SOURCE: San Francisco Chronicle

Thinking of going online and wagering on a few games in the upcoming NCAA basketball tournament? Uncle Sam doesn't want you to, but he's having trouble stopping anyone.

The government's latest effort to get Americans to stop gambling via the Internet has been largely ineffective, according to the online gambling industry.

In autumn, Congress passed -- and President Bush signed into law -- the Unlawful Internet Gambling Enforcement Act. U.S. lawmakers can't crack down on the online betting sites because most operate from foreign countries, so they instead moved to cut off the flow of money.

The law makes it illegal for American financial institutions, such as banks and credit card companies, to transfer funds between U.S. citizens and online gambling sites that offer sports wagering, poker or casino games.

If online gamblers can't get money to the online sites to gamble with -- and more importantly, can't collect their winnings -- they'll stop gambling, lawmakers figured. They figured wrong.

"Some people have stopped betting on sports online because of (the law), but savvy bettors know how to get around the law," said Russ Hawkins, an expert on the online sports betting industry.

Hawkins runs MajorWager, a website that doesn't offer sports betting but presents news and information about the industry, as well as advertising for online sportsbooks.

As he is in regular contact with more than 40 Internet sportsbook operators around the world who buy advertising on his site, Hawkins knows what's going on in the online sports betting industry.

"The number of people betting online on (the) Super Bowl was down about 35 percent from a year ago," Hawkins said.

"I expect to see the same drop-off for the NCAA basketball tournament," he said. "But within a year, I expect online sports betting levels to be back to normal."

Online sports bettors from the United States who used to use credit cards, bank wires or Western Union cash transfers to fund online sports wagering accounts could no longer do so after passage of the Internet gambling law, Hawkins said, so most bettors simply adjusted and started using foreign payment methods instead.

Internet money-transfer services -- known as e-wallets -- based outside the United States were more than happy to pick up the slack left behind by U.S. financial institutions controlled by the new law, he said.

"Eventually, Americans will not use American currency to make wagers online," Hawkins said. "That's ultimately how to beat the government crackdown.

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