independent-minded states like Nevada and strike agreements with powerful brick-and-mortar casino lobbies in the 47 states where gambling is legal – most of whom don’t want online gambling unless the federal law protects them from outside competition. Enforcing those laws, however, will be tough because the thousands of online gaming Internet sites are typically based outside the U.S., beyond the reach of American law enforcement. They can’t take the servers and they can’t arrest the owners.
What they can do, however, poses problems for Internet users everywhere, including here in Hawai‘i. For example, credit card companies are being pressed to report online casino payments, and Moosed’s folly has put Hawai‘i law enforcement and the FBI on the alert. And the bureau is now utilizing the same electronic surveillance methods used to bust online kiddy pornographers and their customers, including monitoring Hawai‘i Internet service providers.
Hawai‘i residents love games of chance. And since they live in one of only three states to outlaw meat-space gambling, gaming on the Internet is a strong temptation, especially when even large, well-established Internet portals like Yahoo and Google allegedly accept advertisements from illegal Internet gambling sites.
They, along with others, were served with a class-action suit this summer in California Superior Court for allegedly allowing “pop-up” and banner ads from online casinos begging viewers to “click here.” But don’t do it, warn authorities: everything you type, every site you visit, can be tracked and the trail never disappears.
