What’s at Stake When It’s Fake?

Courtesy of  en.wikipedia.org
By Carl Weiss
Forgery has been around for as long as civilization has flourished.  No sooner did humans start using chits burnished onto clay tablets to trade goods, when you can be sure some enterprising lad started turning out fakes.  Through the ages people have forged everything from works of art to currency and stock certificates. Some of the forgers went on to become legends.  Many of them went on to prison.  However, what most people do not realize is the effect that forgery has had or could have had on history. Fast forward to the 21st Century! Today a whole new world of forgery is taking place, not by a few, but by billions of unsuspecting internet users. We have fake business websites, fake government websites, Fake blog articles, fake reviews, fake email solicitations, fake products site, fake social media site, heck, what isn’t being faked on the web. To start with, let’s look at fakery throughout the ages to give you a little perspective.

Famous Fakes

Two thousand years ago, early practitioners put reed pens to papyrus to mimic the writing of Socrates and other ancient authors whose work was highly valued.

Donation of Constantine - This ancient letter, which helped bolster the Catholic Church's
Courtesy of  commons.wikimedia.org
for roughly 700 years, was probably the first forgery to significantly impact the course of history. Allegedly sent by the Roman emperor Constantine the Great to Pope Sylvester I in the fourth century A.D.  Constantine's conversion is an historical fact, but the letter is a pure fabrication. While its origin is debated, the Donation was likely concocted between A.D. 750 and A.D. 850, perhaps by a church official. Various popes used it over the ensuing centuries to defend their political power, and the Donation was even celebrated in a painting in the Vatican. It was revealed as a fake in the 15th century.

While there are too many art forgeries to enumerate, what shocks many people is to discover that Michelangelo began his career by passing off an early marble sculpture called Sleeping Erosas as an ancient Roman statue.  Even more incredible is the way in which Michelangelo pulled off the statue’s “discovery” by burying it in his art dealer’s yard only to unearth it himself.

When it comes to famous fakes, art forgery while proving as something of an embarrassment to wealthy collectors and art historians alike has never had any real impact on current events.  That’s not the case with counterfeit currency. 

Courtesy of  en.wikipedia.org
After the overthrow of the Shah of Iran, Ayatollah Khomeini’s minions began to produce some of the most authentic looking fake $100 bills the world has ever known.  This had an impact on the US economy, which was so profound that it caused the federal government to redesign the hundred dollar bills.  The reason the fakes were so hard to spot was due to the fact the feds had sold the Iranians the same presses, ink and paper to print their currency (known as the Rial) that we used to print ours. 

The Man Who Stole Portugal

However the Iranians tried, their counterfeiting enterprise couldn’t hold a candle to the world’s greatest counterfeiter, a Portuguese by the name of Alves Reis.  The son of an undertaker, Alves was without a doubt one of the most brazen forgers of all time.  Immigrating to Angola in 1920, where he hoped to make his fortune, he began his career by forging a diploma from Oxford University, which he used to secure a government post as a public engineer.  When this move did not provide the kind of return on investment that he would like, Alves took his career to the next level by forging a check which he used to acquire controlling interest in the Transafrican Railways of Angola.  Next, he returned to Lisbon and forged yet another check, this one used to buy controlling interest in a Portuguese company called Ambaca, using the company kitty to cover his tracks. 

Courtesy of commons.wikimedia.org
Had he stopped there he would have retired a wealthy man.  But Alves’ ambitions knew no bounds and he tried to use the remaining Ambaca funds to acquire controlling interest in the Angola Mining Company.  This time his chicanery was discovered and he was tried and convicted of embezzlement in 1924.  However, due to a loophole he was released after only serving 54 days in prison.

No sooner was he released when Alves embarked on his most ambitious swindle to date.  Forging a contract to the Bank of Portugal, he used this paper to recruit several key conspirators, including the brother of the Portuguese ambassador to the Netherlands.  Using these assets along with forged signatures of Bank of Portugal officials, Alves managed to trick the London printing firm of Waterlow and Sons Ltd, who were already under contract with the bank into printing an additional run of currency.  (Unlike Iran, Portugal outsourced the printing of their currency.)  What transpired next was something unprecedented in the history of forgery.

The printer thinking it had a legitimate contract printed 200,000 banknotes worth nearly 1% of Portugal’s GDP. Alves used these notes to acquire yet more businesses, not the least of which was an attempt to buy controlling interest in the Bank of Portugal itself, in an effort to keep his scheme a secret.  The problem was that since Alves had flooded the country with bogus bills that were in all intents and purposes perfect forgeries, exposure of the fraud when it did come meant that not only did Alves Reis along with a number of notable co-conspirators, wind up behind bars, Portugal’s currency tanked as well.  The following year, a coup d’état took place that toppled the democratically elected government, replacing it with a military dictatorship that lasted for 34 years. Talk about winning the battle and losing the war.

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Whether it is something innately human about forgery or it is a matter of genetics nobody can say for sure.  After original sin, forgery ranks as one of the earliest and most tenacious of evils that lives in the heart of mankind.  Needless to say, even the Internet is not immune from fakery of many kinds.  As far back as the 1990’s, when the first search engines appeared, unscrupulous online entrepreneurs have used trickery in an attempt to influence search engine position.  Known as Black Hat SEO, so prevalent was the practice that search engines made major transformations in their algorithms to try to stop this blight.  (The process is still ongoing to this day.)

Just as with other countermeasures, for every technological action, there is an equal and opposite reaction.  What this means in terms of Black Hat SEO, is when such on-site practices such as keyword stuffing, URL redirecting and spoofing were outlawed, the black hatters turned their attention off-site by creating backlink farms.  When this practice was effectively eliminated, the black hatters turned their attention to creating fake reviews and recommendations.

Today we see the black hat community engaging in all sorts’ unauthorized activity. You see everything from the creation of fake company websites to fake social sites. Also included in such fakery is email phishing, fake review sites, fake followers, fake review posts, and fake review blogposts. The dark side is unfortunately alive and well online. There are even sites that tell anyone how to employ black hat techniques that are designed to besmirch a company’s reputation. This in turn causes the legitimate website to get flagged as using black hat techniques (even though they did not) which in turn could get them sandboxed (not showing up in search) or delisted (removed from Googles index).

Watch this PBS Segment on Fake Reviews.

There is even evidence that some well known review sites like Yelp and Ripoff Report are profiting by charging large sums to remove negative reviews.  Furthermore, some say that positive business reviews are being held hostage if they don’t buy adverting from the review site. Finally, retailers are starting to fight back. The media has begun the drum beat of reports, highlighted by the negative press on PBS special news casts.  This and many other articles are finally bringing the fraud into the light of day.

In a recent Newsfeed entitled, “Amazon Sues Fake Reviewers,” one of the world’s biggest e-tailers decided to sue more than 1,000 individuals on Fiverr.com who made a tidy living by selling phony reviews.  The article goes on to say that;

Courtesy of  commons.wikimedia.org
The lawsuit, filed in Seattle state court, follows Amazon’s actions in April when it sued another similar site that sells fake customer reviews. Because online marketplaces like Amazon and Alibaba allow anyone to review products and provide virtually any review, monitoring the reviews can be a tough task. “While small in number, these reviews can significantly undermine the trust that consumers and the vast majority of sellers and manufacturers place in Amazon, which in turn tarnishes Amazon’s brand,” Amazon said in its complaint.

While the newsfeed only mentioned Amazon, it leaves this writer to wonder how long it will be before Google follows suit?  After all, Google reviews are used by millions of businesses worldwide to generate position on the world’s most popular search engine.  Since the same people who can be hired to post fake reviews on Amazon could be retained to post bogus reviews on other review sites, including Google’s own, it stands to reason that fakery abounds online. 

What businesses who avail themselves of black hat technology don’t realize is that the powers that be don’t only reserve their wrath for the purveyors of the black hat craft. They routinely turn their gaze to the businesses who use it as well.  There are many prominent and otherwise legitimate businesses whose sites were either sandboxed or delisted by Google when they were caught in the black hat dragnet.  So it’s logical to assume that when the crackdown on fake reviews comes down, those caught with their hands in the cookie jar are going to pay dearly for their transgressions.

Other than fake reviews, another case of online forgery at its worst occurs during the run up to Christmas and Hanukkah every year, when cybercriminals spoof popular retail and shipping sites by creating fake websites that look identical to the real thing.  These online criminals will email unsuspecting victims to tell them a package is hung up in transit and the only way to get the problem rectified is to provide their credit card information.  Clicking on the link leads the intended victim to a clone of a popular website.  So convincing is this scam that tens of thousands of people fall for it every year.
Here is a short list of business tips you can implement to help combat negative and fake reviews. You can also learn more by reading some of our preview articles which discuss reputation management on our blog.

  1. Create a program and procedure designed to encourages and capture authentic positive reviews from happy customers. These reviews are worth the weight in gold.
  2. Document all reviews – especially the positive one. This way if a review site tries to remove them you have evidence to counter act their actions. Also these reviews can be used as part of a social media campaign to spread your good name. 
  3. Have a program in place that is designed to head off unhappy customers. Making a disgruntled customer happy is a great way to create loyal customers while also building positive reviews.
  4. Create a corporate culture of creating quality that strives to go beyond customer expectations. Creating satisfied customers doesn’t just happen. 
  5. Find and take care of good employees. Happy employees serve customers better and help make customers happy. Unhappy employees don’t make customers happy. In fact, they could be writing your next bad review.
  6. Avoid any kind of black hat trickery as this will ultimately hurt your online ranking and eventually your consumer rating as well.

It is my hope that we are finally starting to fight back against fake review and ransom review sites.  My advice for those considering using online forgery is to point out that while you might reap some benefits in the short term, over the long haul the risk isn’t worth the reward. Unlike many of the forgers who ultimately wound up behind bars when their scheme unraveled, today you need to be aware of what’s at stake when it’s fake. (Unless you want some multinational corporation to send you a subpoena.)

In this article I have provided a short history of some famous forgeries to give the reader a perspective on the current state of internet fakery that has been running amuck for many years. I covered black hat SEO including product and company rating fakery.   I also provided a short list of tips that can help businesses counteract poor ratings.

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If you found this article useful please share it with your friends, family and co-workers. If you would like to learn more about this subject, visit the notes page on this blog for the BlogTalkRadio show dated 10/27/15. I recommend checking out "Your Online Reputation Can Either Make You or Break You“, “Can Competitors Harm Your Business With Impunity Online?” and “Dirty Tricks Can Deep Six Your Business” You can also search for other related articles by typing in “casinos” in the search box top of this blog.

If you feel your business could use some help with its marketing, contact us at 904-410-2091,We will provide a free marketing analysis to help you get better results. If you'd like a free copy of our eBook, "Internet Marketing Tips for the 21st Century," please fill in the form below and we will give you immediate access to it. Your information is always kept private and is never sold. Don't forget to Plus us on Google+.

Carl Weiss is president of WorkingtheWebtoWin.com a digital marketing agency in Jacksonville, Florida that routinely works with bloggers and other online marketers to grow their businesses. 

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Social Networking Secrets & Best Practices – Part 1 - Two Sides of the Same Coin

Courtesy of  www.flickr.com
By Hector Cisneros

Have you ever wondered what the relationship is between face to face networking (aka word of mouth marketing) and social media marketing? Have you noticed all the similarities between these seemingly very different marketing venues? I mean, come on, with word of mouth you’re having a one to one meeting at a coffee shop and with social networking you’re posting current events in your industry, right? How could these two very different venues have any similarities at all? Well, in this series I will cover over three dozen similarities that these marketing systems have in common. It is my hope that once you understand the commonality of these venues, you will start to use them synergistically to gain more followers, prospects and long term loyal customers. In part one of this series, I will cover how these two systems are two sides of the same coin. In part two I will cover how both use the “Secret of Giving” and in part three I will explain how both require proactive engagement for your ultimate success.  

The following dozen bullet points cover the best practices and secrets that show the direct overlap of these two venues. Each one provides an explanation of why and how word of mouth and social networking overlap. Some will be readily apparent, others may require a different perspective so read each one a couple of times to see if the light bulb goes on. If you disagree, you will always have a chance at the end to vent your beliefs. So let’s get started.

Courtesy of  www.jisc.ac.uk
(1) Word of mouth marketing and Social Networking have specific rules that need to be followed to be successful. Concepts like “givers gain” (from BNI), tell instead of sell, cultivate instead of hunt.  When it comes to delivering an effective message, consistency, quality, professionalism, follow up, and follow through are all important. See my article the “12 Secrets of Social Media Success” and “How to Win Friends and Influence People in the 21st Century.” The laws of reciprocity are always in play in both venues. Others judge you more by your actions than by what you say, how you say it, or post it. Being congruent is very important.  

(2) All the rules that apply to Word of Mouth Marketing also apply to Social Networking (a.k.a., social media marketing). I wrote a couple of articles worth mentioning here. The first is the “Six Cardinal Rules of Social Media Success” the second was “Seven Secrets of Social Media Magnets”. Also the above two articles from item #1, also reinforces what I’m saying here. They can be found on our blog at “WorkingTheWebtoWin.blogspot.com.

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(3) Social Media is Electronic Word of Mouth - Social Media is an electronic version of Word of Mouth Marketing (a.k.a., social networking). From here on out almost everything I say about face to face networking also applies to electronic social networking. The only real difference is that the digital version of social networking makes things happen faster, goes further and has a bigger and wider impact. As a matter of fact, word of mouth networks and social networks work hand in hand every day. You can always find a word of mouth network spreading its message on a social network and you can find social networks spreading the word about the next networking event. Since business networking (a.k.a., Word of Mouth) works in conjunction with social media, make sure you coordinate your efforts so that both your face to face and your social networking are spreading the same message. Remember, both are viral, but social networking can spread your message faster, farther and over a longer period of time. This is a double-edged sword because it can spread both Good and Bad messages.

(4) No one ever joined a Networking group to be sold to. - They joined to connect with others, build strategic partnerships, to get help, learn and to get referrals from others. They often forget that to get referrals, they need to give referrals. Social networking is the same thing; except the message moves faster and is potentially more viral. People joined to get connected, find useful information, build relationships, and in some instances, to be entertained. Many businesses join because they want to make sales, get referrals and connect with other businesses. No business joined to be sold to either! Networking (face to face or digital) is all about them; not you. They are your referral partners, clients and prospects. Make them happy to earn your loyalty and trust. The same is true of social networks. People joined for their own reasons, which has nothing to do with your reasons.

Courtesy of  www.flickr.com
(5) Connect with those you're with. - When networking, make sure you connect with the people sitting around you. Ask them to connect with you on social media. Take the time to engage in meaningful conversations. Share with others what you learned and be ready to help them connect with others as well. Take the time to introduce your new connections to people you already know. This will pay big dividends later on, as you will see.

(6) For Networking, Influencers are the Key - If you’re posting to your social nets, provide high quality content that your audience is interested in. Minimize selling directly to your audience. Engage in fun, indirect selling by running contests, getting your best customers to provide testimonials, and engage influencers by helping them with their needs. Share the information that influences provide. If you’re in a face to face meeting help them with what they have going on. It won’t be long before they also come back to help you.

(7) Be proactive; help others first. - In both Word of Mouth and Social Networking, help others first, if you want to be helped. If you are waiting for others to bring you referrals, you’ll have a long wait.  Be proactive and extend a helping hand. It doesn’t mean you have to buy their product or service, however, it does mean that the help you provide them needs to be of “real perceived value” in the eyes of the person being helped.  If you can provide referrals to a member first, it gets the Law of Reciprocity in motion and then it’s just a matter of time before it comes back to you. This is also true for social media. Help others learn the ropes about using social media. Help them get connected to others. Show them where free help videos are etc. They’ll become loyal followers, friends and advocates for your business.

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(8) Trust comes before any business takes place. - To build a strong network that creates referrals, you need to focus on building trust and strong relationships. That is your primary mission when networking, whether it's by word of mouth or social networking. When meeting with people, it’s just as important to learn about them personally, as it is to learn about their business, product or service. Trust and strong relationships are not just based on business-oriented partnerships. As humans, we have emotional factors that are stronger than just logic or financial interests. Learn and remember the personal aspects of your referral partners and customer’s lives, it will bring you both closer together.

(9) Networking is about building relationship not selling products. - A common myth of networking is that your primary goal of the meeting is to sell to the businesses attending the meeting. The reality is you're there to build trust, credibility, forge strong relationships and create strategic partnerships. Once others trust you, they will buy from you if they need your product or service. However, having said that, you also need to make it easy for them to bring you prospects and to buy from you as well. Educating referral partners and prospect is a skill that cannot be brushed aside.

(10) Prepare in advance who you’d like to network with - When attending a networking meeting, it’s a good idea to have already decided who your target market is. I like to target two or three specific categories of businesses when attending any event. For example, my plan may include meeting a restaurant owner, a retailer with two stores, and a multi-location chiropractor’s practice. It makes it much easier to ask for a referral if you know who you’re looking for. Notice I did not mention I was intending to sell to them. My goal is to get introduced to them, engage them, and then set up a second meeting where we can find out if we can mutually benefit each other.

Courtesy of  en.wikipedia.org
(11) Being there is half the battle. - If you miss a networking meeting you not only lose referral and opportunities to meet people, you lose top-of-mind awareness and credibility for commitment. If you want to be successful in word of mouth or social networking, you must be present to win. Being there in person is mandatory for word of mouth marketing. Social networking requires a daily commitment to social interaction.  Word of mouth and social networking are active forms of marketing. If your mouth is not presenting at a networking meeting, it’s not delivering your message. If you skip a day of social posting, you fall off the timeline. In essence your message is not running.  

(12) We have two ears and one mouth The full use of these two to one ratios will directly affect your networking success. That’s right “two ears and one mouth”. I first heard Steven Covey say this in the 1980 I believe, yet most act as if the opposite were true.” Listening is very important. Without good listening you will miss referral opportunities, both for giving and receiving them. More importantly, you will miss opportunities to help others – which in turn won’t come back to help you.

In this article I have provided 12 specific secrets and best practices that show how word of mouth marketing and social networking and just two sides of the same marketing coin. The 12 best practices list provides the reader the top reason why these two venues are directly related. In essence, it is my belief that word of mouth marketing and social networking are just analog and digital version of networking. The main difference is the leverage, additional tools and speed that the internet provides. This in turn amplifies the word of mouth marketing message.

That’s my opinion. I look forward to hearing yours.

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This article is a part of a three part series. I recommend reading parts two and three as well to make sure you get the big pictures along with fine detail. If you found this article useful please share it with your friends, family and co-workers. If you have a comment or a different opinion, join the conversation by adding it to the comment section below. I recommend checking out "Six Cardinal Rules of Social Media Success" or "Seven Secrets of Social Media Magnets", “12 Secrets of Social Media Success “ and "How to Win Friends and Influence People in the 21st Century.".  You can also search for other related articles by typing in “word of mouth or social networking” in the search box at the top of this blog.

If you feel your business could use some help with its marketing, contact us at 904-410-2091,We will provide a free marketing analysis to help you get better results. If you'd like a FREE COPY of our eBook, "Internet Marketing Tips for the 21st Century," (in its 3rd edition), please fill in the form below. You will gain immediate access to it and as always, your information is always kept private and is never sold. Don't forget to Plus us on Google+.

Hector Cisneros is a partner, COO and Social Media Director for the award-winning, Internet-based marketing firm, Working the Web to Win, in Jacksonville, FL. You can connect with him on TwitterFacebookGoogle+,  LinkedIn,  and YouTube.  He’s also the co-host of BlogTalkRadio’s “Working the Web to Win,” where he and Working the Web to Win’s co-founder, Carl Weiss, make working the web to win simple for every business. He's a published author of three  books, "60 Seconds to Success"(available at Amazon and B&N), and "Internet Marketing for the 21st Century," which you can get by filling out the form above. He’s also the co-author of the new book, “Working The Web to Win,” which is now available on Amazon.com.

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Is Online Gambling a Bad Bet?

Courtesy of en.wikipedia.org
By Carl Weiss

Since its inception, the US government has tried to put a stop to online gambling. Yet it has failed to slow, much less stop its spread. With the emergence of paid fantasy football sites, which advertise their games on TV, not to mention New Jersey offering legalized online casino games, is it any wonder that this industry is anything but a bad bet to developers and operators alike? Still, the feds persist in doing everything in their power to put the brakes on one of the most lucrative online industries ever created. In today’s blog we will look at the evolution of the online gambling industry.

Courtesy of  en.wikipedia.org
The birth of the Internet and online gambling occurred at nearly the same time.  In 1994, the Caribbean nation of Antigua passed what was called the Free Trade & Processing Act, which provided licenses for online casino operators.   While providing a safe haven for online casinos, the industry did not exactly start with a bang.  In fact, by 1996 there were only 15 sites offering online casino games.  But as other countries began to bet big by legalizing, regulating and taxing Internet casinos, the tide was bound to turn.  As a result, by the end of 1998 there were more than 200 online casinos generating some $830 million in revenue. 

Curiously, none of these were based in the United States.  That’s due to the fact that while other countries were busy legislating online casinos, the US was doing everything it could to stamp them out.  Granted, in the US in the 1990’s there were land-based casinos in two dozen States, plus an assortment of gambling cruises plying the high seas, not to mention horse racing, dog racing and lotteries galore.  Still, the feds decided that the best way to deal with online casinos was simply to make them illegal. 
Courtesy of  www.flickr.com

That’s not to say that everyone from US based search engines to advertising agencies, magazines, newspapers and online payment portals like PayPal weren’t able to cash in on the online gambling craze.  It also didn’t mean that US citizens weren’t able to play for cash at online casinos.  They could and did in droves.  By 1999, online gambling was so prevalent that it caused the feds to put the first shot across the bows of the online gambling industry when the Internet Gambling Prohibition Act (IGPA) was floated in Congress.  While the bill worked its way through Capitol Hill, it puts casino operators on notice.

A Washington political insider also took notice.  Lobbyist Jack Abramoff was being paid $100,000 per month by a company called eLottery that wanted to sell state lottery tickets online.  The company was founded in 1993, betting that it would be able to create an online business that could be worth billions.  The problem was that no sooner had eLottery inked its first deal with an Idaho Indian tribe to begin selling lottery tickets, when the Justice Department invoked existing gambling laws to shut them down.

To make matters worse, by late 1999, the Senate had passed the IGPA and it was up for a House vote to become law.  If that happened, eLottery would be history.  Arrayed against the online gambling industry was virtually everyone on the religious right, from the Moral Majority to the Christian Coalition.  If Abramoff was going to save the day he was going to have to pull the legislative rabbit out of his hat.  Searching for some leverage in the language of the bill that would allow him to turn the tide, he seized on exceptions in the bill for jai alai and horse racing.  What happened next was Machiavellian politics at its best.

Courtesy of  commons.wikimedia.org
To quote the Washington Post, “To reach the House conservatives, Abramoff turned to Sheldon, leader of the Orange County, Calif. - based Traditional Values Coalition, a politically potent group that publicly opposed gambling and said it represented 43,000 churches. Abramoff asked eLottery to write a check in June 2000 to Sheldon's Traditional Values Coalition (TVC).  He also routed eLottery money to Ralph Reed, former head of the Christian Coalition, along with a number of other organizations, including Americans for Tax Reform; Traditional Values Coalition, and a Seattle Orthodox Jewish foundation, Toward Tradition.

Abramoff had previously paid Reed's consulting firms to whip up Christian opposition to Indian casinos and a proposed Alabama state lottery that would compete with the gambling business of Abramoff's tribal clients.  Abramoff's plan: argues that the legislation and its exemptions would actually expand legalized gambling.

On July 17, 2000, the Internet Gambling Prohibition Act went down to defeat, to the astonishment of supporters who included many anti-gambling groups and Christian conservatives.”

Of course, when it came to eLottery, it was a case of winning the battle and losing the war, since it never sold another lottery ticket again.  As for the warriors, Abramoff and several other players would eventually be prosecuted for their activities, including Speaker of the House Tom Delay who was indicted on September 28, 2005.  After his indictment, DeLay stepped down from his position as Majority Leader. He was the first congressional leader ever to be indicted. 
Courtesy of  en.wikipedia.org

You Can’t Tell the Players without a Scorecard

But the game goes on as they say and by 2001 an estimated 8 million Americans were partaking in
online gambling.  Despite the mostly ruthless legislation the online gaming industry would continue to flourish.  As well as Antigua and a number of other Caribbean nations, other countries that legalized online gambling include Australia, France, and the UK.  In Germany, online gambling is illegal with the exception of Schleswig-Holstein, which is the only German state where operators can apply for an online gaming license.  In some provinces of Canada online gambling is illegal, while in others it is not. In India, where online operators are forbidden, the Central Board of Direct Taxes in 2015 directed online poker players in the country to declare their money on foreign gambling sites.

Courtesy of  en.wikipedia.org
The problem with having so many players in the game with different rules is that legal confusion was bound to occur.  In 2004, after being threatened by the Department of Justice, whose broad interpretation of the Federal Wire Act contradicted the US Court of Appeals, the world’s two most popular search engines opted to remove gambling advertising from their sites.  In July 2006, the CEO of BetonSports, a company that is publicly traded on the London Stock Exchange, was detained in Texas while changing planes in route from London to Costa Rica, having been previously charged in a sealed indictment with violations of US federal laws relating to illegal gambling. That same year, Sporting bet chairman Jay Cohen was detained in New York City on a Louisiana warrant while traveling in the US.  Even though the US Appeals court stated that the Wire Act doesn’t apply to non-sports betting, the US Supreme Court refused to hear an appeal of Jay Cohen’s conviction since his company offered sports bets to US citizens.

Later that same year, both the House and Senate upped the ante by passing the Unlawful Internet Gambling Enforcement Act of 2006, which made it illegal for banks or other financial institutions to make transactions with online gambling sites.  In response to the enactment of the UIGEA, a number of online gambling operators opted to suspend real-money gambling with US citizens.  Others, including such sites as PokerStars, Full Tilt Poker, and Bodog vowed to continue serving customers in the US.

Courtesy of  en.wikipedia.org
In June 2009, the Department of Justice seized more than $34 million belonging to over 27,000 online poker players. This represented the first time that the DoJ had specifically targeted players as opposed to online gambling operators.  Less than a year later, on November 22, 2010, the New Jersey State Senate became the first state to legalize online gambling.  While the legally licensed operators are allowed to provide the public with online poker, casino games and slots, they were prohibited from accepting online sports bets.  They were also restricted to dealing with players who resided in New Jersey.  Are you confused yet?

If it Looks Like a Duck

Apparently at least three online poker operators were confused.  Especially when they were indicted in 2011 for accepting wagers from US citizens.  Furthermore, the indictment alleges the companies that were indicted sought to evade US law by disguising online gambling payments as purchases of merchandise. On July 31, 2012, two of the three companies indicted settled with the US Attorney for $731 million without any admission of guilt.
Logo of the Fantasy Sports Association.
Logo of the Fantasy Sports Association. (Photo credit: Wikipedia)

That being said, as of the writing of this blog, there is one chink in the government’s armor that several wily operators are currently exploiting.  I’m talking about fantasy sports where a number of popular operators are cleaning up at present.  To quote a Frontline blog,

“At the time, fantasy sports were a low-key competition in which bettors assembled their own teams, then watched how their players performed over an entire season. The legal exemption for fantasy sports was based on its definition not as gambling but as a game of skill. Today, fantasy sites offer daily contests, million-dollar prizes and bets on individual sports such as golf, mixed martial arts and Nascar races, magnifying the element of chance and making the exemption tougher to defend… The businesses of fantasy sports and online gambling are increasingly intertwined. Operators of online gambling sites have begun investing in fantasy sports, and some of DraftKings’ senior managers came from online gambling companies or were professional poker players. Some of fantasy sports’ most successful players are former poker players, too.”
Courtesy of en.wikipedia.org

Not only have fantasy sports operators like FanDuel and DraftKings become wildly popular and profitable online, you can see their TV spots airing during many popular sporting events, including NFL Football. It’s a wonder that the DoJ hasn’t gotten interested in an online game that according to the Frontline report grossed $43.6 million in entry fees from 7.1 million US players in a single weekend. 

While fantasy football leagues have to date remained off the government’s anti-gambling radar, the recent revelation that a few fantasy sports insiders had used inside information not available to the public to win big cash payouts has drawn the attention of the NY attorney general along with the FBI.  Whether this multibillion dollar industry will stand the test of time is anybody’s guess.  But I for one wouldn’t bet the farm.

In this article I have discussed how online gambling is trying to make its way back into the US internet arena. In particular I cover the ebbs and flow that has brought us to new online gambling in New Jersey and the latest online market – fantasy sports, like FanDuel and DraftKing. This latest foray will test the government’s resolve for squelching online gambling.

If you found this article useful please share it with your friends, family and co-workers. If you would like to learn more about this subject, visit the notes page on this blog for the BlogTalkRadio show dated 10/20/15. I recommend checking out "Who’s Watching Who In the Surveillance Society?“  You can also search for other related articles by typing in “casinos” in the search box top of this blog.

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Carl Weiss is president of WorkingtheWebtoWin.com a digital marketing agency in Jacksonville, Florida that routinely works with bloggers and other online marketers to grow their businesses. 

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