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 Random number theory

t doesn’t take a rocket scientist to figure out how easy it is for an unregulated online casino to not pay winnings, or to simply prevent players from accessing their accounts. But how do they stack the odds even more in favor of the house? 

Software for net-based casino games--blackjack, roulette, virtual slot machines--rely on what is called a random number generator: an algorithm in which numbers are chosen without a pattern of any type. You can’t tell merely by playing whether the software is truly random or not. Which means, in essence, you are relying on the integrity of the programmer. 

"If the person who created the algorithm is not licensed, and the algorithm is not reviewed by a regulatory agency, then there is no way to tell whether you’ve been cheated or not," Cabot says. 

To be fair, Antigua, which sells online casino licenses for $100,000 and offers a five-year corporate tax-free holiday, does require licensees to submit software to an independent auditor, but that is not the case at most other net-based casino locales. In fact, Gyneth McAllister, Antigua's spokeswoman for the Prime Minister and the Internet Gaming Industry, says that many virtual gambling operators who can't get a license in Antigua merely set up shop in Costa Rica, which is where Tradewinds' server is based. 

But Tradewinds isn't the only one that has engendered complaints from angry customers. Take Cyber Thrill, another cybergambling den which has a server in The Bahamas but processes payments in Montreal, Canada. At Rolling Good Times Online, an Internet magazine that keeps tabs on some of the more unscrupulous operators, gamblers have posted messages accusing Cyber Thrill of everything from cheating on the odds to preventing players from accessing their bank statements to refusing to pay winnings. 

In addition, Rolling Good Times details other online casinos with less than stellar reputations, like Sports International/Global Casinos, which the magazine urges its readers to avoid; Empire Casino; Sportsbook; and BingoWorld, which, it says, pulled a disappearing act. 

Gamblers aren’t the only ones to have a beef with Tradewinds. Atlantic Internet Entertainment (AIEE), which developed the software Tradewinds used in its casino games, pulled its product after Tradewinds insinuated that the software had bugs, and has filed suit in Palm Beach County Circuit Court in Florida, alleging breach of contract. 

Tradewinds claims it deactivated Atlantic's software because of significant, noncorrectable, problems. Significantly, the cybercasino has also posted a note on its web site, informing customers that it will no longer offer casino games, but will still take bets on sporting events. 

Although Tradewinds promises that all outstanding balances will either be credited to a player’s bank card or transferred to a Sportsbook account, only a sucker would give odds that all players will get what they’re owed. 

Online gambling proponents point to Australia, which is moving to legalize, tax and regulate. Australia's example could lead to a "branding" of sites that follow a code of conduct that is enforcable. 

"Australia promises greater credibility because its licensing and regulation process promises to be as stringent as the U.S.’," says gambling analyst Sebastian Sinclair. "This will eliminate the primary dampening effect on the market as cash flows into these legitimate businesses, and will leave the Caribbean-based casinos at a tremendous disadvantage." 

Such regulation would entail having software independently audited for legitimacy, as well as ensuring that players are paid what they are owed and in a timely fashion. 

Sinclair says he expects that the number of online casino swindles will grow until Australia’s online casinos are in full swing. 

"There’s a huge, latent, unsatisfied demand for gambling," he says, "and the Internet will let people do it from the comfort of their homes instead of having to hop a plane to Vegas." 

External links: 
Rolling Good Times Online Discussion Threads
Tradewinds Casino
Cyber Thrill Casino

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See also:

License to gamble
Starnet has a plan to become the Microsoft of casino software vendors.

Dirty money
Money laundering is one of law enforcement’s biggest fears about online gambling.