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Gambling Web sites deal with federal ban

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.