Tico Las Vegas - online gambling from Costa Rica

Latin Trade, June, 2000 by Julie Dulude

Online betting sizzles at the world's Internet-gaming haven, Costa Rica.

GAMBLERS WITH A PENCHANT TO bet on the unusual could lay wagers on Ricky Martin's true sexual tastes, the fate of Cuban refugee Elian Gonzalez or whether Hillary Clinton finally trades Bill for her career, or for another woman.

All bets were on recently at Inventabet.com, a Costa Rica-based online gambling site that typifies the exploding popularity of Internet gaming south of the virtual border

Lured by visions of easy riches, U.S. entrepreneurs are flocking to Costa Rica to avoid the 1961 U.S. Federal Wire Act that makes online gambling illegal in their home country (see story on page 74).

Yet such distinctions are becoming more and more irrelevant with new cyber-casinos just a mouse click away. "There are more people in Costa Rica doing this than anywhere else in the world:" says Joe Gallagher, the owner of All Sports Network, a Dominica-based gaming consultant.

Since virtual casinos first appeared several years ago, the industry has grown tremendously Between 1997 and 1998, the number of online gamblers increased from 6.9 million to 14.5 million, while annual revenues more than doubled from US$300 million to $651 million, according to a report by New York- based gaming consultants Christiansen/Cummings. The study predicts there will be 43 million gamblers--mostly from the United States, Canada and Asia--generating $2.3 billion in revenues by 2001.

"Internet gambling is the next step in interactive entertainment," says Robert Simmons, manager of the San Jose-based Offshore Sites, a firm that helps fledgling gaming websites with everything from legal assistance to technical support. "When you sit in front of a computer at a virtual casino playing poker, it's just like a real poker game, with all the excitement of a regular casino except you can sit in your underwear and don't have to deal with smoke and unpleasant personalities:'

Consultant Gallagher says Costa Rica is popular in part because it costs less than $10,000 in government fees to launch an online gaming venture. In the other popular destination--the Caribbean--official start-up fees can run as much as $250,000 plus hefty annual fees. Moreover, San Jose has a reliable telephone system and no shortage of multilingual employees.

Mandarin speakers wanted. While it's difficult to estimate how many online gambling firms have been established in Costa Rica, industry insiders say there are at least 125 virtual casinos and sports betting websites with names such as Casablanca Sportsbook & Casino, Betmaker, Casino Earth and E-Vegas.com. While the bigger companies are typically located in a sleek, downtown skyscraper and are believed to be conducting as much as $15 million in gambling a month, the smaller enterprises are run out of private residences or a one-room offices and book about $100,000 a month, experts here say.

The online wagering industry employs some 3,000 workers. Greg Champion, CEO of North American Sports Association (NASA), one of Costa Rica's largest online gambling sites, says many of his 350 employees are students paying their way through college. They earn $4 to $5 an hour for accepting bets over the phone in nine languages, including English, Spanish, German, Japanese, Italian and Portuguese. He is also recruiting speakers of Mandarin, Cantonese and Russian.

NASA occupies two floors in the downtown San Pedro mall. Its 30,000square- foot office includes a day-care center, gym, cafeteria and a plush-carpeted living room equipped with a 60-inch television. Champion's spacious office offers a scenic view of the central mountain range.

"Our sales have tripled every year," says the 41-year-old Champion, who refuses to discuss dollar amounts. "During a big sporting event, phones generally ring off the hook."

Champion, who moved his sports betting operation from the Caribbean island of Aruba to escape that island's hefty phone bills and lack of office space, hopes his luck won't run out anytime soon.

Jose Manuel Echandi, president of the Social Protection Board, the government agency that operates the national lottery, argues that online gambling is illegal since the nation's Gambling Law of 1922 grants the government a monopoly over lotteries and, hence, all gaming activities. In 1997, his agency filed charges against three offshore companies. Those cases are still pending.

Many legislators here agree that the current law is outdated when applied to the Internet. "The spirit of the law says it is illegal," says Rafael Arias, a congressman for the National Liberation Party. "But they [Internet gaming entrepreneurs] take advantage of loopholes."

Sports websites register as data processing companies and virtual casinos argue they respect the governments monopoly by using filters to weed out local Internet providers and keep ticos, as native Costa Ricans are known, from placing bets. "Anything that isn't clearly designated as illegal is considered legal," says Costa Rican Rolando Soto, a veteran corporate lawyer.