Money Down a Cyber-Hole

Like risks? Let’s examine online gambling, which qualifies as one of the dumbest things you can do with a credit card. Let’s also take a hard look at some bills in Congress that proponents say are designed to thwart online gambling but which, in fact, would provide a very lucrative boost to the horse racing industry. In online betting, you might as well throw your cash and credit cards on the sidewalk. Odds are they’ll be gone in a flash.

Internet betting is particularly pernicious. The gimmick is what’s called advance deposit wagering. You agree to let some fly-by-night company dock your credit card for, say, $250 and you are then allowed to gamble on anything from card games to sports events. What the heck, they already have your money.

Win small and you have a chance to get a payoff, maybe in a week or two. Win big and the chances increase that the online Web site will simply disappear and not pay you at all. Want to stop before you lose the whole $250? Well, there’s a chance that you may get the rest of your deposit back. Just a chance.

Most online gambling operates from offshore havens like Antigua, the Dominican Republic and islands in the English Channel. That leaves the bettor with little recourse to pop over and see what’s happened to that bundle.

Online gambling is already illegal in most states, and Gov. Gray Davis is likely to veto legislative attempts at expanding any kind of gambling in California.

Online betting may also be prohibited by the federal Wire Act of 1961, which made it a crime to bet on sports by wire or by telephone.

Bills on Capitol Hill, put forth by Sen. Jon Kyl (R-Ariz.) and Reps. Bob Goodlatte (R-Va.) and Frank A. LoBiondo (R-N.J.), would prohibit all forms of online gambling except horse racing, a dubious moral distinction. The bills also would require federal authorities to track down online gambling sites, seek court orders against them and expect Internet service providers such as EarthLink and AOL to block access to potential customers. But that’s an impossible assignment, given that even the best Web search engines can cover only a fraction of the Internet’s huge offerings.

Under attack by authorities, the gambling sites can just change their addresses. And if U.S. bettors are stymied, they could simply switch to foreign Internet providers to get to gambling sites. A Justice Department analysis called Kyl’s bill “unnecessary and unwise,” and the latter is surely true.

What you do with your money is, of course, your choice. Ultimately, the consumer bears the responsibility. But the only real question here is how long it takes to understand that online wagering is a fixed game that you can’t win.