US horseracing industry hurt by Internet gambling - ESPN story

[The Buzz]

ESPN.com posted a story about the Internet gambling industry in Costa Rica, and how it is affecting the horse racing industry in the US.

Despite its robust presence in much of Latin America, there is no racing in Costa Rica, which is the world's capital of Internet gambling, a virtual and invisible Las Vegas without boundaries and with great global reach. In otherwise nondescript office buildings in San Jose with roomsful of computers and telephone operators as well as tiny offices in private residences, more than 200 Internet gaming enterprises are doing a brisk business with players of every persuasion in virtually every corner of the earth but primarily the United States, despite the best efforts of government to thwart wagering in cyberspace.

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The U.S. ban of Internet wagering based upon the belief that such activity violates the U.S. Wire Act, has done little to curtail the activity of American professional horseplayers who operate at a level at which the rebates of up to 5 percent offered by off-shore enterprises are meaningful at the bottom line. Efforts to stem the flow of money to offshore accounts amount only to inconvenience. Some racing associations have taken meaningful financial hits by closing U.S. pari-mutuel pools to off-shore sources of revenue -- rebate shops, as they were known -- that once were permitted to co-mingle handle, losing simulcast fees as well as portion of the takeout.

While opposition to Internet gambling in all its various forms in the U.S. has come primarily from the conservative Christian right, the Costa Rican government, never an institution that has sought to legislate morality, has facilitated the industry's grown by providing fertile ground.

It costs less than $10,000 in government fees to launch an online gaming venture here. In the other popular locations for such enterprise, primarily in the Caribbean, official start-up fees can run as much as $250,000 plus substantial annual fees. San Jose also has a reliable telephone system, Internet infrastructure and no shortage of educated, multilingual employees. While larger companies are typically located in downtown office buildings and are believed to be handling as much as $15 million a month in sports, racing and other activity, primarily poker, smaller one-room enterprises are said to be handling about $100,000 per month. The online wagering industry employs about 3,000 people here.

An interesting read ... full story here ... http://sports.espn.go.com/sports/hor...aul&id=3244541

[bonustreak]

Nice find, thanks