So far, online gambling is still a limited business. Nevada's new law only legalizes online poker. And for now, only residents of the three states that have authorized online gambling can legally bet online.
But many experts think online gambling is a multibillion-dollar opportunity. New Jersey alone projects state revenues from casino gambling will nearly double over the next year to $436 million, thanks in large part to online gambling.
With the online gambling table open for bets, nontraditional players are trying to get a piece of the action. For years now, social gaming companies -- including Zynga -- have offered virtual poker and casino games, with players wagering virtual currencies rather than real dollars. Now those companies are starting to move into what they call "real money" gaming.
"This is a huge opportunity for game developers," said Christopher Griffin, founder and CEO of Betable, a company that works with software developers to legally add real-money betting to their games.
Entry of those nontraditional players into the gambling market worries consumer advocates and addiction researchers. Research into the effects of online gambling is still spotty, but early studies indicate it attracts younger gamblers and is strongly linked to pathological gambling.
Some worry online social gaming companies, which have become experts at using social networks such as Facebook to market their games to consumers, could use those networks to target those most likely to be addicted to casino games.
"Lawmakers are failing to protect consumers in their mad rush to approve online gaming," said Jeff Chester, executive director of the Center for Digital Democracy, a consumer advocacy group. "Without safeguards, individuals will be subjected to powerful online marketing campaigns designed to have them gamble away their hard-earned cash."
Contact Troy Wolverton at 408-840-4285. Follow him at Twitter.com/troywolv.
Betting on the Web
For years, it has been illegal for U.S. companies to offer online gambling. But the situation is changing rapidly.
What's happening: New Jersey and Nevada last month joined Delaware in approving legalized online gambling in their states. The moves followed a change by the U.S. Department of Justice in 2011 in its stance on whether Internet gambling is prohibited by federal law. The states are authorizing online gambling to various degrees: New Jersey will allow all games; Nevada, only online poker. What's next: Other states, including California, are considering whether to make online gambling legal. For now, states can authorize gambling only within their borders. But a proposed federal law would legalize interstate gambling. Alternatively, states are considering creating one-by-one agreements with other states to allow gambling between their residents and companies. What it will mean: In states that have authorized online gambling, residents will be able to play online poker for money, buy lottery tickets online and play casino games such as slot machines or blackjack, depending on what their state has authorized. Social gaming companies, including Zynga, also hope to offer real-money wagering and prizes in their games. Some consumer advocates worry casino and social gaming companies will use sophisticated online marketing techniques to target young people and those most likely to be problem gamblers.
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