On Christmas morning, I started the day with a few cups of coffee and the Sunday New York Times. And that’s when I came across Matt Richtel’s article, “Wall St. Bets on Gambling on the Web.” This great piece profiles the surging role of Wall Street investment houses in the world of web-based gambling sites, like SportingBet.com and BetOnSports.com. Why does it matter? Well, because what these sites provide is still illegal in America… so the article asks a lot of questions:
“Millions of Americans use the Internet to play games like poker, blackjack and roulette, or to place wagers on sporting events. Online casinos advertise in magazines and on cable television while filling big billboards in Times Square and other places where crowds congregate. Celebrities like Jesse Ventura, the former governor of Minnesota, hawk their wares.
Representative Bob Goodlatte, Republican of Virginia, an opponent of gambling, said that the federal government had essentially given up enforcing laws against offshore casinos. He noted, for example, that casino operators now travel freely within the United States, gathering at trade conventions even though, he said, prosecutors would be within their rights to arrest and bring charges against them. He said that the involvement of investment firms could be part of a pattern of laws being flouted.
‘It’s very bad, and the Congress ought to investigate it,’ Mr. Goodlatte said, adding that it may turn out that the investment houses are knowingly supporting and promoting illegal enterprises.
For their part, the investment houses have taken the position that they indeed know there are legal risks involved in investing in offshore casinos, but that the risks are outweighed by the benefits of owning shares in growing, highly profitable businesses. Those shares can give a lift to mutual funds and other types of investments sold by the investment houses, meaning bigger returns for clients.”
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