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The Honolulu Advertiser
Posted on: Sunday, October 23, 2005

Hawai'i does little to block illegal online gambling

By ALEXANDRE DA SILVA
Associated Press

Thousands of miles from the nearest casino, in a state where gambling is illegal, people in Hawai'i are wagering thousands of dollars in poker tournaments and other games without getting arrested.

And they are doing it from the comfort of their homes, where many have high-speed access to the world's largest casino: the World Wide Web. Money flowing in and out of thousands of gambling sites on the Internet is expected to reach $15 billion this year.

Hawai'i is one of six states that outlaw online gambling but do little to enforce the law. The others are Illinois, Louisiana, Michigan, Oregon and South Dakota.

While gambling arrests in the Islands are up, with 205 arrests so far this year for mostly clandestine casinos and cockfighting, Honolulu police have yet to charge anyone for betting online at Internet casinos, which is a misdemeanor.

In fact, according to California law professor Nelson Rose, who tracks online gambling laws, only one person has ever been charged in the United States for online gambling.

In 2003, Jeffrey Trauman, a North Dakota car salesman, was arrested for winning some $300,000 in online betting in a state where the law allows for no more than $500 in winnings, said Rose of Whittier College School of Law in Costa Mesa, Calif.

HPD Lt. Walter Ozeki, who heads a gambling detail, said, "Unless we get a complaint specifically regarding Internet gambling it is very unlikely that we would investigate it. It is a very difficult type of investigation to launch."

Internet gamblers interviewed in Hawai'i declined to be named because the practice is illegal.

Philip K., of Gamblers Anonymous International, said online casinos are claiming more victims of compulsive gambling, a problem he estimates affects some 18 million people in the United States, some as young as 15.

"They hear about unknown people who sat in at multimillion dollar contest and they won the contest; people who were not professional," said Philip, himself a 25-year recovering gambling addict from the San Fernando Valley in California. "They get sucked in with their ATM cards."

Industry analysts say gambling laws are vague and outdated.

"I've looked at all the states," said Joe Kelly, a professor of business law at the State University of New York at Buffalo. "These laws are unenforceable."

At the federal level, gambling laws send a mixed message.

The U.S. Department of Justice says the 1961 Wire Act that prohibited betting on horse racing over phone lines applies to Internet wagering. But the 5th U.S. Circuit Court of Appeals ruled in 2002 that the Wire Act is confined to sports betting, said Frank Fahrenkopf, the American Gaming Association's chief executive.

Police, however, say it's not their job to go after foreign Internet casino operators.

"We don't have any reach there anyway, so there's not a whole lot of point in investigating it," said FBI special agent Charles Goodwill, who heads the agency's operations in Hawai'i.