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business newsStates to Online Gamblers: Vice is Nice -- If We Can Tax It
By
Scott Reeves Jun 17, 2009 1:00 pm
Betting on regulation, taxation to increase revenue.
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No? That was the measure that outlawed online gambling (no kidding -- see Title VIII), to which Victor Palmer said “Nuts!”
The entrepreneur wanted to subvert what he saw as a deep bow by Congress to the casino industry. After a few beers, he came up with the idea for CentSports.com and, he’s proud to note, launched the website as a commercial venture when the moon was full.
His raspberry to Congress plays out against the Justice Department’s seizure last week of $34 million belonging to online poker players. The Poker Players Alliance, a lobbying group, says about 10 million Americans spend about $6 billion a year on the game. Last month, Congressman Barney Frank, a Massachusetts Democrat and chairman of the House Financial Services Committee, proposed to legalize online gambling. The goal: Regulate and tax it.
CentSports.com may be a peashooter aimed at the gut of major companies such as Boyd Gaming (BYD), MGM Mirage (MGM) or Trump Entertainment Resorts (TRMP), but for Palmer, it’s a work of conceptual art -- mischief created by the Internet’s reach and low cost.
“There’s no law to prevent me from giving away money,” Palmer says. “I wouldn’t break the law, but I decided to resist it by giving people a stake and recouping my money through advertising.”
The website’s “scary disclaimer in tiny print” says, “CentSports.com is a free sports-betting site. Our users never pay anything to place bets here. All bets are entirely ad-supported, i.e. paid for by our advertisers. Have a problem with that? Well then move to Las Vegas!”
There is no catch -- really. The rules state, “If you win enough of your play money bets, we’ll actually let you ‘cash out’ your play money for real money -- and maybe other stuff like t-shirts, CentSports gear etc.”
The website is legal, and Palmer hopes it drives Congress nuts. Alas, the FBI hasn’t knocked on his door at midnight and Congress hasn’t slapped him with a subpoena. Still, CentSports.com isn’t a seat-of-the-pants operation, and Palmer has retained an attorney and lined up a board of directors to be sure everything is done according to Hoyle.
“People hear ‘sports gambling’ and they freak out,” Palmer says.
No positions in stocks mentioned.
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