FOR DISCUSSION: Online casino...but why??

Convenient, simple and comfortable

According to the study of Wood et. al. (2007), gambler usually play online usually is due to the convenient (12.9%) and easy to play (12.2%) in a comfortable place (11.7%). With the internet, people are able to gamble anytime and anywhere they want as they need not go to the casino physically which may be located far away. Plus, the online casino also provides them with variety of betting games which are similar as the real one (Online Gambling Insider 2010). Besides, it is easy to play as the players would only need to “click” and the locations are base on own preference as long as they can access the internet.

Bonuses

People are usually having difficulty in funding their capital to gamble in a casino. Thus, more and more online casinos had come up and implement the new business strategy – providing sign in bonus to attract customers. Players are getting money for free without the need to play when they sign in for the very first time. Who doesn’t want this? Besides that, the online casino is giving higher payout compare to the brick casino. This is due to the high operating expenses bear by the landed casino while the web casino requires less assets and workers (Maincasinovalues.com 2010). Maintenance of the server is the only major matter they need to consider.

Gaming Strategy

From the others' opinion, sometimes playing online may grant greater advantage for the gambler. Unlike the real casino, players who play online may ask a group of people to join as one during the game. They can discuss and share the information among each others before deciding the next bet to be placed. Another example is the mental play such as the online poker where players tend to hide their impression and nature act. As there is no real interaction between players, they can act naturally for the whole time.

Reference:

Online Gambling Insider 2002-2009, Online Gambling Advantages, viewed 9 October 2010,

http://www.online-gambling-insider.com/online-gambling/ogi-online-gambling-advantages.html

Maincasinovalues.com 2010, The Benefits of Online Casinos Vs Land-Based Casinos, viewed 9 October 2010,

http://www.maincasinovalues.com/

Wood, R. T., Williams, R. J., & Lawton, P. K. (2007), Why do Internet gamblers prefer online versus land-based venues? Some preliminary findings and implications, Journal of Gambling Issues, 20, viewed 8 October 2010,

http://www.uleth.ca/dspace/bitstream/10133/375/1/07wood.pdf

FOR DISCUSSION: Where the Profit Comes from???

As mentioned in the introduction part, the online casinos had earned huge amount of profit in the pass year and the number still keeps on increasing today. Most people may be wondering how they earns and where these profit comes from. The followings explain how they generate profit from the players:
1. Losing of bet:
Some casino’s games involve the play of dealer and players where dealer is allowed to become the player and have the equal chance to win the game. For this type of game play, the most common and direct way for them to earn is through the losing bet of players. In addition, sometimes the game structure gives the dealer a superior advantage in winning the game (English Harbour Casino 2010). For example in blackjack, the dealer can directly win the bet without the need to play as long as the player’s card bursts. Players lose their bet in full amount and that is how the online casino gained significant profit from them.
2. Online Casino's 'House Edge'
Based on OnlineCasinoAdmin 2009, the house edge is the difference between the winning odd and the actual payout odd which determined by the casino. For example, when the bet is $1, and the wining payout is $0.98, then the 2% ($0.02) is the ‘house edge’ earned by the casino. So, no matter a player wins or loses in a bet, the 2% profit is guaranteed for the casino. The amount may look little here but it may be different when it deals with multiple and heavy betting players.
3. Commissions
Another easy earning generated by online casino is through the collection of commission or known as the ‘rake’. It is collected based on the fixed rate set by the casino itself or the percentage of total amount bet in every beginning of the round. This method is usually used in the game where the house only acts as the dealer. They do not participate and thus are not capable to win the game such as the online poker (English Harbour Casino 2010). But, the commissions are assured for the casino as every player has to pay for this before the game commence.


Reference:

English Harbour Casino 2010, How Casino's Profit, viewed 8 October 2010,
http://www.englishharbour.com/articles/how_casinos_profit.php

OnlineCasinoAdmin.com 2010, The Profits of Online Casino, Viewed 8 Oct 2010, http://www.onlinecasinoadmin.com/blog/2010/05/the-profits-of-online-casino/

FOR DISCUSSION: How Online Casino Works???

Nowadays, the online casino is getting popular and the business is expanding dramatically especially in US and UK. This is due to the low set up cost as fewer assets and employees are required. According to Wilson (2005), the start up cost for the online casino business range from less than $200 to over $5,000. Only servers are needed and the business is operated through electronic devices with few human resources.
There are few common models used by the online casino to operate their business namely the web-based, download-based and live-based (eCommerce Journal 2006).For the web-based online casino, it only requires the use of browser and few plugin such as the flash player. The advantage of this model is that customers do not have to download any software to run the application. What they need to do is just access the casino’s website and sign up for member to get the log in authority.
Another type is the download-based casino which required the use of certain software to run the program. Players need to download and install the software into their own local electronic hardware with huge data capacity mainly the computer and laptop. However with this software, players can directly connect to the server and the provider is able to contact with them without the need of browser. Besides, it helps to enhance the playing environment of customers due to the higher quality of game background such as the graphic and sound.
Last but not least is the live-based online casino which may be rare but full with fun and excitement. Players are able to feel the actual gambling atmosphere as the dealers are physically real who interact with them using the webcam and online chat (Streetdirectory 2010). Every movement and communication can be seen and heard clearly. With this, players may feel secured and able to play comfortably from their own preferred place.


Reference:

Online casino business, how does it work? 2010, eCommerce Journal 2006, viewed 8 October 2010,
http://ecommerce-journal.com/articles/13944_your_own_internet_casino_a_dream_or_a_target

Streetdirectory 2010, Types of Online Casinos, viewed 8 October 2010,
http://www.streetdirectory.com/travel_guide/113488/world_wide_web/types_of_online_casinos.html

Wilson R 2005, Casino Business Opportunity, EzineArticles.com, viewed 8 October 2010,
http://ezinearticles.com/?Casino-Business-Opportunity&id=36521

FOR DISCUSSION: Impact of Online Casino Gambling Part II

For this part of discussion, we will be looking more towards the impacts of online casino gambling towards players. Some of the key points might be related to what was discussed in part I of our discussion.

As for online casino gambling, impacts could vary and they include:

1. Work negligence

Since online casino gambling could be played anywhere, it is not odd to see employees starting to surf gambling websites from their workplace. Such employee attitude could create work negligence and lead to time exploitation, decrease of productivity, financial problems and criminal activity (Griffiths 2009). Such activities are hard to be tracked by employers/managers and it creates high cost for a company to hire such employees.

2. Pathological Gambling

Pathological gambling occurs where players face disorder because of his/her over addiction towards gambling which affects his/her personal life (Oak 2009). Such attitude/disorder will also indirectly influence the family of the patient. Gamblers would start to deal in gambling activities and neglect their families and friends. As such, the societal life of a casino gambler would be affected. Problems would arise as mentioned in previous posts such as divorce, child abuse and domestic violence. Therefore, it is important to take care of the degree of addiction towards casino gambling.

3. Health

Excessive online casino gambling could also lead to health problems. Staying too long in front of a pc without taking fresh breathes outside the house will lead to health problems such as back ache, obesity and wrist pain. Serious health problems could include eyesight depreciation. Initiatives had been taken  in UK to identify gamblers, control their addiction and prevent them from turning into Problem Gamblers (Problem Gambling And Its Effects 2006).

4. Underage Gambling

One of the major concerns includes underage gambling. Underage gambling is possible through the Internet as children gamble using their parent’s credit cards (Negative Effects of Online Gambling). Underage gambling is dangerous as it does not only expense parent’s credit cards without permission, it might also expose children and young teenagers towards the online casino gambling field. Things would turn worse when they get addicted to it. Therefore, it is always important for parents to always keep track and concern their children.

It can be generally concluded that online gambling does bring more harmful impacts. It is advisable that children/young teenagers are prohibited to engage in such activities while adults being not too endorsed to it. But it seems nearly impossible to impose such measurements as it is hard to identify which accounts are played by teenagers/underage children not to mention that this is online casino gambling.

Reference

Griffiths, M 2009, ‘Internet gambling in the workplace’, vol.21, no.8, pp 658-670, Emerald Group Publishing Limited, Nottingham Trent University, viewed 6 October 2010.

Oak, M 2009, Impact of Internet Gambling, viewed 6 October 2010, http://www.buzzle.com/articles/impact-of-internet-gambling.html.

Negative Effects of Online Gambling, viewed 6 October 2010, http://www.usaplayers.com/gambling/negative-effects-of-online-gambling-in-the-usa.html.

Problem Gambling And Its Effects 2006, MediLexicon International Ltd, viewed 6 October 2010, http://www.medicalnewstoday.com/articles/41277.php.

FOR DISCUSSION: Impact of Online Casino Gambling Part I

There is a lot of impact of getting involved in numerous casino games. For our topic, we will look at a few impacts from general gambling and also online casino gambling. For this part of discussion, we would be looking on general gamblings first.

1.Societal impact

As stated by Reno (2000), gambling impacts on society might include divoerce, child abuse and domestic violence.  28% of surveyed gamblers noted their cause of divorce being gambling issues (Reno 2000). Besides that, children could also take up gambling as a hobby and eventually fall for the games. Marotta (2006) claimed that 60-90 percent of youth engaged in gambling activities. These activities had also lead to drug takings and alcoholic activities. These could lead to a higher percentage/increase of criminal records for a certain region.

2.Economic impact

Dunstan (1997) explained that gambling can be an extensive development tool.  Gambling activities could lead to increase of employment, land development. By such, the tourism sector could also be nourished by the advantageous economical impact whereby tourists travel to casino places to gamble. However, things could be a turnaround where some players escape tax regulations on their winnings. Nonetheless, overdose of casino gambling could also lead to bankruptcy easily. People might be to enthusiastic in winning that they eventually lose all without realizing.

3.Political Impact

In a paper written by Clark (2002), political issues arising from gambling include bribes on regulative laws which amounted to ten million dollars. What is meant here is that gambling industries pay bribes to governors and public officials to vote for the legalization of gambling. This had created corruption among public officials. Besides that, corruption will also happen where illegal gambling sites/places are prosecuted but bribes were paid to officials to resolve the prosecution in return of not banning/prosecuting the casino gambling sites/places.

As we can see here, impacts of gambling are more towards a negative approach rather than bringing advantageous developments. The three impacts stated are connected to gambling as a whole. Our next discussion would be more focused on online casino gambling impacts.

Reference

Clark, G, Gambling and Political Corruption, National Information Center, viewed 6 October 2010, http://spgfoundation.org/Library/Studies%20and%20White%20Papers/Crime%20and%20Corruption/gambling_and_political_corruptio.htm.

Dunstan, R 1997, Gambling in California, California State Library, CRB-97-003, http://www.library.ca.gov/crb/97/03/Chapt9.html.

Reno, R 2000, Gambling’s Impact on  Families, viewed 6 October 2010, http://www.troubledwith.com/AbuseandAddiction/A000000707.cfm?topic=abuse%20and%20addiction:%20gambling.

Marotta, J 2006, Parents urged to consider dangers of gambling gifts for kids, Grants Pass Climate, viewed 6 October 2010, http://pactoregon.org/news-061120-MarottaKids.html.

FOR DISCUSSION: Let's talk about legality ! (Part II)

On the part II discussion of legality, we would be giving a brief explanation on how organisations tend to escape regulation and liability while operating a gambling website.

An issue that arises when a gambling website is blocked by a country. Say for example, Malaysia. Malaysia blocked a gambling website called winningft.com and prohibits the country's resident to use the website for inappropriate gambling activities. However, the company is clever enough to setup an alternative website to solve the problem. By logging into www.ft9933.com, players can still login into the same website and carry out gambling activities. Therefore, it can be seen how website blocking can be solved by the advancement of IT. Even in Malaysia where most users do not have a constant IP address, the government would find it hard to track down particular users engaged in online casino games activities. What happens when players earn or lose money through the alternative website? Do they get taxed? Do they get sued once transactions are identified?

Besides that, when a transaction occurs, it is hard to determine the execution of law whether in the origin and destination jurisdiction. This is also known as the issue of jusrisdiction (Dewar 2001). Dewar (2001) also emphasized that it is hard to maintain jurisdiction on Internet gambling due to its nature and suggested that Internet regulation would be a way to tackle the current issue. Disputes may arise when countries argue on which jurisdictions to use on. It isn't only prosecution that is complex, court cases could be equally complicated to bring a illegal gambler to justice.

Internet Gambling: An Overview of the Issues (2002) stated that gambling companies might miscode their transactions to prevent their transactions being blocked by credit card companies. Miscoding will prevent denial of authorization and allows the transactions to go through the credit card. One of the ways is through factoring, whereby the gambling companies uses another merchants bank account to initiate these transactions (Internet Gambling: An Overview of the Issues 2002). In return, these merchants receive a percentage profit.

Apart from that, credit card holders does not directly deal with Internet gambling sites. These credit card holders purchases online-payment providers to engage in gambling activities (Internet Gambling: An Overview of the Issues 2002). They pay for real cash virtual credits on some online-payment providers and uses these credits to gamble on internet casino websites which are approved by the online-payment providers. Smith (2009) concluded that the current legal foundation are still uncertain. Smith (2009) quoted an example of employee using different emails to gamble and will not be prosecuted under certain situations.

Besides that, to escape from regulations, these Internet gambling sites are smart enough to penetrate the issue by incorporating their companies in some offshore islands which mainland governments do not have authority in. For example, Pokerstars.com acquired a license and their company is owned by Rational Entertainment Enterprises Limited, which is located at Isle of Man. By such, it is hard for prosecution to be impose on these websites since they could defend themselves by claiming that their business is licensed in the place of incorporation.

In a nutshell, it is hard for prosecutions to be held against these gambling site companies because alternatives could be taken by them to pass through these regulations. They could be 'creative' in their business strategies and still be 'legal' without getting caught. This is similar to 'creative accounting' where managers manipulate numbers to make financial reports look good !


(Disclaimer: Pokerstars.com is a real Internet Gambling website and no liabiliy shall be incurred by our party on any damages suffered by visiting the website.)

Dewar, L 2001, 'Regulating Internet Gambling: the net tightens on online casinos and bookmakers', Aslib Proceedings, vol.53, No.9, pp12-13.

Internet Gambling: An overview of the Issues 2002, United States General Accounting Office, GAO-03-89, Pp 15, viewed 5 October 2010, http://www.gao.gov/new.items/d0389.pdf.


Pokerstars.com 2010, Rational Entertainment Enterprises Limited, viewed 6 October 2010, http://www.pokerstars.com/.


Smith, A 2009, 'Controversial and emerging issues associated with cybergambling (e-casinos)', Vol. 28, no.6, pp 435-443, Emerald Group Publishing Limited, viewed 6 October 2010.

FOR DISCUSSION: Let's talk about legality ! Part I

For those who are interested in online casino games, one possible question to strike their minds is: are these online activities legal and abide by the law? We'll be discussing more on regulations on U.S. in this discussion area.

As in United States, Grohman (2006) said that it is hard to ban the activities of online gambling if there exist financial intermediaries that help the transfer the betting money.With the implementation of financial intermediaries such as credit card companies which may include Visa and Mastercard, it is found hard to sue the websites for legal prosecution on online casino games. Online gamblers use credit card methods to pay and receive money that they won by creating a bank account.

One of the few laws implemented in U.S. include the Unlawful Internet Gambling Enforcement Act (UIGEA) which was enacted in 2006 to restrict payment systems being used by U.S. locals to complete transactions with internet gambling sites (Gambling Online: Is It Legal? 2010). A regulated Internet Gambling framework could help in preserving consumers and ensure these transactions are formal. Legality: Online Casinos and U.S. Legislation (2010) shown that estimates of 80% of online wagers of U.S. are online poker players. This had shown that it is hard to ban internet casino gambling as this would be cutting off the wages of poker players that depend on skillful gambling as a job.

Besides that, Wire Act is also one of the federal laws implemented to prosecute federal level gambling cases (Internet Gambling: An overview of the Issues 2002). Besides that, Travel Act and Illegal Gambling Business Act had also been on pace to ban international bets. Criminal penalties are imposed under Travel Act for person who distributes proceeds of unlawful activity. On the other hand, Illegal Gambling Business Act claimed that it is illegal to operate gambling business. As stated in Internet Gambling: An overview of the Issues (2002), these acts are enacted to gambling businesses and not individual internet gamblers.

Nonetheless, banking sector had always been taking an initiative to help prosecute internet gambling. Credit card associations tend to impose a restriction on credit cards when their customers deal with such transactions (Internet Gambling: An overview of the Issues 2002). As from the other side, banking sectors prevent gambling website organisations from creating an account for such business purposes too.

However, efforts had been taken in U.S. to legalize online gambling. Dodge (2010) claimed that some Internet gambling would be legalized and to allow U.S. citizens to get involved in internet casino games. One of Massachusetts Democrat suggested that residents should be free to do what they want (Dodge 2010).

Generally, it is still a big issue on regulating internet gambling among consumers. Although efforts had been taken, it still seems a big question of when would internet casino gambling be legalized. Next, we'll discuss a few issues on how gambling website organisations tend to escape these enacted laws.

Reference

Dodge, C 2010, House Panel Passes Measure to Legalize Some Internet Gambling, Bloomberg, viewed 5 October 2010, http://www.bloomberg.com/news/2010-07-28/house-panel-passes-frank-backed-measure-to-legalize-some-internet-gambling.html.

Gambling Online: Is It Legal? 2010, viewed 5 October 2010, http://www.the-surfs-up.com/news/gamblingonlinenews.html.

Grohman, C 2006, 'Reconsidering Regulation: A Historical View of the Legality of Internet Poker and Discussion of the Internet Gambling Ban of 2006', Journal of Legal Technology Risk Management, vol 1, no.1, pp. 37.

Internet Gambling: An overview of the Issues 2002, United States General Accounting Office, GAO-03-89, Pp 15, viewed 5 October 2010, http://www.gao.gov/new.items/d0389.pdf.