Longform

Cyber Stakes

Page 5 of 6

Instead of fighting Internet gambling, governments should embrace it, Angel insists. Through ICN's Website, for example, state governments and even churches could make money. "The states could sell a lot more lottery tickets," he says. "And the little old lady who can't get to the church to play bingo or just doesn't want to see the other old ladies could play from home."

Angel also insists there are few Web gambling rip-offs. "Word travels very quickly on the Internet," he says. "The moment some site doesn't pay off, the news will spread and no one will bet on that site." The cost of establishing such a Website -- hundreds of thousands of dollars for software and licensing fees to the countries from which they operate -- makes the risk very high for a short term rip-off, he contends.

Like casinos in Las Vegas and Atlantic City, Angel says, people in the Internet business can make a nice living by sticking to the odds.

Richard Iamuno, president and CEO of Atlantic International Entertainment in Boca Raton, agrees. Iamuno says his company is the largest provider of interactive betting software in the world. From 1996 to 1997 AIE's revenues rose from $454,000 to $4.4 million. The company lost $376,000 in 1996 but earned a $1.1 million profit last year. Its principal products are Internet gambling software programs. Their biggest markets are in South Africa and Australia, Iamuno says.

The big question for Iamuno and others in his industry is the one Shabber poses. "Who knows if it's honest?" he asks. "I mean, it's software. They can make it do anything."

Iamuno insists bettors needn't worry if they stick to established operators. Software that allows gambling on the Internet was first developed by companies including Cryptologic of Canada, Microgaming of South Africa, and Atlantic International, he says.

Iamuno's firm uses Microsoft technology to create "random number" patterns that mirror the odds in real casinos. For example, in craps Iamuno's software rolls the number seven with the same probability as at Caesars Palace. Card games, roulette, blackjack, and other games also echo casino probabilities, he says. The key is source codes, programming formulas Atlantic International uses to set odds.

"The numbers are random, so the odds are true," he says. "There is no fixing. I can't say it would never happen, but, in order to alter the software, an operator would need the source codes, and we don't give them out."

Iamuno's software costs from about $200,000 to more than $1 million. He employs programmers, artists, and writers to customize the software. One place his program is used is the Australian province of Queensland, which legalized Internet betting in March. Today the provincial government takes bets from around the world. A portion of winnings is taxed by the bettor's local government.

Iamuno's software is also used in Antigua. Gyneth McAllister, age 37, the Antigua government liaison to the offshore betting industry, insists that her government closely monitors software used by the Sports Exchange and other gambling sites. All prospective operators must give the government a copy of their software as well as the programmer's name. Regulators test the software periodically to ensure it has not been altered, McAllister notes. All prospective Website owners are also vetted by Interpol, she says.

Antigua has been wracked by political and criminal scandals in recent years, including U.S. charges that Antiguan officials helped secure arms for Colombian drug dealers. But Baldwin, the Gainesville professor, says Caribbean countries are attempting to keep their industry honest. "They could use more help from countries like the United States and the United Kingdom," he says, "but they are trying."

Accusations of corruption rile McAllister. "The United States has always pictured the people of the islands as poor, and they imply that hand in hand with poverty goes corruption," she complains. "That isn't so. More money is laundered in Miami in a single day than we could ever launder here. We would rather have good relations with the United States. If they want a piece in tax like the Australians, we can give them their cut."

Propped in a chair before his computer in Boca Raton, Shabber hopes Internet gambling remains available. He's trying a new game on the Web called Planet Poker that allows people from around the world to gamble and chat. Several players are gathered around the virtual table. All use nicknames. They include Johnny from San Antonio, Ismos from Istanbul, El Cid from Philadelphia, and Kingduey from Pembroke Pines. Shabber has also discovered that some virtual casinos now offer "comps," as in Las Vegas: Subscribers are awarded points that can be cashed in at a virtual mall for gifts.

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John Lantigua