WASHINGTON — A new law aimed at curtailing online gambling in the United States has rattled major publicly traded Internet gambling companies but has done little to keep Americans from wagering online, industry experts say.

The changes have been a boon to smaller, privately held companies that may not adhere to the same level of standards public companies must meet, the experts say.

And while the rules may be keeping some casual gamblers from placing bets, those who really want to wager online have found ways to do so.
Ethan Ruby, who lives in New York City, is one such online gambler. While the new law signed by President Bush on Oct. 13 has made it a little tougher for him to play poker online, he says he continues to do so.

“It’s not going to stop people from playing poker,” he said. “They’re just going to go around it.”

Ruby, who uses a wheelchair, said Internet gambling leveled the playing field for him after an accident stripped him of his ability to walk.

“It’s a hobby for me,” said Ruby, 32. “This law is actually discriminatory to disabled people.”

The new law effectively bars online betting in the United States by making it illegal for U.S. banks and credit card companies to process payments to gambling Web sites. But gamblers can still place wagers by going through third-party sites such as Netteller.com that facilitate transactions.

The online gambling industry generated about $7 billion to $10 billion worldwide in 2004, with Americans making up at least half the market, according to the American Gaming Association.

It’s unclear how dramatically those figures have changed since the new law has been in effect.

But industry watchers say traffic to the publicly traded companies, which are no longer accepting U.S. customers, has slumped while traffic to privately held companies, which continue to cater to Americans, have gotten a boost.

PartyGaming, for example, has seen its share of daily players drop from about 16,000 before Congress approved the ban to about 6,200 the day after Bush signed it into law, according to Casino City, a magazine and Web site that follows the gaming industry.

On the other hand, the privately held Full Tilt Poker, has increased its number of daily players to more than 5,000 in late October from just more than 3,000 in late September.

Some major publicly traded companies like PartyGaming and 888 have seen their stock values slump in the past two months. The two companies are reportedly considering a merger to stay afloat.

“The largest, most financially transparent sites have left the market,” said Michael Bolcerek, president of the Poker Players Alliance, which lobbied heavily against the legislation. “You still have some private companies that are well known. But you’re seeing new sites pop up who don’t have the public interest at heart. They’re in unregulated areas.”

Bolcerek argues the measure infringes on Americans’ personal freedoms by requiring banks and credit card companies to monitor their customers’ online transactions.

He and others who support online gaming hope that the new Democratic majority in Congress may be more open to overturning the new law.

Incoming Senate Majority Leader Harry Reid of Nevada has said he does not support Internet gambling. But he said he would be open to a congressional study on the issue.

The law’s full impact likely won’t be felt until next summer when the new regulations actually go into effect.

So it’s still too early to tell whether the new law has been successful at curbing online gaming, said Greg Wierzynski, a spokesman for Rep. Jim Leach, who sponsored the bill in the House. Leach, R-Iowa, was voted out of office in November.

Meanwhile, the United States faces complaints from the island nation of Antigua, which argues U.S. gambling laws violate American free trade obligations. Antigua has challenged the American laws through the World Trade Organization. A decision is expected next year.

No matter what happens, Americans who want to bet online will find new ways to place their wagers on the Internet, said Lou Krieger, who has written several books on poker and gambling.

“Every time a new threshold is created, the least dedicated players will say it’s not worth it for them,” he said. “But there’s a million ways to do this.”

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Author Contact Info: Diana Marrero, The Ithaca Journal