Some members of Congress think that the solution to the Internet gambling “problem”is to pass enforcement of a ban onto banks. The banks, understandably, have a different take. From the WSJ:

A group representing 5,000 small banks is opposing a tool lawmakers hope to use to stop illegal online gambling, posing a challenge to what is widely seen as the government’s best shot at cracking down on the activity.

The Independent Community Bankers of America, whose members range from New York’s Metropolitan National Bank to Colorado’s First National Bank of Las Animas, is objecting to a proposal winding its way through Congress that would require financial institutions to block payments between U.S. residents and online casinos. The group fears enforcement would be burdensome – if not impossible – given the way the transactions are processed.

At issue are the electronic transfers that many gamblers use to move money between their bank accounts and offshore casinos. Such transfers, which often go through a third-party payment company, are the lifeblood of the online gambling industry. (Another aspect of the legislation, which the banking group doesn’t oppose, would formalize a ban on using credit cards to fund accounts. Many banks began voluntarily blocking such transactions five years ago, at the request of regulators.)

“It’s very tempting to think the banking industry can stop this kind of stuff because people pay for it through banks, but the fact is the system just wasn’t really designed to do it,” says Steve Verdier, a lobbyist for the ICBA, based in Washington. The group is asking the Senate, which will return from recess next week, to revise a House of Representatives version of the bill that passed in July.

The group says that, unlike credit-card payments, the electronic transfers aren’t coded to show what type of business is on the receiving end. They argue the existing system used to process such payments would require a massive – and costly – overhaul to allow banks to identify transactions with online casinos amid the flood of other electronic payments that banks handle each day. The system used by the casinos is the same one used for a multitude of transactions, including direct deposits of paychecks and automated payments to utility companies.

What’s more, some gamblers use physical checks to move money into gambling accounts or receive winnings. The proposed law could require banks to block those transactions, too, though banks say they have no system in place to do so.

Lawmakers have been debating for years about how to rein in offshore Internet casinos, which generated about $12 billion in revenue last year, with about half coming from Americans, according to gambling-industry research firm Christiansen Capital Advisors. Those efforts have gained momentum in recent months. In July, federal authorities arrested the chief executive of Costa Rica-based BetOnSports Plc as he changed planes in Texas during an international flight, and charged him and 10 others involved with the company with racketeering and fraud for taking bets from Americans.

The Justice Department contends the 1961 Wire Act and other federal laws make it illegal for businesses to take bets over the Web from U.S. residents. Previous congressional efforts to pass an explicit ban of online gambling have stalled, in part, because of questions about enforcement. The new measure gained steam this year, in part, as Republicans sought to distance themselves from the scandal surrounding Jack Abramoff, the lobbyist who helped kill an Internet gambling ban in 2000.

“It’s the only approach I know of that has a hope of making a significant dent in Internet gambling,” Rep. Jim Leach (R., Iowa), co-sponsor of the proposed Internet Gambling Prohibition and Enforcement Act, says of the effort to block money transfers. He acknowledges that the law would require greater regulation of the banking industry, but points to a provision that directs the Federal Reserve and the Treasury to come up with an implementation plan that wouldn’t be overly burdensome for banks.

WSJ.com – Banks Balk at Congressional Plan To Cut Off Cash From Net Casinos

If you have read Cutting the Wire, you’ll anticipate what I’m going to say next: this is history repeating itself, except that this time it’s banks, not communications companies, who are balking at policing the wires. I talk about this in chapter three, “Camleot Strikes Back.” Anyway, it just seems to me that this battle has already been fought–and lost. If the act of placing a bet is not criminal, it is very difficult to enforce a prohibition against gambling, or to effectively outlaw the business of gambling.

State gaming police recently busted up a Nevada slot cheating team. From the LVRJ:

In 1979, Michael Joseph Balsamo was arrested on charges of cheating at gambling. Since then, he has racked up 25 investigations and six convictions and has been listed in Nevada’s Black Book of Excluded Persons.

Add another charge to the list.

Now 47, Balsamo has been indicted by a grand jury on several counts of manufacturing and possessing a cheating device.

This time, gaming enforcement officials allege, he had some help from his family, working with his wife, stepson and mother-in-law to cheat slot machines in Clark County

His wife, Stephanie, 45, mother-in-law, Lavonna Wallace, 68, and stepson, Derrick Bowman, 24, were booked into the Clark County Detention Center this month on the charges.

Jerry Markling, chief of enforcement for the Nevada Gaming Control Board, said gaming investigators, with Las Vegas police, have been investigating Michael Balsamo and his group for more than a year.

Investigators think the suspects used a “light optic” device to trick slot machines into paying more coins than they should when players win.

reviewjournal.com — News – Investigators say they’ve broken slot cheating ring that was family affair

While this story is notable in and of itself, I’ve posted it because your humble correspondent himself was quoted. People who know me won’t be too surprised:

Dave Schwartz, director of the Center for Gambling Research at the University of Nevada, Las Vegas, said slot cheating has advanced from the days when cheaters, known as “sluggers,” would use yo-yo coins with a string on them to keep playing.

Schwartz said many cheaters buy slot machines or attend gaming conventions for research. He said slot cheaters respond to new technology by being more creative. He said that even if every casino puts in the newest technology, criminals still will try to use counterfeit money or tickets to cheat the machines.

“Until they develop slot machines that work purely in mental thought — telepathy — they won’t be able to stop all of the cheating,” he said. “Even then, I’m sure (criminals would) find a way to cheat.”

The idea of telepathic slot machines sounds pretty goofy, I know, but I’ve been reading a bit about developing technologies, particularly the GRIN (genetics, robotics, information tech, and nanotechnology) arc. It’s entirely possible that computers will begin to interact with people by reading eye movements and other things in ways that will seem telepathic.

What I was trying to say was that, as long as there is some kind of physical interface, be it coin, cash, or ticket, there is a potential for cheating. I don’t think you will find any casino security expert (or for that matter anyone who’s ever been inside a casino) that will disagree.

For what I’m talking about–the currency/machine interface–a more apt scenario might have been biometrics. Let’s say that, instead of cash or tickets, you have a smart card with all of your financial info on it. To use it, you don’t use a password but your own biometric data–let’s say a retinal scan. It’d seem pretty hard to spoof (well, unless you’ve seen spy movies), but slot cheats would find a way, probably five minutes after the first machines started their 90-day live trial.

Another note–I don’t believe I said the cheaters were called “sluggers,” but that they used low-tech methods like fake coins (slugs) or yo-yos. I’ve got to admit that if I was still working casino security, it would be fun to walk up to a suspected slot cheat and say, “Drop the fiber optic tool, slugger!”

People like to bet on strange stuff, and people like it bet online. From the

Desert Sun:

When it comes to online gambling, anything is fair game.

If they’re not playing the odds on the next American Idol or another Britney Spears’ divorce, Internet gamblers may wager on the chances of bird flu reaching the United States or who officials will find first: Jimmy Hoffa or Osama Bin Laden.

“We call it pop culture gambling,” said Christopher Bennett, a spokesman for BetUS.com. “This is quickly becoming the new office lottery pool.”

Gambling is one of the oldest pastimes on the planet – dating back to rolling of knucklebones during prehistoric times and the “casting of lots” in biblical times.

But the Internet has made gambling so easy that people can bet on just about anything at the click of a mouse, from sports to pop culture to politics.

Lawmakers in Washington want to clamp down on online gambling, but industry experts say it’s doubtful that even an act of Congress would be able to keep Americans from seeking out Lady Luck on the Internet.

“It’s definitely popular,” said David Schwartz, who runs the Center for Gaming Research at the University of Nevada at Las Vegas. “In general, commerce is moving online and gambling is part of that.”

Sports – from football to auto racing to golf – remains one of the most popular subjects among Internet bettors. But gamblers are increasingly interested in wagering on current events and politics as well.

A few months ago, BetUS asked people to bet on whether the world would end on June 6, 2006 – the sixth day of the sixth month of the sixth year of this century.

Thousands bet it would.

thedesertsun.com | Gambling on pop culture winning bet?

You would be a fool to bet ON the world ending, because if you won, you couldn’t collect. I suppose you’d have a few seconds of satisfaction as the planet disintegrated and its atmosphere boiled off into space, but you’d never see a return.

According to astronomers, the world will definitely end in 5 billion years when the sun stops converting hydrogen into helium and starts fusing helium into carbon. It’ll become a red giant and fry Mercury, Venus, and this island Earth along the way. Don’t bother getting any last bets down, because there won’t be anyone to pay you off.

Of course, by that time humanity (if it hasn’t already destroyed itself) should have already mastered interstellar travel, so we might be sitting pretty in another star system by then. On the other hand, given evolution and all that, humanity might not exist as we know it, either. But whatever species is around will probably be betting on something.