Internet Gambling

April 11, 2007

Editor’s note: We continue our look at the trappings of the Internet for “tweens and teens” this week with an exploration into Internet gambling. Express contributing editor Rick Coates will conclude his series in an upcoming issue with Internet pornography.
While online gambling is illegal for the most part in the United States, it is legal in several countries. Most online gambling sites require participants to be 18, but with a couple of quick keystrokes, even a child can fake his or her ID to a computer.
While online child sex predators might be surfing the web, kids are more susceptible to online pornography and gambling. Both online industries generate billions annually in profits. Traditional forms of gambling and pornography are not readily accessible for kids, but online access to both is just a search engine and a parent’s credit card away.


By Rick Coates
 
T
he MSNBC program “To Catch A Predator” has shed national spotlight on the perverted online predators who cruise Internet chat rooms, seeking out vulnerable kids. The success of the program though has overshadowed a more likely predator to our kids: Internet gambling.
Last year while writing a series on MySpace.com, I heard from several parents about other Internet concerns, including a Petoskey mom who told me a sad story about her 16-year-old son going over $30,000 in debt gambling online. He used credit card solicitations sent to his mother to obtain several credit cards, and over a six-month period fell deep into debt. As a single mother working two jobs, she had to file for bankruptcy.
Another incident took place out east where a college student and minister’s son with a four-point average and also the president of his fraternity, rang up over $50,000 in online gambling debts. He was considered a model student and citizen until he robbed a bank to get out of debt. He is now serving 20 years in prison. 
 
BIG MONEY
Last year legal gambling operations in the United States generated nearly $100 billion in revenues. Estimates are that illegal gambling operations generate several billion. Online gambling revenues are harder to track, but industry estimates predict more than $15 billion this year will be spent at the more than 1,700 online gaming sites.
Exposure to gambling is at every turn for today’s kids. Education in Michigan is partially funded from gambling revenues (lottery). Even the popular sports networks, ESPN and FOX Sports Detroit, broadcast several gambling programs. The popularity of these televised “poker” tournaments has filtered down to high school kids.
A recent federal study on kids and gambling found gaming on the rise with 31 percent of 12-year-olds, 42 percent of 14-year-olds, 49 percent of 15-year-olds, 63 percent of 16-year-olds, and 76 percent of 18-year-olds having participated in some sort of gambling activity over the past year.
Not everyone sees gambling as a bad thing for kids. Last October an article in Time magazine touted benefits of teens playing poker, suggesting that it creates “social interaction,” “teaches life lessons,” and “sharpens math skills.”
But others feel promoting gambling activities among kids is a slippery slope. A recent study showed that more than five million American teens have a gambling problem.
 
EASY ACCESS
While going to casinos is off limits for kids, accessing gambling options online is not. Internet expert Nancy Willard, who has authored two recent books on cyberbullying and two weeks ago released “Cyber Safe Kids, Cyber Safe Teens,” cautions parents to be aware of “grooming” techniques used by the Internet gambling industry to lure in kids.
“Popular cites like neopets.com for eight- to 12-year-olds seem harmless but are actually teaching kids gambling techniques,” said Willard. “I’m not suggesting that you not let your kids’ use these sites, I just caution parents to be aware that these types of sites have gambling-based games such as ‘Neopoker,’ ‘JubJub Blackjack’ and ‘Diceroo.’ I can’t stress enough to parents that monitoring your kids online activity is important. Don’t scare them, just warn them of the dangers and take an interest in what their online interests are.”
Researchers believe that online gambling is growing faster among teens today than alcohol and drug use.
In the study conducted by the Federal Trade Commission (FTC), it was determined that kids and teens have excessive access and exposure to online gambling. The FTC visited over 100 popular gambling websites and found that minors can access these sites easily, and are often exposed to ads for online gambling on non-gambling websites through pop up ads while doing research for school projects or searching for online games to play.
 NO WARNING
FTC staff found that the online gambling sites had inadequate or hard-to-find warnings about underage gambling prohibitions, and that some 20 percent had no warning at all. The survey also found that these gambling sites had no effective mechanism to block minors from entering the site.
The FTC wants teens and parents to understand the risks associated with kids gambling online and have issued the following warnings:
• You can lose your money. Online gambling operations are in business to make a profit. They take in more money than they pay out.
• You can ruin a good credit rating. Online gambling generally requires the use of a credit card. If kids rack up debt online, they could ruin their credit rating - or their parent’s.
• Online gambling can be addictive. Because Internet gambling is a solitary activity, people can gamble uninterrupted and undetected for hours at a time. Gambling in social isolation and using credit to gamble may be risk factors for developing gambling problems.
• Gambling is illegal for kids. Every state prohibits gambling by minors. That’s why gambling sites don’t pay out to kids and go to great lengths to verify the identity of any winner (however, many sites do not go out of their way minors from paying into the system).
 
EPIDEMIC?
Dr. Jeffrey L. Derevensky is co-director of the International Centre for Youth Gambling Problems and High-Risk Behavior at McGill University in Montreal (www.youthgambling.com) His center studies issues regarding youth gambling, and his clinic treats people who exhibit gambling-related problems. He is concerned about the growing epidemic among kids gambling online.
“The gambling industry’s general rule of thumb is the more you play, the more you lose,” said Derevensky. “So when a teen starts out at a practice site (there are sites that don’t require money to teach the basics of gambling) or places small wagers and wins, they have a false sense of security. One of our studies showed that the payout rate at practice sites is far higher than at the real sites.”
Derevensky is not an advocate for eliminating gambling, nor does he think all types of online games of chance are harmful. His studies show that most kids who gamble in moderation never have problems with gambling as adults, though he’s not condoning kids gambling. He suggests that kids get an early exposure to gambling, parents should monitor not only their online activity, but gambling activities in general. For example, place non-monetary bets only with friends, and family and play card games for fun without the wagers.
“Our research suggests that children start gambling when they are nine and 10 years of age. It starts with simple bets among their peers, or their parents buy them a lotto ticket or one of those scratch off lottery tickets as a gift,” said Derevensky. “The best thing you can do for your kids is to warn them of the dangers of gambling as you would warn them of the dangers of drugs and alcohol.”
Derevensky and his team have two resources available for parents, educators and teens. Their website www.youthgambling.com, is loaded with resources for educators and parents, while a new site, www.gamtalk4teens.org, serves as an online chat and resource center for those under 27 who are struggling with gambling issues.
Gambling in our society seems to grow in popularity every year. In addition to Native American casinos, most states have lottery programs. Millions of Americans watched the televised World Poker Championships last year and celebrities are boasting of their winnings and losses. Most recently, Charles Barkley boasted of major bets wagered in Las Vegas, and Michael Jordan noted the rush he got from his high stakes gambling.
Now gambling online has become one of the largest economies on the Internet (only online pornography generates more revenue), which means that it is accessible to children. Talk to your kids about it today. Your credit rating, and possibly theirs, might be saved.

Next: a look at Internet pornography.