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FOR IMMEDIATE RELEASE: March 20, 2005

AS NCAA MARCH GAMBLING MADNESS BEGINS:

NEW SCHUMER FINDING -- THOUSANDS OF NEW YORK KIDS FALL PREY TO SCOURGE OF INTERNET GAMBLING EACH MONTH

Kids can log-on and lose thousands with no safeguards or protections

Schumer unveils sweeping four point plan to combat underage online gambling menace

This week, as NCAA March Madness kicks off and experts warn that online gambling is exploding in popularity, especially with New York kids, and problem gambling among adolescents is nearly three times the rate of compulsive gambling in the population-at-large, U.S Senator Charles E. Schumer today unveiled a new sweeping plan to stop online gambling sites from targeting minors. The online gaming industry has seen enormous upward growth in the past decade; in 1996 barely 30 sites existed, today there are nearly 2000 and none have enough safeguards to keep kids from playing.

“These online gambling sites think they have really hit the jackpot by targeting kids,” Schumer said.

“Kids today grow up surfing the internet and know now that, in addition to parent and school-mandated homework the web can now also be used be used for blackjack and poker.”

Online gambling is big business, especially with minors. Nationwide, the industry has increased exponentially in just a few years. Internet gambling pulled in $5.2 billion in 2003, up from $4 billion in 2002 and up from $1.1 billion in 1999, showing nearly 400% growth in four years. Gambling sites, because they are faceless, make it is far more difficult to deter minors from gambling. The websites can’t look at their customers to assess their age and request photo identification like in traditional casinos. Similarly, minors, many of whom are more tech-savvy than their parents, can and do devise methods of defeating age-verification procedures offered by some, but not all, on-line gambling companies.

The Annenberg Center at the University of Pennsylvania reports that nationwide, the number of regular young gamblers is nearly 1 million. Approximately 25,000 New York City minors and young adults between the ages of 14-22 have played cards online in the past month. Over 55,000 minors and young adults have played cards online throughout New York State.

Another study published in Montreal this year showed figures could be twice that. It found that 5.9% of people under the age of 18 had gambled online over the past 12 months. This translates to approximately 60,000 New York City minors and over 135,000 New York State minors gambling online in the past year.

Among college students the numbers are even bigger. According to a recent Gallup poll, gambling has become more popular among students, whether they play for fun or more seriously through poker games and sports betting. Many college students use their hard-earned money to gamble in poker games, casinos, pools and sports. In the last 12 months, 67 to 71 percent of college students have gambled their money in one of these ways.

“Unless we take the necessary steps to eliminate online gambling, more and more of America's young people will be return from college holding a receipt of outstanding debt, instead of a diploma,” said Schumer

Few of these sites have appropriate safeguards to keep kids from logging on to their sites and playing. The FTC reports that about 20% of online gambling sites contain warnings about minors. One study found that out of 37 randomly selected online gambling sites, a minor was able to register, play, and pay at 30 of them.

Online gaming sites are not the only culprits, kids don't have to look far to find internet gambling sites. Banner ads and pop-ups for casinos are everywhere on the Web, and often appear on sites popular with teens and even younger children. Many kids use sports betting sites where weekly winners are ranked and earn prizes. These sites are not considered to be hosting 'real' gambling activities because visitors don't play for cash. Nevertheless, kids learn how to bet on these sites, which also often link to online casinos.

“The bottom line is, not enough being done to keep kids from logging onto computers and anteing up,” said Schumer. “Online gambling is an insidious hobby that could haunt these kids for the rest of their lives.”

To combat this dangerous scenario, today Schumer put forth a new plan to stop minors from gambling online. Specifically his plan will:

- Demand that online gambling sites not accept credit card payments from minors and verify identity and age information against available databases of government-issued identification and age information. Credit card age-verification procedures are inadequate because almost all credit card companies allow minors to hold credit cards.

- Encourage the FTC to create and publish a list of gambling websites so that parents are better educated on what sites exist and are better equipped to ascertain where their children are playing. The FTC has a “Kidz Privacy” page, targeted toward kids and their parents; it is perfectly suited for a comprehensive list of gambling websites that kids could potentially access. That site would be able to warn both parents and children about the risks of gambling online.

- Urge University presidents to block online gambling through university internet protocol (IP) addresses. Universities can block access to certain types of websites by blocking it from their IP address. This critical step would ensure that students are unable to gamble online using university computers or if they are connected on any computer to university servers.

- Push online gambling sites to include warnings on the dangers of gambling addiction and links to help-sites such as Gamblers anonymous. Each site, under Schumer’s plan, would be required to put up labels to warn minors of the risks associated with gambling.

Research shows that young men gamble online at nearly 3 times the rate of young women and that introducing someone to gambling at an early age is particularly dangerous. Experts warn that problem gambling among adolescents is nearly 3 times the rate of compulsive gambling among the population at large. Gambling also has the potential to lead to other problems as kids continue to grow. The National Council on Problem Gambling reports that kids who gamble are 50 percent more likely to binge drink, 75 percent more likely to smoke marijuana and use tobacco.

Senator Schumer was joined today by Tom Kenney, Director of GamPro, a comprehensive gamblers treatment program (www.gampro.org).

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