Back in 2006, Congress passed a law "prohibiting credit card payments or electronic fund transfers for any illegal internet wager" to help prosecutors crack down on online gambling rings. Lawmakers were confident the legislation would make it "more difficult to gamble on the internet," The New York Times reports.
It hasn't made much of a dent.
"By almost any measure, the law has been a spectacular failure, an investigation by The New York Times has found.The law could not stem the tide of illegal betting because the industry thrives not on online payments but on an old-fashioned shadow banking system where billions of dollars pass through paper bags, car trunks, casino chips and various money-laundering schemes.At the same time, Congress failed to grasp the power of the inexorably evolving internet, or how difficult it would be to regulate. By allowing entrepreneurs to exploit a legal, if suspect, exemption, the law unwittingly opened the way for the now-ubiquitous fantasy sports games that increasingly resemble gambling." [The New York Times]
Indeed, as one insider put it to The New York Times, the "combination of technology and geography" has, essentially, taken away "the ability of the U.S. government to control it.'"
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That's especially true for the suddenly massive daily fantasy sports industry. You've surely seen the ads for heavyweights like FanDuel and DraftKings, which allow fantasy football lovers to select salary-cap lineups anew each week, and compete against hundreds of thousands of other users in sprawling tournaments. But when it comes to such sites, which award millions upon millions of dollars in payouts each week, the Times reports that "unlike casinos and racetracks, fantasy sports continues to operate free of state or government regulation."
Read the entire fascinating investigation at The New York Times.
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