Study: Gamblers Find Online Casinos a Risky Bet

Although online gambling sites have flooded the Internet in a bid to capture a portion of the potentially lucrative market, many users have hedged their bets over concerns that the sites might not be legitimate, according to a study released Wednesday by Greenfield Online.

Underscoring the slow adoption rate, the Wilton, Connecticut-based research firm found that while a third of the 1,000 users surveyed had visited an online gambling site, 13 percent of them actually opened an account or wagered for money.

The reasons for the betting reluctance can most likely be attributed to thefact that over 50 percent of those polled said they were concerned about thesafety of their money and whether they would actually receive any winnings, the study said.

“People are afraid to wager since they think they won’t get their money, especially when it’s with a casino that is somewhere offshore,” Greenfield vice president of corporate communications Gail E. Janensch told the E-Commerce Times. “These are clearly big inhibitors.”

Analysts have pegged the amount currently generated byInternet gambling at roughly US$2 billion in revenue worldwide.

Trump Card

Greenfield also found that the user comfort levels surrounding online gambling would increase if well-known casinos powered the sites, with half of the report’s respondents indicating that they would prefer to place bets at such a site.

“From our research, it’s evident that consumers are crying out for a name-recognized casino,” Janenschsaid. “If they were to enter the area, I think they would have great success.”

In reality, however, the vast majority of Internet gambling sites currently in operation are controlled by overseas owners, presenting a problem for users looking to identify the entities running the sites or to evaluate their trustworthiness.

State lawmakers have also had their problem with offshore online casinos.Last month, for example, New Jersey filedlawsuits against three Internet casinos, charging that they acceptedillegal bets from the state’s residents.

All Bets Off

As a result, Greenfield said that gamblers are willing to risk far less money at an online site than they would at a traditional casino. In fact, only 4 percent were willing to gamble $100 or more online, while 24 percent said they would gamble that amount at an offline casino.

Moreover, 20 percent of those participating in the study said they believe onlinegambling is not as safe as offline gambling.

Dovetailing with the latest findings, a separate study released last year by Greenfield concluded that because so many online casino operations are run from offshore locations with little government oversight, as many as 60 percent of Web gamblers believe the sites are “fixed.”

Luck of the Draw

The survey comes at a time when Las Vegas casinos are seeking legalauthority to launch sites of their own to compete.

Last month, Nevada Governor Kenny Guinn signed off on a law allowingInternet gambling casinos, becoming the first state to do so. Although thestatute does not legalize online gambling in Nevada, it does permit stateregulators to prepare rules to govern Internet-based betting.

The U.S. Department of Justice, however, has long held that online gamblingof all types is illegal in the United States under the 1961 Wire Act — andhas been successful in prosecuting Internet gamblers and bookies under thatlaw. The Act prohibits bets placed via phone lines and other wired devices.

Meanwhile, Congress is also at work on retooling its own gambling prohibition act, which would attempt to declare credit-card debts incurred from Internet gambling uncollectible. An earlier version of the bill failed to pass last year.

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