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3/15/2002
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IT Confidential

Online gambling legislation took a big first step last week when the House Judiciary subcommittee on crime voted to approve a bill aimed at giving states the right to regulate Internet betting sites. The Combating Illegal Gambling Reform and Modernization Act, sponsored by Rep. Bob Goodlatte, R-Va., now moves for approval to the wider Judiciary Committee. The bill is an update of the 1961 Wire Act championed by then Attorney General Robert Kennedy that banned interstate gambling to stop its spread by organized crime. Gambling is regulated on a state-by-state basis, but online gambling sites, which can be located anywhere and are often outside the United States, fall into a legal gray area. Goodlatte's bill would let regulators close down sites found in violation of state law and stop credit-card payments to offshore sites. A federally funded study recently estimated that at least $1.6 billion was wagered over the Internet last year. In testimony before the subcommittee, Goodlatte said: "I think we can all agree that it would be very bad public policy to allow offline activity deemed criminal by states to be freely committed online and to go unpunished simply because we're reluctant to apply our laws to the Internet."

Speaking of online gambling, get your monitors fired up, because it's March Madness time! Websense, a San Diego vendor of Internet filtering tools, says lost productivity due to workers accessing sports sites during the NCAA basketball tournament will total more than $500 million. Online gambling on the games will represent $180 million in lost work. Websense says it arrived at those numbers through careful calculations based on third-party sources. Here's how. PC Data Online, a now-defunct Web research firm, estimated last year that 14 million people visited sports sites during March Madness. Research firm International Data Corp. estimates that 60% of all Web surfing occurs at work. That means 8.4 million users were surfing tournament information at work last year. According to Nielsen NetRatings, the Web division of the famous consumer-research firm, the average Sportsline.com visitor surfed the site for nearly 24 minutes during March Madness last year. Because there are more sites and more info available this year, Websense ups that to a half-hour per worker per tournament day. Tournament games occur on six workdays (March 12, 14, 15, 21, and 22, and April 1) this year. The Labor Department says the average employee salary is $20 per hour. So 8.4 million employees surfing sports sites during March Madness multiplied by six tournament workdays, multiplied by a half-hour, multiplied by $20 per hour means $504 million in lost productivity. For the online gambling figure, Websense says sports gaming site Sandbox.com estimates 3 million people worldwide entered online pools for last year's NCAA tournament. That means 3 million workers participating in online pools multiplied by six tournament workdays multiplied by a half-hour a day multiplied by $20 per hour yields $180 million in productivity lost specifically to gambling.

The first rule of online marketing: Don't spam lawyers. California's largest law firm, Morrison & Foerster, said last week that it's suing Etracks.com, a Belmont, Calif., E-mail service provider, for bombarding its employees with "unsolicited E-mail advertisements." The law firm says Etracks violated two California anti-spam statutes, one that makes it illegal to use the equipment of an online service provider (in this case, the law firm) to transmit unsolicited E-mail if the service provider has a policy against it, and another that requires E-mail advertisements to include the characters ADV in their subject lines. Ken Wilson, an attorney with Perkins Coie who's representing Etracks, says the company is a legitimate marketer that "doesn't support spam and takes offense at being characterized as a spammer."

What would the people who manufacture Spam (the food product) say about that? Can they sue for defamation of character? Is manufacture the right word--what is Spam, anyway? I'm so hopelessly behind on my E-mail, spam doesn't make a difference anymore. What would make a difference is an industry tip, which you can E-mail to jsoat@cmp.com (good luck). Or you can phone 516-562-5326. If you want to talk about online gambling, March Madness, or the special properties of Spam, go to InformationWeek.com's Listening Post: informationweek.com/forum/johnsoat.

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