Gambling News by Gambling Headquarters

Despite the potentially negative impacts of a federal online gambling law, profits at Tyler Hancock's online poker Web site are almost back to where they were before the law passed in October. Hancock, an interdisciplinary studies senior, runs FuturePokerPros.com, which makes its money by taking a percentage of the winnings of each player it recruits for other online poker sites. Hancock said U.S. players dropped from 85 percent of his customers to 65 percent after they got kicked off sites where they had previously played. He has recruited more European and Canadian players to make up for the loss. "My big players are never going to quit playing poker no matter what happens," Hancock said. About 10 large online poker Web sites have stopped offering service to U.S. customers because the new law requires American financial institutions to block online gambling transactions, said Michael Bolcerek, president of the San Francisco-based Poker Players Alliance. U.S. customers represented between 60 percent and 75 percent of these sites' customers, he added. The companies can make up for the loss by expanding their operations in Asia and Europe, he said. Hancock said he will provide franchise Web sites to some of his top European and Canadian customers so they can help recruit other international players. These sites are identical to the original. In return, Hancock gets 15 percent of the profits from the franchises. Attracting new recruits won't be a problem, he added. "I'm getting new players just by playing poker," he said. Smaller, private companies like Hancock's are still serving U.S. customers while waiting to find out how the federal government decides to enforce the law, Bolcerek said. This means banks may not start actually blocking transactions until next July, nine months after the law was enacted, he added. Hancock said the law is unfair.

"It's a total invasion of freedom to do what we want as Americans," he said.

Banning online gambling is also counterproductive, said Keith Furlong, deputy director of the Vancouver, British Columbia-based Interactive Gaming Council.

"While the bill sponsors may have good intentions, they're not protecting consumers," Furlong said. "They have turned some of the most responsible, legitimate public companies out of the U.S. market."

Illicit companies could take their place, sparking the creation of the online equivalent of speakeasies, Bolcerek said.

This could lead to an increased amount of fraud and unsafe online-gambling transactions, he added.

The best way to deal with online gambling is by legally regulating it so it's safe for consumers and taxing it so it benefits the government, Bolcerek said.

The federal government could raise more than $3 billion in tax revenues annually from regulated online gambling, he said.

No matter what happens, Hancock said he hopes the online poker industry continues to thrive.