Cyber Stakes

South Florida is at the heart of the Internet gambling boom -- and of the war to stop it

But authorities have not connected any Mafia figures to Internet gambling. "We don't know that any [crime] families involved here are involved offshore," admits Sgt. Doug Reese of the Miami-Dade Police vice squad. "It's just a matter of time," says Betz.

The U.S. government can keep Internet gambling relatively honest if it makes the right decisions now, insists Albert Angel, a North Miami Beach advocate for Web betting.

Angel is general counsel of ICN Corp., which runs the National Raceline, a company offering horseracing results using 1-900 telephone numbers. His office in the NationsBank building in Delray Beach is decorated with oil paintings, bronzes of racehorses, and LeRoy Nieman's basketball posters. A table in the reception area is strewn with copies of Blood Horse, a magazine about horse breeding. In one office an employee speaking in the distinct cadence of a horseracing announcer reads results into a tape recorder. Another registers results of a New York state lottery. ICN also provides a 1-900 number so Florida lottery buyers can get results, at 77 cents per minute.

ICN wants to sell tickets for state lotteries all over the country on the Internet, if and when the government allows it, says Angel. Angel, age 44, was an assistant attorney general from 1979 to 1984, largely working in the antitrust division of the Justice Department. He helped break up Ma Bell. "Since then I've made my career in telecommunications," he says. Angel went to work for ICN after another business venture didn't pan out.

As vice chairman of the Interactive Gaming Council, a group made up largely of executives in the gambling business, Angel is leading the fight against the Kyl bill. His opposition is a motley anti-gambling crusade that includes professional sports leagues, the Christian Coalition, and Ralph Nader. "If the idea is to protect consumers, then regulation will work much better than prohibition," he grouses.

Outlawing Internet gambling will only drive bettors into the hands of criminals, Angel insists. Thugs with laptops will end up rich. The government will lose tax revenues.

"No matter what you feel about gambling from a moral standpoint, it is pervasive," Angel says. "Offerings by reputable companies will drive fly-by-night operators out and will be easier to regulate." The industry is addressing problems and the government should help, he says. Website managers attempt to exclude crooks, assure that minors don't bet, and keep compulsive gamblers from ruining their lives. Already some gambling sites contain links to Gamblers Anonymous so users can click and get help, he points out.

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 government where the bettor lives.

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