Isle residents avoid gambling laws with online wagers
Thousands of miles from the nearest casino, in a state where gambling is illegal, many Hawaii residents are wagering thousands of dollars in poker tournaments and other games without getting arrested.
And they are doing it from the comfort of their homes, where many have high-speed access to the world's largest casino: the World Wide Web. Money flowing in and out of thousands of gambling sites on the Internet is expected to reach $15 billion this year.
Hawaii is one of six states that outlaw online gambling but do little to enforce the law. The others are Illinois, Louisiana, Michigan, Oregon and South Dakota.
While gambling arrests in the islands are up, with 205 arrests so far this year for mostly clandestine casinos and cockfighting, Honolulu police have yet to charge anyone for betting online at Internet casinos, which is a misdemeanor.
In fact, according to California law professor Nelson Rose, who tracks online gambling laws, only one person has ever been charged in the United States for online gambling.
In 2003, Jeffrey Trauman, a North Dakota car salesman for Saturn, was arrested for winning some $300,000 in online betting in a state where the law allows for no more than $500 in winnings, said Rose, of Whittier College School of Law in Costa Mesa, Calif.
Because Internet gambling is viewed as a "victimless crime," federal and state police have little incentive to raid people's homes, Rose said.
"If this were kiddie porn we were talking about, it would be closed down immediately," he said.
Honolulu police Lt. Walter Ozeki, who heads a gambling detail, said, "Unless we get a complaint specifically regarding Internet gambling, it is very unlikely that we would investigate it. It is a very difficult type of investigation to launch."
Internet gamblers interviewed in Hawaii declined to be named because the practice is illegal, though it is not difficult to spot local players online with screen names like "Hawaiian Boy" or "Oahu Steve."
Philip K. of Gamblers Anonymous International said online casinos are claiming more victims of compulsive gambling, a problem he estimates affects some 18 million people in the United States, some as young as 15.
"They hear about unknown people who sat in at a multimillion-dollar contest and they won the contest -- people who were not professional," said Philip, himself a 25-year recovering gambling addict from the San Fernando Valley in California. "They get sucked in with their ATM cards."
In addition to the states that outlaw online gambling, attorneys general in Minnesota, Missouri, New Jersey, New York and Wisconsin have pledged to stop the practice through existing laws, according to the American Gaming Association, a Washington, D.C., group representing the casino entertainment industry.
But industry analysts believe efforts to crack down on Internet gambling are just a big bluff, saying gambling laws are vague and outdated.
"I've looked at all the states," said Joe Kelly, a professor of business law at the State University of New York at Buffalo. "These laws are unenforceable."
Whatever the reason, the laws are not stopping thousands of Americans from flocking to Internet casinos with hopes of winning big bucks in an multibillion-dollar unsupervised industry.
Americans make up about 65 percent of the world's Internet gambling market, with 580,000 people age 14-22 considered regular Internet gamblers, according to a 2005 survey by the Annenberg Public Policy Center that examined card playing and Internet gambling among young people.
At the federal level, gambling laws send a mixed message.
The U.S. Department of Justice says the 1961 Wire Act that prohibited betting on horse racing over phone lines applies to Internet wagering. But the 5th U.S. Circuit Court of Appeals ruled in 2002 that the Wire Act is confined to sports betting, said Frank Fahrenkopf, the American Gaming Association's chief executive.
Bills calling for an outright ban on Internet gambling transactions have failed because lobbyists fear it could implicate horse race betting as well as casinos set up by American Indian tribes. Many also doubt whether technology to properly oversee the sites even exists.
Fahrenkopf said he would like to see better control of Internet gaming to assure that it is fair and legal.
"There's no question in law enforcement's minds that there's money laundering going on offshore," Fahrenkopf said of the gaming sites, all of which are based abroad, mostly in the Caribbean. "Some of them are being run by crooks; when people are winning money, they can never collect it."
Police, however, say it is not their job to go after foreign Internet casino operators.
"We don't have any reach there anyway, so there's not a whole lot of point in investigating it," said FBI special agent Charles Goodwill, who heads the agency's operations in Hawaii.
Meanwhile, the online gambling industry is thriving.
In 1996, when lawmakers first sought to control the industry, 30 sites received bets totaling $30 million.
By 2010 it is expected to reach $18.4 billion.
A Google search for "online casino" returns nearly 10 million hits. The glittery sites -- offering everything from blackjack to poker to roulette and slots -- also have pop-up windows luring visitors with tempting deals of instant cash. One site claims 20 million downloads since 1997.