Internet casinos may win if NCAA wagering ban OK’d

David Strow

Friday, Oct. 13, 2000 | 11:01 a.m.

An irony is becoming more obvious in the effort by Congress to curb both Internet gambling and sports betting in the United States.

The irony is that Internet casino operators will likely survive moves in Congress to outlaw their industry, and then go on to earn even greater profits if Congress passes a separate bill forcing Nevada casinos to stop taking wagers on NCAA sporting events.

Talk to Internet casino operators about the NCAA wagering prohibition bill, and you might think it should be renamed the "Internet Sports Book Support Act."

In their eyes, Congress will inadvertently help an industry it's trying to destroy.

"This move may backfire, because they may be sending me more customers," said Mark Blandford, managing director of Sportingbet.com, a British Internet sports book operating in the Channel Islands off England. "I think my shareholders would like to see it happen."

"It's silly to outlaw any kind of gambling, but if they did, our business would benefit from it," said Steve Schillinger, vice president of Antigua-based World Sports Exchange.

Naturally, the Internet doesn't become the only option for betting on college events if Nevada is forced out of the game. For traditionalists, there's always the quaint option of laying bets with a cigar-chomping bookie in a back alley, a friendly guy by the name of Guido, Lefty, Sammy and Weasel.

But at the dawn of the 21st Century, gaming observers say it's more likely they'll turn to the Internet, where they can place bets with established bookmakers from home. Besides, those bookies won't break your legs if you welsh on a bet, though they might rat you out to MasterCard.

In yet another irony, NCAA betting ban supporters say Nevada college sports betting must end because it has been tied to various point-shaving scandals. But would-be fixers of NCAA contests like football and basketball games may find it easier to succeed with college bets placed on the Internet, since U.S. law enforcement and NCAA agents have a difficult time monitoring what's going on at offshore cyber-casinos.

The foreign Internet bookies certainly wouldn't abide by a new plan in Nevada to prevent game-fixing by limiting bets to $550 per gambler per game. And Nevada Gaming Control Board agents, who are now monitoring sports book action in the state, have no way to pry into the affairs of non-Nevada Internet casinos.

For off-shore books, taking bets on action no Nevada casino can touch is old hat. Got a yen for politics? Blandford's giving 2/3 odds on a Gore win in November. Are you a die-hard Rebel wanting to lay some cash on UNLV? Sportingbet.com has them posted as a 7-point underdog against Colorado State. And at these books, an 18-year-old's money is as good as a 21-year-old's.

So is there anything they won't take bets on? Well, yes, Blandford says -- UK regulations prohibit betting on events where people can get killed, which eliminates wars and hostage situations. This rule was no doubt an annoyance in World War II, when more than a few patriotic Britons probably would have liked to bet a few quid against Hitler's legions.

However, Britons don't care much for betting on their own college teams. That's because college teams in Britain aren't generally considered a stepping stone to the pros, Blandford said.

"The first time I entered the U.S. market, I was shocked at the level of betting in college sports," Blandford said. "The top colleges are feeders to the pro games, so they're bound to generate interest.

"By definition, these are the pro players of tomorrow. So banning it isn't going to stop it."

Internet bookies might be a bit odd by U.S. bookmaking standards, but small they are not. Nevada books handled $2.5 billion in bets in 1999, but Internet gaming experts say on-line bettors wagered $14.3 billion in the same period.

College sports are estimated to be anywhere between 30 percent to 40 percent of total sports betting action. That leaves as much as $1 billion in annual college wagers waiting for some action if Congress lowers the boom.

"The vast majority of that business is going to move over to the Internet," said Sebastian Sinclair, vice president of Christiansen Capital Advisors. "And they're probably going to bet more when they get there, because Internet sites offer rebates and credits.

"College bettors used to betting with Station and Harrah's and Hilton are going to gravitate toward (large bookmakers operating on the Internet)."

That, of course, isn't legal under Nevada law. And if Internet gambling legislation passes Congress, Internet wagers will be illegal under federal law as well.

But the federal law would only penalizes operators, not players. And since the operators aren't based in the United States, they don't consider themselves beholden to the laws of this land.

"That is the law in the U.S.," Blandford said. "It's not the law in jurisdictions around the world, including the UK. We're licensed directly by the government ... and we are entitled to offer bets.

"This is the big difference between the U.S. prohibition approach and the rest of the world. You can ban something, but it doesn't stop it from happening."

Perhaps no one reflects that more than Schillinger. In 1998, he was one of 22 offshore gambling operators charged by the U.S. Attorney's Office in New York with violations of the federal Wire Act. So Schillinger's taken up residence in the Caribbean, wanted by the feds but continuing to book American bets.

After that experience, Schillinger more than sympathizes with Nevada's sports books, even if the federal government might soon be inadvertently sending him more business.

"I think they go way too far," Schillinger said. "It's hypocritical to ban sports betting, while at the same time all the states have lotteries that completely rip off people. They want to shut us down because they don't get any of that money."