Monday, August 20, 2018
Opinion

Column: Online gambling is a strategic national threat

Online gambling, now operating from U.S.-based websites, is the new face of gambling expansion. We should not be naive, however. Beyond the known social costs of gambling, there is now the threat from online criminal activity, money laundering and, potentially, even al-Qaida funding. What is happening?

Pandora's box was unwittingly opened by the Justice Department in a December 2011 opinion that — erroneously, we believe — declared that the Wire Act of 1961 applies solely to sports betting, and thus appearing to open the door to other online gambling.

Expansion followed. Nevada now has two online poker sites operating; Delaware launched its gambling website with blackjack, roulette, slots and poker on Oct. 31; and New Jersey will launch on Nov. 21.

Remote gambling is fundamentally different from brick-and-mortar casino gambling because the website operator never has complete control. Using technology undetectable to website operators and their regulators, it is possible for gamblers to play games from physical locations that are not what they seem. We know, because we have done it.

Recently, House Energy and Commerce Committee staff and others in the Capitol Hill office of U.S. Rep. Gregg Harper, R-Miss., witnessed a demonstration in which a single remote computer took control of two computers and used them as alias machines to play poker online. The Harper demonstration showed the technology and techniques that terror and crime organizations could use to operate untraceable money laundering built on a highly liquid legalized online poker industry — just the environment that will result from the spread of poker online. One of us set up a website — undetectablelaundering.com — to help communicate the problem to a broader audience.

No one should doubt the ability of criminals to exploit the inherent weakness in online gambling. A drug cartel could arrange for buyers' machines to be remotely linked and lose to the aliased cartel machines. Drug buyers would not even need to play from their own machines. Illegal drug money would appear to be legal online winnings.

A single poker game takes just a few hours to transfer $5 million as was recently demonstrated — legally — by American player Brian Hastings with his Swedish competitor half a world away. An established al-Qaida poker network could extract from the United States enough untraceable money in six days to fund an operation like the 9/11 attack on the World Trade Center.

The threat is real. Last month a Texas lawyer was found guilty of trying to launder $600 million in drug money for a Mexican cartel. Caesar's Entertainment is currently under investigation by the Justice Department and IRS, accused of money laundering and Bank Secrecy Act violations.

In December 2012, the FBI's Tampa field office asked us to take down the website explaining the threat. We complied. This May, special agents at FBI headquarters in Washington responsible for enforcing the Wire Act and all other federal gambling laws were briefed on the vulnerability. In July, a Senate Commerce Committee hearing seemed to reinforce concerns. Rep. C.W. Bill Young wrote a letter of concern to FBI director Robert Mueller on Aug. 7.

But since then action seems to have stalled. And the threat moves on.

With the passing of Young, we have put the website back up and joined together in hopes of spurring action. Since it remains true that gambling regulations in Nevada, Delaware and New Jersey are no match for determined terrorists and criminals, we feel duty-bound as responsible citizens to ensure knowledge of the threat reaches as many policymakers as possible.

We have proved it is possible to make money laundering undetectable. Gambling should be firmly restricted to stay offline.

James Thackston, far left, is a Florida-based independent software engineer with a background in the aerospace, manufacturing and energy industries. Earl L. Grinols is distinguished professor of economics at Baylor University, former senior economist for the President's Council of Economic Advisers, and author of "Gambling In America: Costs and Benefits." They can be reached at [email protected] and [email protected] They wrote this exclusively for the Tampa Bay Times.

Comments
Editorial: Did Rick Scott’s wallet affect his epiphany on rail line?

Editorial: Did Rick Scott’s wallet affect his epiphany on rail line?

Within weeks of taking office in 2011, Gov. Rick Scott made one of the worst decisions of his administration and refused $2.4 billion in federal money for a high-speed rail line between Tampa and Orlando. Within months of leaving office, the governor...
Published: 08/17/18
Editorial: Hillsborough has a place among growing number of governments suing opioid makers

Editorial: Hillsborough has a place among growing number of governments suing opioid makers

Local governments across the land can find plenty of reasons to go after the drug industry over the crisis of opioid addiction.Hillsborough County can find more reasons than most.• In 2016, the county led the state with 579 babies born addicted to dr...
Published: 08/17/18
Editorial: Here’s what needs to be done to stop algae blooms

Editorial: Here’s what needs to be done to stop algae blooms

The environmental crisis in South Florida has fast become a political crisis. Politicians in both parties are busy blaming one another for the waves of toxic algae blooms spreading out from Lake Okeechobee and beyond, fouling both coasts and damaging...
Updated: 1 hour ago
Editorial: Journalists are friends of democracy, not the enemy

Editorial: Journalists are friends of democracy, not the enemy

It is real news that the Hillsborough County School District said this week it will accelerate testing for lead in drinking water and release the results after the Tampa Bay Times reported testing would take years and that until we asked families wer...
Published: 08/15/18
Updated: 08/16/18

Bumping into GOP cowardice on guns

One small island of sanity in the generally insane ocean of American gun culture is the near-complete federal ban on civilian possession of fully automatic weapons — machine guns.The nation got a bitter taste last year of what we’d be facing on a reg...
Published: 08/14/18
Updated: 08/17/18
Editorial: Vaccinations are safe way to prevent measles

Editorial: Vaccinations are safe way to prevent measles

The revelation that three people in Pinellas County have contracted the measles virus should be a wake-up call to everyone to get vaccinated if they haven’t been — and to implore parents to immunize their kids. Contagious diseases such as measles can...
Published: 08/14/18
Updated: 08/17/18
Editorial: Habitat for Humanity still has questions to answer about selling mortgages

Editorial: Habitat for Humanity still has questions to answer about selling mortgages

A good reputation can vanish overnight, which is why Habitat for Humanity of Hills-borough County made a smart decision by announcing it would seek to buy back 12 mortgages it sold to a Tampa company with a history of flipping properties. The arrange...
Published: 08/14/18
Editorial: Vote — or a minority of the electorate will decide your future without you

Editorial: Vote — or a minority of the electorate will decide your future without you

40%of Americans who were eligible to vote for president in 2016 just didn’t bother. That number dwarfs the portion of all eligible voters who cast a ballot for President Donald Trump — 27.6 percent — or, for that matter, Hillary Clinton, 28.8 percent...
Published: 08/13/18
Updated: 08/17/18
Editorial: Why stand your ground has to go

Editorial: Why stand your ground has to go

Pinellas-Pasco State Attorney Bernie McCabe made a reasonable decision to charge Michael Drejka with manslaughter in last month’s deadly Clearwater convenience store parking lot confrontation. The shooting, which erupted over use of a handicap parkin...
Published: 08/13/18
Editorial: Politics aside, arguments are clear for moving appellate court to Tampa

Editorial: Politics aside, arguments are clear for moving appellate court to Tampa

It’s time to re-establish a permanent home for the state appeals court that serves the Tampa Bay region.It makes sense to put it in Tampa, the same as it made sense 30 years ago when the court’s operations began moving piece by piece up Interstate 4 ...
Published: 08/09/18
Updated: 08/10/18