According to the United States federal government, Internet gambling is an illegal activity, but according to many of the major firms on Wall Street, it is a great investment opportunity.  The interest of major investment houses on Wall Street, such as Goldman Sachs, Merrill Lynch, and Morgan Stanley, in online gambling companies just serves to emphasize the conflict between the U.S. federal government position on online gambling and the reality that the activity is not only here to stay but is a booming business as well.

The investment firms, which hold millions of dollars in such online gambling companies as BetOnSports and SportingBet, (companies that are traded on the London Stock Exchange and based overseas in places like Costa Rica or Gibraltar), see companies in the online gambling industry as solid investment opportunities.

The growing participation by American investors in the online gaming industry also emphasizes the difficulty involved in policing cross-border activity in the age of the Internet while electronic commerce and a global economy, at the same time, create economic partners across national boundaries.

The legal questions surrounding this issue are not new, as experts have long been divided over whether or not it is legal for an American company to do business with companies whose business practices would be considered illegal on U.S. shore.  The difference with Internet gambling, however, is that the money wagering is done from the homes of people residing in the U.S. and the Department of Justice has clearly stated that operators of online casinos are breaking the law.

A spokeswoman for the Justice Department, Jaclyn Lesch, said that the agency viewed online gambling as illegal but she declined to "comment on the liability or hypothetical liability of a company or an individual."

Analysts of the Internet gambling industry and company executives point to the interest of the investment houses, as well as the vast sums of money come from the players, as proof that federal policy is largely being ignored.  There are millions of Americans who use the Internet to place wagers on sporting events or to participate in games of poker, blackjack or roulette and there are plenty of magazines, cable television stations and even billboards ready and willing to place advertisements for online casinos.

While aware of the legal status of online gambling, Wall Street investment houses maintain that the risk involved in investing in online gambling firms was worth it because of the tremendous profits they stand to reap from those investments.

Posted on: December 29, 2005

Add This Gambling Article To:
Del.icio.us	Digg	Google	Spurl
Furl	Simpy	Y! MyWeb

Back to December 2005's archive
Back to latest Articles