INTERNET GAMBLING : LAPD BATTLES ODDS ON LINE.Byline: P.J. Huffstutter Daily News Staff Writer Rain drips through the cracked window panes that line the Los Angeles Los Angeles (lôs ăn`jələs, lŏs, ăn`jəlēz'), city (1990 pop. 3,485,398), seat of Los Angeles co., S Calif.; inc. 1850. offices of Internet Broadcast Systems Inc. Half the lights are out, and the gray carpet still shows stains from the building's previous tenants. Photographs of porn stars decorate the walls, a tribute to the power of silicone, bleach and wax. High-priced niceties ni·ce·ty n. pl. ni·ce·ties 1. The quality of showing or requiring careful, precise treatment: the nicety of a diplomatic exchange. 2. aren't needed at IBS's real-world offices, insists company President Michael Meyer. Instead, the staff spends its millions on computer hardware and technology gurus in its pursuit to build virtual casinos. ``Gambling's not legal here, but it is legal elsewhere,'' Meyer said. ``The Internet will let us tap into this market.'' Federal law prohibits gambling over the wires, but it remains a largely unenforced arena for one simple reason: The industry is too young for its participants - or the police - to know exactly what's legal and what's not. Though controlled by federal law and state regulations, the decision to allow gambling facilities is made on the local level. So when on-line casino companies like IBS IBS Irritable bowel syndrome, see there began opening administrative offices in Southern California Southern California, also colloquially known as SoCal, is the southern portion of the U.S. state of California. Centered on the cities of Los Angeles and San Diego, Southern California is home to nearly 24 million people and is the nation's second most populated region, , the Los Angeles Police Department "LAPD" and "L.A.P.D." redirect here. For other uses, see LAPD (disambiguation).  This article or section is written like an . added an on-line facet to its gaming team's regular workload. Inside a nondescript non·de·script adj. Lacking distinctive qualities; having no individual character or form: "This expression gave temporary meaning to a set of features otherwise nondescript" building situated in the middle of downtown, the LAPD's administrative Vice Division tries to follow these start-up electronic casinos. Often, they find their authority limited by jurisdictional issues and lack of technical expertise. The officers, though gaming experts, are computer novices. Everyone shares one computer with a very slow modem. Nearby sits a bookshelf crammed with Internet guide books. No book spines have been cracked. There is no money to conduct undercover investigations, no money to open fictitious on-line bank accounts, nothing to spend playing electronic craps craps: see dice. craps Gambling game in which each player in turn throws two dice, attempting to roll a winning combination. The term derives from a Louisiana French word, crabs, which means “losing throw. or baccarat baccarat (bä`kərä', băk`–, Fr. bäkärä`), French card game formerly widely played in European casinos but now supplanted in popularity by chemin de fer. . In two years, they've made no arrests - and neither has anyone else. The officers insist they can't do their jobs and can't track these businesses. They hesitate to discuss the issue because, says one lieutenant, ``if the gaming and bookmaking bookmaking Gambling practice of determining odds and receiving and paying off bets on the outcome of sporting events and other competitions. Horse racing is perhaps most closely associated with bookmaking, but boxing, baseball, football, basketball, and other sports have criminal community find out how ill-equipped we are, they'll jump into this.'' In concept, gambling on line sounds easy for players and incredibly lucrative for operators. For the company, there are no dealers to pay, no plaster-and-stucco casinos to build, no state regulations to follow and no local taxes to pay. More than 600 gambling-related sites flourish on the World Wide Web, according to Rolling Good Times Online, an Internet-based gaming magazine. But only a dozen or so offer actual electronic betting. Most are built the same way: Basing their administrative offices in the United States, they form a joint agreement with an offshore financial institution and a gambling center. IBS, though still in its research and development phase, is negotiating with a bank in Belize and a casino in Costa Rica. World Wide Web Casinos, with offices in Orange County, owns a tiny casino - with an extensive computer network - on the Caribbean island of Antigua. Internet Gaming Technologies Inc., located in San Diego, uses a gambling license from Ecuador. ``Our technology will let people bet on the smallest thing,'' said IBS' Meyer, whose company also runs an on-line female strip show and several live concert cyber-casts. ``We'll have it set up so you can bet on the outcome of a single pitch.'' In theory, say on-line casino owners, a legal loophole protects them: If the computers handling the gambling are physically located offshore, the electronic transactions fall outside U.S. jurisdiction. Many firms, including IBS and World Wide Web Casinos, insist they exclude U.S. consumers by blocking incoming calls from American-based Internet service providers Internet service provider (ISP) Company that provides Internet connections and services to individuals and organizations. For a monthly fee, ISPs provide computer users with a connection to their site (see data transmission), as well as a log-in name and password. . ``We have no desire to be anyone's test case in court,'' Meyer said. ``We want to be known for superior technology, not superior litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. .'' Computer engineers contend that eager consumers can easily circumnavigate cir·cum·nav·i·gate tr.v. cir·cum·nav·i·gat·ed, cir·cum·nav·i·gat·ing, cir·cum·nav·i·gates 1. To proceed completely around: circumnavigating the earth. 2. the restrictions. ``The idea that you could block out just people from the U.S. is absurd,'' said Peter Neumann, principal computer scientist at SRI International, a not-for-profit think tank in Menlo Park, Calif. Neumann points out that users could access the casinos via another machine outside the U.S. Or they could tap an anonymous server that would make it appear that the American consumers are coming from someplace some·place adv. & n. Somewhere: "I didn't care where I was from so long as it was someplace else" Garrison Keillor. See Usage Note at everyplace. else. ``We don't know Don't know (DK, DKed) "Don't know the trade." A Street expression used whenever one party lacks knowledge of a trade or receives conflicting instructions from the other party. where these (electronic) gaming companies are,'' said Detective Doug Monteith mon·teith n. A large punch bowl having a notched rim on which cups can be hung. [Possibly after Monteith (Monteigh), an eccentric 17th-century Scotsman who wore a cloak scalloped at the hem.] , who works in the LAPD's Vice Division. ``We can't find them. If they say they're based in Bora Bora, but they're really in an office building down the street, how are we supposed to know the difference?'' One possibility is to turn on the radio. XTRA XTRA Extra XTRA X-band Thin Radar Aperture (US DoD) XTRA Xml Transaction Architecture Sports (690), an all-sports AM radio station in Southern California, began running ads promoting electronic offshore gaming companies in October, said general sales manager Peter Moore. Some of the firms focus on phone transactions, while others incorporate Internet-based gaming. Though heavily regulated, legal gambling in California pays out millions of dollars, particularly in taxes to local municipalities. In 1996, the Normandie Club gave the city of Gardena 15.5 percent of its annual revenue - nearly $4.16 million. The Commerce Club paid out about 13 percent, or $13.5 million. And in the first month of operation, Crystal Park handed over 10.9 percent of its profits, amounting to $320,000. ``We really rely on that money, which goes into our general fund,'' said Tom Bachman, director of finance for the city of Commerce. ``It makes up about 40 percent of our annual budget. It's more than we make on sales tax sales tax, levy on the sale of goods or services, generally calculated as a percentage of the selling price, and sometimes called a purchase tax. It is usually collected in the form of an extra charge by the retailer, who remits the tax to the government. .'' Which brings up an interesting legal conundrum. The Internet eradicates the traditional concepts of geographic boundaries, so it is unclear where the physical act of on-line gambling takes place. At the casino? The bank? The company's computer center? The consumer's hard drive? ``If we're not based in the U.S., they can't tax the gambling, and they can't regulate it,'' Meyer said. ``It's all about money, and the government wants it. That's why they're upset.'' Not so, counters Los Angeles Assistant City Attorney Ed Fimbres. He said governments are worried that their citizens are being fleeced by crooked companies. ``Gambling is regulated, in part, to keep out organized crime,'' Fimbres said. ``These companies aren't Vegas or Atlantic City. They are nowhere. How can you trust nowhere?'' Federal law prohibits the transmission of wagering information by wire - and that includes the Internet, according to Matt Ross, a spokesman for the state Attorney General's Office. But so far, nearly everyone has avoided tackling this legal issue in court. ``We're leery of the Internet gambling situation, but we're not doing anything about it,'' Ross admitted. The Minnesota Attorney General's Office plans to clarify the matter. In 1995, the state filed a consumer fraud action against Kerry Rogers, a principal of the Las Vegas-based on-line gaming company WagerNet. The state claims the service improperly advertises itself as a legal venture, said Carolyn Ham, assistant state attorney general. The Minnesota Supreme Court The Minnesota Supreme Court is the highest court in the U.S. state of Minnesota and consists of seven members. The court was first assembled as a three-judge panel in 1849 when Minnesota was still a territory. has yet to rule whether the Attorney General's Office has jurisdiction. A decision is expected by late this summer. ``I realize there's not a lot of money in on-line gambling yet, but that doesn't matter,'' Ham said. ``The problem is everyone's just waiting, and no one is doing anything. We've had conversations with the Justice Department, with the local FBI and with state investigators. So far, nothing. When there's a vacuum, sometimes you have to step in and fill it.'' State has limited casino action In California, two types of casino gambling are allowed - bingo and nonbank non·bank adj. Of, relating to, or done by a business or an institution that is not a bank but performs similar services. card games, or games where players bet against each other instead of the house. Poker is OK; blackjack blackjack, one of the world's most widely played gambling card games; also known as twenty-one or vingt-et-un. Despite contesting claims between the French and Italians, its origins are unknown. is not. Several Southern California clubs feature these games, such as the Commerce Club in the City of Commerce, the Huntington Park Casino, the Crystal Park Casino in Compton and the Normandie Club in Gardena. Heavily regulated, the clubs pay a hefty tax to their home cities in order to keep the games going. No casinos run in the city of Los Angeles
On-line casinos like the one spearheaded by Internet Broadcast Systems Inc. offer roulette, craps, slot machines and sports-book betting. Would-be gamblers use credit cards to place bets or open electronic cash accounts through a site's bank. When members visit an on-line casino, they enter their password and begin to play. Some federal officials say on-line gambling is illegal, but the courts have not made a specific ruling on the issue. CAPTION(S): box BOX: State has limited casino action (see text) |
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