Terrorist Funding Via Online Gambling Doubts
Published: Thursday, February 08, 2007 Online-Casinos.com
DOUBTS ON TERRORIST FUNDING THROUGH ONLINE GAMBLING
Is online gambling a terrorist front? To some, government's tactics smack of Prohibition, religious mania
The Las Vegas Business Press this week published an article by writer Bob Shemeligan on the current US situation which claims that US federal officials, already incensed over billions in gambling revenues leaving the U.S.A, are trying to link Web gambling to terrorism.
Quoting Saverio Scheri of WhiteSand Consulting, the article postulates that the reason why a lot of American land-based casinos have so far backed away from the Internet and offshore enterprises is because of the Patriot Act. "Investigators believe some of that money is being laundered and is ending up in the hands of terrorist groups," says Scheri.
Shemeligan does on to reveal that the prosecutor leading the charge against online gambling operations is David Litterick (45) the U.S. attorney for the Southern District of New York who has built a reputation as an expert in terrorism.
He prosecuted some of the terrorists involved in the 1993 bombing of the World Trade Center. His prosecutions of the bombings of the U.S. embassies in Kenya and Tanzania earned him death threats, as well as a position at the Department of Homeland Security.
The article recaps the recent arrests of online gambling executives and offshore e-wallet founders, claiming that BusinessWeek magazine estimates Kneeler made nearly $850 million in fees during the first half of 2006 - the bulk of it from American bettors. It records that latest subpoena attempts by the DoJ to obtain confidential information from at least four Wall Street investment banks to hand over details of their dealings with online gambling companies.
The firms reportedly are HSBC, Credit Suisse, Deutsche Bank and Dresdner Kleinwort, which have underwritten public offerings of some of the most popular and profitable online gambling sites, and have offices in London, a city that is the fundraising center of the online gaming industry.
Well known online gambling information publisher Sue Schneider is quoted as saying: "There certainly have been a lot of scare tactics but they're working."
Schneider says federal investigators are trying to link online gaming operations to terrorist groups. "They've been saying that since 9/11. At some point it gets to be ridiculous and, more probably than not, what they'll do is drive the business underground.
"You would think that officials would look at (the potential for tax revenue)," Schneider said. "This is an industry that has been advocating regulation and it would not be averse to some sort of tax structure. But this isn't about regulation and taxation. It's about control and (being) anti-gambling."
One who agrees is Anthony Cabot, a Vegas-based attorney who specialises in Internet-gambling law. "After a while, it becomes a self-fulfilling prophecy and frighteningly similar to Prohibition," Cabot said. "By forcing them underground, you increase the potential for less-reputable sites."
Another gaming expert, who asked to remain anonymous, was more succinct: "(Terrorism is) a smokescreen thrown up by the right-wing Christian lunatics in the government who want to control every facet of human behaviour from birth to death. As far as I know, there isn't a scintilla of evidence there's any link between online sites and terrorist groups.
"With the new legislation, though that is ironically more likely to occur," the source continued, "since Russian mobsters and others are likely to see unregulated, rogue sites as a way to raise untaxed money."
"This [terrorist funding] argument has come up before," Cabot told the author of the piece. "There are probably 2 000 online gaming sites. Can you say that all of those have no relationship whatsoever to terrorism? No, but what you can say is that the larger companies operating out of the United Kingdom are completely transparent. They have public shareholders and dividends, and audited financial statements."
Allyn Shulman, corporate counsel at Card Player magazine, added, "to specifically link terrorism to online gaming is disingenuous." She believes that, rather than prosecute operators of online gambling operations, the federal government should investigate how to regulate and tax the industry.
"This is just another example of the benefit of regulating and taxing online gaming, as they do in Antigua, where the online gaming companies must open their books to independent auditors who report back to the government," Shulman said.
