Playing the Odds at Online Casinos

For some reason, you have $200 to burn. You found it in an old coat. Your fool brother-in-law paid you back for bailing him out of jail. It makes no difference--a windfall is a windfall. Now, in the privacy of your own home, at 1:15 in the morning, you check to make sure the wife and kids are asleep, hop onto the Internet and blow the 200 bucks on electronic blackjack. Congratulations. You have become a criminal.

Thanks to the ever-paternal U.S. government (motto: Have Fun--We Dare You), online gambling--a.k.a. nambling--is about to become illegal. Not illegal as in blowing up the Chrysler Building, but just illegal enough, the government hopes, to quash a burgeoning industry that will generate hundreds of millions of dollars in revenues by the end of this year. The man behind the buzz kill is Senator Jon Kyl (R-Ariz.). Kyl sponsored an amendment to outlaw gambling on the Internet, ostensibly to protect children from unregulated gaming. Unfortunately, the government doesn't discriminate, so neither children nor consenting adults will have access to Web casinos.

Or will they? The government has had a difficult time accepting the nature of the World Wide Web and expends copious amounts of energy trying to regulate something that can't be regulated. Of course, the feds mean well--sort of. Kids need protection from handguns more than they do from Internet gambling, but Kyl is strangely quiet on that subject. State legislatures have also targeted cybercasinos. Cynics will tell you that the government's real agenda has more to do with generating tax dollars. Every dollar gambled on the Web is potentially one less dollar that will be played on Powerball. And wait until the big names of American gambling--Harrah's, Caesars Palace, Hilton--decide to get into Internet gambling. They pay taxes and contribute to campaigns. If nambling is illegal now, don't expect it to stay that way for long.

So who are today's big winners when it comes to Internet gambling? Probably people like Warren Eugene. "It's a $10 billion-a-year cash cow just waiting for the guy with the milk bucket and warm hands," says Eugene, the 37-year-old founder of Internet Casinos Inc. and paterfamilias of a small but growing group of young gambling moguls. With a $5200 investment in August 1995, Eugene launched Internet Casinos (casino.org). He claimed his online gambling business took in more than $40 million in 1997. Eugene is just one of many young businessmen hoping, through nambling, to wrangle a percentage of the world's disposable income into his own bank account. Judging from the response so far, the world is receptive. Nor is he particularly worried about the Kyl bill or other legislation. "Casinos owned and operated offshore are untouchable," he says, adding that even if the bill passes, "you will be able to play comfortably at foreign-owned casino sites."

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Sure, sure. You're not a gambler. You drink milk. You go to the gym. You loved The Horse Whisperer. But when you finally decide to get in touch with your inner degenerate and give nambling a try, here's what to expect. First, you'll have to choose a casino. To help yourself wade through the slotsam and betsam of online casinos, find one of several casino clearinghouse Web pages, such as wheretobet.com, and choose from one of several dozen electronic dens of sin with names like Royal Flush, Super Craps and USA Jackpot.

Most casinos offer some or all of the games available in a real casino, including blackjack, craps, poker, roulette, keno, sports wagering and slots, so the difference between each site is slight and, ultimately, cosmetic. Graphics, sound and the casino's "theme" (Hollywood, jungle, medieval) are the only real hooks. Once you've settled on a casino, you'll most likely have to download software from the site. If you're living in the stone age and own a modem slower than 28.8, the download process will take approximately eight months, so you might want to order pizza and rent the director's cut of Gandhi while you wait. Those with a 28.8 modem will find download times in the much more manageable 15- to 30-minute range. Lucky sons of guns with 56K modems will be up and losing, er, winning money in less than ten minutes. Once the software transfer is complete, 99 percent of the casino's information, including graphics and sound, is stored on your computer's hard drive. Layouts are generally two-dimensional representations of standard gaming tables, and other graphics generally include the spin of the roulette wheel, the flip of the cards, the tumble of the dice and stacks of chips just waiting to be bet. The only data that need to be sent over the Net are the actual gambling data, that is, specific cards drawn, dice numbers rolled and money won or lost. This information, about two bytes' worth, takes less than 0.0007 of a second to transfer. Most cybercasinos, sad to say, are terribly cheesy. The graphics, often touted as "gorgeous" and "state-of-the-art," are actually basic and something a third grader could paint.

The only casino to actually make improvements on the traditional online casino design (if one year in existence a tradition makes) is First Live Casino (www.firstlive.com). This little beauty does its darndest to overcome notoriously slow Web video transfer and bring live dealers and gaming to your screen. Instead of two-dimensional representations (or unsatisfying, cartoon-like three-dimensional images) of rolling dice or spinning roulette wheels, First Live Casino uses actual dealers, dice, cards and wheels, and sends a video stream from its home base right to your computer. Unfortunately, First Live Casino is the exception. Most other cybercasinos, even decent ones such as Omni Casino (www.omnicasino.com), rely on lousy graphics, perhaps because obsessive gamblers are notoriously unconcerned with aesthetics.

If you ignore the interfaces, nambling is fairly satisfying. For the faint of heart or uninitiated, several sites offer "practice areas" that allow potential cardsharps and dice fixers to use fake cash to bone up on the games of their choice. Once comfortable with the rules and the interface, users can trade the fake cash for real money, which is when the fun begins. It's certainly when the palms start to sweat and Daddy locks the door to the study.

Typically, a nambler opens a real-cash account with a cybercasino by typing in basic background information and transmitting the form along with a deposit. You can do this with a major credit card or by wiring money via Western Union. In return, you get a personal ID number and a password that gives you access to your account and the ability to place bets 24 hours a day. Some sites promise to send couriers to deliver big payoffs, but in most cases, your winnings are sent to you or credited to your casino account or your credit card within 48 hours. Losses are deducted from your balance, and when you run out of money, you're free to charge additional "credits"--naturally--to your casino account.

Of all the games available online, only blackjack and sports wagering retain some of the feel of a real-life gambling experience. While the other games offer correct payouts and the same bets as actual casinos, nambling is a solitary experience. You sit in your robe (or, fine, naked), click on electronic "chips," wait for a decision to be reached and either win or lose money. There is no cheering or high-fiving when you roll an 11 at the craps table. No hugging of beautiful, elegant women sipping cosmopolitans, no slipping into your best James Bond impersonation when the roulette wheel stops on black 17. But blackjack, which is won or lost individually and usually in silence even in real casinos, feels complete. Sports wagering mimics a call to an actual bookie, though the tough-guy accent is absent and you don't have to cup the receiver so your idiot boss won't overhear. Also, sports nuts are allowed more varied wagers online than they are with most self-respecting bookies.

"My local guy offers straight meat-and-potatoes betting," says Steve, a New York metropolitan-area real estate agent in his 30s. "All I can bet on are games and total points. One hundred dollar minimum. That's if I can get the guy on the phone. The online books are open 24 hours and give lots of different propositions. Online bookies are also big on nontraditional events: Nascar racing and golf, for example.

There are, however, deeper and potentially profitable differences between actual casinos and cybercasinos. In space, no one can hear you scream; in cyberspace, no one can hear you not declare taxable income. At the Rio in Vegas, if you hit a $2000 jackpot on Double Down Slots, you'll be the proud owner of a crisp new W-4 federal income tax form as well. When nambling, it's up to you to report all winnings to the IRS. But you being the patriot you are, that's probably not even worth mentioning.

For card counters, nambling is as close as it gets to free money. With no pit boss to make you sweat and louse up the delicate electronics of the card counting microcomputer you have on your desk, you're free to use whatever unbeatable system you brag about to the boys on the unemployment line. Several cybercasinos, if they're not lying, even tout one-deck shoes that up your winning odds even further.

If they're not lying. But what if, horror of horrors, they are? Online gambling is presently unregulated by the federal government, so what's to stop the unscrupulous from rooking would-be rookers? Consider this: Last year, a San Antonio man named Tom Thompson started playing keno on a site called Funscape's Casino Royale. After he spent four months racking up losses, Thompson's ship came in--a one-day payoff of $193,728.40 on June 9, 1997. Thompson claims he received confirmation of his win, but the company denies it. Funscape even accused him of hacking its system. Thompson sued for triple damages, but, according to his lawyer, Charles Kaufmann, when the site moved offshore and the prospect of collecting his winnings became more problematic, Thompson settled for a fraction of his original claim. And the incident is not unusual. Take the Bobby-Ewing-in-the-shower-it-was-all-a-dream cautionary tale of the Cannons, a couple from Ohio. Sampling several online casinos, the husband-and-wife recreational gamblers stumbled upon a site they really liked called Fallon's, operating out of Panama. After two weeks of playing poker, slots and roulette at the casino's free practice area, the Cannons did well enough to think they'd be able to pay off $3000 in credit card debt using nothing but their computer and Lady Luck. If memory serves, that's how Cornelius Vanderbilt did it.

"We didn't know if it was legal in Ohio," the Cannons admitted. But they signed up to play with their Visa card, bet $25 on poker and lost. Two days later, they bet $50 and won. It took five days for the charges to show up on their credit card account, for a net gain of $25.

The Cannons started nambling a couple of hours a night at the Fallon's site, once even hitting a $2000 slots jackpot. After six weeks, they were up $400. But when they checked the balance on their Visa, which had a credit limit of $6000, the operator told them they owed more than $13,000. Visa had extended their credit limit as a courtesy without telling them. According to the Cannons' records, Fallon's had charged a single $50 loss to their account 71 times in a row. Not only that, but their winnings had been uncredited. Once, they won $250 and were credited $86. Another time, they won $500 and were credited $8.86. There was no telephone number or street address for Fallon's on its Web page, only this ominous sounding e-mail address: [email protected]. The Cannons' complaints brought a reply by e-mail promising that the situation would be resolved and explaining the monetary discrepancies in vague terms. Apparently, Fallon's' software program had been too sophisticated for its bank's computer system. "We don't want to give a definite date, but the bank's attorneys and ours will be meeting very shortly," said the e-mail.

The couple never heard from Fallon's again. All they had was meager proof--copies of the software files of the games they'd played. After another month, the Fallon's Web address no longer worked. Fortunately, Visa agreed to erase all of the Fallon's-related items--wins and losses--from the couple's credit card.(concluded on page 150)Online Casinos(continued from page 102)

All incipient technologies generate horror stories, and all the stories are, of course, 100 percent true. You know this because a cell phone gave your neighbor a brain tumor, a lady down the street dried her cat in the microwave and it exploded and tiny, cloud-dwelling gremlins are hell-bent on ripping the wings off commercial airliners. Glenn Barry, a pro-nambling columnist for the online magazine Rolling Good Times Online, says that if you lose money or there's a dispute while nambling, even "the damn Marines couldn't get your money back from a bookie in cyberspace." In fact, gloom-and-doom incidents are relatively rare. In a fine example of your government at work for you, a U.S. Senate Judiciary Subcommittee on Technology, Terrorism and Government Information was presented with little evidence of deception or corruption in the industry. Sue Schneider, editor of Rolling Good Times Online, says this is because "namblers use the Net to communicate with one another about unscrupulous sites. They have plenty of reputable sites to choose from." And, cybercasino mogul Eugene adds, "It's such a lucrative business that cheating customers is the least profitable strategy in the long run."

Actually, if you want to split hairs, the least profitable strategy is getting arrested and rotting in a federal prison while Spike from cell block D takes a shine to you and your pretty hair. The dreaded Kyl amendment has cybercasino proprietors wondering what they might look like in leg irons, singing Oklahoma! in the annual Leavenworth talent show. If passed, it will increase the breadth of 1961's Interstate Wire Act (which prohibits gambling over telephone lines) to include the Internet, satellite networks and other delivery systems. The legislation was part of a $33 billion spending bill for the Commerce, State and Justice Departments. And the feds apparently mean business: If the amendment is signed into law, anyone caught proffering online gambling would face up to four years in jail, a $20,000 fine or a fine of three times the amount accepted as wagers. But you, Common Man Gambler, can breathe fairly easy. Though the Kyl amendment would have you believe you could face a three-month jail term and a $500 fine for tossing the electronic dice, conventional wisdom says law enforcement officials have no intention of actually hauling a battering ram to your apartment complex and bursting in during a particularly rousing game of keno. They're gunning for the casino operators and have no solid plans to prosecute end users (as namblers and other Web denizens are affectionately known). But, for the record, this is conventional wisdom. If things take a turn for the worse, don't come running to us for bail money.

Even Kyl admitted over National Public Radio that enforcement is an uphill battle. For one thing, even if hundreds of Internet service providers are forced to pull the plug on operators, there are thousands more to which the online casinos can turn to stay available.

Kyl's other problem? The casinos themselves are far from his grasp. Prime real estate for cybercasinos is a cash-strapped country with a free-trade zone that offers minimum regulations and maximum anonymity. Eugene excluded countries such as Jamaica and the Bahamas ("overly close ties with the U.S.") and Dominica ("they wanted bribe money"). For a while, he settled on the former Dutch colony of St. Maarten. St. Maarten has no taxes on capital gains. Its government shuns outside scrutiny. And with vital income already pouring in from 12 land-based casinos, St. Maarten was open to expanding its gambling operations. He has since branched out to St. Vincent, Gibraltar and several European countries. Other cybercasino entrepreneurs are following Eugene's lead. Michael Simone, of Interactive Gaming and Communications Corp., set up shop on Grenada. And Jay Cohen of World Sports Exchange hung a shingle on Antigua, the Caribbean nation that's now home to dozens of Internet sports bookies ("beach bookies"). In addition to apparent safety, these islands also boast excellent snorkeling and killer coconut-rum drinks, just for the record.

But, as the saying goes, you can run and sip your killer coconut-rum drink while snorkeling, but you can't hide. In March, Attorney General Janet Reno declared her own jihad against Internet casinos, using the Interstate Wire Act to indict 21 Americans in absentia for running six offshore Internet sports books. Even though the six operations were offshore and had had no complaints from bettors, Reno claimed she had jurisdiction to charge them, pointing to the fact that all six had American-based branch offices. If convicted of federal felony charges, the accused face up to five years in prison and a fine of $250,000.

But realistically, Reno will have a hard time making her case stick. "The Caribbean islands have no extradition treaty with the U.S. and aren't about to comply and risk driving away their offshore businesses," assures Nancy Todd, a Florida-based gaming consultant. But the charges may scare away many Americans, even though the Justice Department has a kind of high-tech don't ask, don't tell policy against namblers. And though Justice did not, and has no plans to, formally charge any namblers this time, it is hoping the incident serves as a warning that nambling is considered illegal. Reno is also trying to strong-arm major U.S. telephone companies into discontinuing service, or risk being accused of aiding in crimes. At a recent press conference, she unholstered her verbal six-shooters and warned Internet casino owners, "You can't hide online, and you can't hide offshore."

Ah, but men such as Eugene have a plan. Should the U.S. government ultimately decide to outlaw nambling, they'll load their operations onto boats, sail in international waters and conduct business as usual. Even if a fraction of Eugene's regular cybercasino patrons decide to follow him to the high seas, nambling will thrive, having run an end around on Kyl, Reno and the Justice Department. Will it happen this way? Will nambling have to hide in plain sight? Who knows? But feel free to dial up your favorite online bookie and bet for or against it. Operators are standing by.

Your Guide to Cybercasinos the winners and losers, and everything else you need to know

If you're lucky, a cybercasino might bankroll little Brittany's college education. If you're unlucky, it'll cost you six figures in credit card debt and land you in the slammer and your wife will leave you for a personal trainer named Nick. We can't keep you from losing or being cheated (or getting a visit from the Swat-team), but we can keep you from being bored. For your nambling pleasure, here is a list of our favorite cybercasinos, and of sites to avoid.

Best Casino Clearinghouse Sites wheretobet.com

Excellent clearinghouse site that offers hot links to the top 100 userranked sites for all betting categories, including sports book, poker, gambling news and information, and horse and sports handicapping. The directory includes brief descriptions of the casino or site with pertinent information such as free-play availability, download times, country of origin and how money transactions work.

gambling-links.com

A terrific listings site which offers reviews of cybercasinos and nambling-related sites, such as news wires, handicapping tipsters and, yes, even Rolling Good Times Online.

Best Practice Sites

Internet Casino (casino.org)

Warren Eugene's brainchild and the original cybercasino offers an easily accessed practice mode for all its games. It also boasts the coolest welcome sequence of any online casino: a first-person, Doom-like walk through the halls of a virtual casino.

Omni Casino (omnicasino.com)

A terrific practice site. Easy download, interface and playability. Full range of practice games includes craps, baccarat, blackjack, slots and others.

Sites to Rvoid

gambling-web.com/playhere.htm

Ostensibly a casino clearinghouse site, this beauty of a marketing tool lists nearly a dozen casinos, which, upon closer inspection, are all run by the same company. The themes are different, but the gaming's the same. Not a horrible site, but if you're looking for casino variety--and when you're perusing a clearinghouse Web page, you are--this isn't for you.

Safari Casino (safari-casino.com)

A site we'd normally recommend. The graphics are sweet, the music is sufficiently jungle-like, the interface is easy and it offers a swell practice mode. Safari Casino says a percentage of all profits helps fight wildlife extinction, and even offers a contest to win a free safari--basically ploys to make you feel better while acting like a pathetic loner in your living room. The problem? Because Safari has been spooked by recent Justice Department developments, American namblers are allowed to gamble only in practice mode.

Our Favorites

First Live Casino (firstlive.com)

Cool video streaming. Nearest thing to actual casino gambling on the Web.

The Gaming Club (gamingclub.com)

Nice graphics, good sound, solid gameplay.

Omni Casino (omnicasino.com)

An all-around great gambling site.

Internet Casino (casino.org)

Good variety, practice mode and good gaming.