LAS VEGAS--Cell phones are slowly being turned into one-armed bandits, a
panel at the Cellular Telecommunications and Internet Association (CTIA) industry
trade show here was told.
In Germany, cell phone users punch in a few numbers and play the
lottery; parlaying a trifecta at the Hong Kong Jockey Club is also only
a telephone number away; and in London one of the world's largest online
betting companies, Eurobet, offers a tutorial on how to turn a Nokia
phone into a betting machine.
Sweden's Net Entertainment, an online casino developer, is launching a
wireless casino game for WAP (wireless application protocol)-enabled
phones, some of which have already
hit the market. And in the United States, a family-owned business in
Colorado called wirelesswinnings.com is
testing a way to play blackjack and draw poker for cash winnings--all
from a cell phone.
Gambling on the Internet is nothing new. It's part of an adult
entertainment industry that Jupiter Research analysts say reaches
upwards of $6 billion a year. It was only a matter of time before the
wireless Web caught gambling fever as well. These wireless gambling
sites have appeared relatively unnoticed amid the chaos of a young
industry distracted by its own growth.
Alan Reiter of consulting firm Wireless Internet & Mobile Computing
said the wireless industry has yet to really face the issues surrounding
gambling. There are questions about what controls should be put in place, if
There are also the murky legal waters of whether a company in the
United States, where gambling is for the most part illegal, can even
offer such a service. The panel at the CTIA annual convention
is likely the first to try and address such issues about adult
It was also arguably the most controversial panel out of dozens of
others that tackled topics like mobile commerce and how to bill a customer
for content. In fact, sources said, the CTIA at first didn't want to
convene the panel, but ultimately relented.
"Unfortunately we haven't solved the problem," Reiter told a crowd
of three dozen. "But this is at least a start."
One of the panelists was Richard Ekstrand of Rural Cellular, a provider
with 600,000 customers in 14 states. His company generated about $356
million in revenue last year.
Rural Cellular is among the group of smaller providers that is feeling the
pinch of dropping cell phone rates and hoping to make up for it with new
services. The pressure to find new revenue sources, Ekstrand said,
is very real. Entertainment and even gambling are viable alternatives,
Because of their small size, Rural Cellular and other
smaller carriers "can be more creative, more aggressive," with their
content offerings, he said.
Ekstrand said he hasn't been approached by content providers to offer
gambling, but he is expecting the day to come.
"Frankly, I don't see what's wrong with it," he said. "It's real. People
are going to demand it. By making it available, are you encouraging
people to do it? No. You still have a choice."
The lesser of two evils
Ekstrand is facing his own choices, too. Given the option between
offering porn, which is growing in popularity on the wireless Web, or
gambling, he'd choose gambling. It seems the more socially acceptable of
"It's easier to deal with gambling than porn materials," he said. "It's
kind of like the argument between marijuana and alcohol. One is illegal.
The other is not. One is more socially acceptable. The other is not."
But others aren't so accepting. Ray Soular, chairman of SafeSurf, a Web
filtering company, is asking wireless sites to start offering ratings,
along the same lines as how movies are rated. The same type of rating system
never worked on the Internet, where the number of Web sites swelled into
the tens of millions.
But the number of wireless sites is still at a manageable level, so a
rating system wouldn't be too late, Soular said.
Charles Gertech, a director at consulting firm
Mainspring, said wireless gambling presents the wireless Web with
the "classic Internet problem" of whose laws govern what actions.
Because a consumer in America can access a Web site run in London, for
example, what laws apply? Is it the United States' strict gambling
rules or Britain's? The same type of issue was central in a legal case
against Yahoo, when a French court said it was allowing the sale of Nazi
memorabilia, which is illegal to do in some countries.
"That issue is not over, by a long shot," Gertech said.