How Online Gambling Works

Online casinos are easily reachable through the Internet. In five seconds a search engine can come up with thousands of sites. Before spending any money on this past time, a would-be Internet gambler is well advised to learn about how it all works and how to evaluate the risks.

Most online casinos will let someone play for free with hypothetical money. This is designed to take the user down the learning curve towards a "comfort zone" that will permit the establishment of a real money account in due time. The idea is to make the player familiar with that casino's layout and procedures, to create loyalty early. Moreover, by identifying the tire-kicking player by user name and email address, the casino can start communicating with the potential customer as well.

It is important not to move too fast in this initial stage. For one thing, no one should spread an email address around the Internet casino industry unless he or she really wants to receive email traffic. Some players open a separate account with one of the large email servers (like Yahoo or Hotmail), just to quarantine gambling-related spam in a single account that can later be changed if necessary.

As it is possible to encounter fake sites and hackers as well as legitimate ones, do not provide any information to anyone over the Internet until you are sure the site is bona fide.

Another caution about the "free sample" approach to Internet gaming is that cyber-casinos have more control than real world casinos over the randomness of virtual cards or dice. The computer is even capable of studying how a person plays and then adapting the game to the player's style. The fair and honest casinos do not do this, even though they could. But the rare casino can have no compunction of putting a electronic thumb on the scales. They can make the player who is gaming with "free" money think that he or she will win quite a lot of "real" money when an account is opened and funded. To be sure, players should calculate the house's win rate over an extended period of play. In table games it should be no more or less than it is in real casinos, making adjustments for disclosed variations of game rules, of course. The house "vig" or "takeout" or "rake" should be no greater online than it is in real casinos for poker or bingo or sports and race book bets. If anything, the overhead should be lower, as the online casino does not have to pay for the drinks and staff and luxurious surroundings, the bands, the fireworks or any of the other benefits that accompany a visit to a casino made of bricks and mortar. Everything is virtual, and hence should be a lot cheaper.

Even though many casinos are honest, and audited, and of solid reputation, the analysis of their operations is on the "real money" side of the web site. Thus, if playing a casino game (which always has a negative edge for the player) causes your hypothetical bankroll to grow (rather than shrink) over a reasonably long spell of playing, interpret it as nothing more than a "come hither" glance from the casino server and not as evidence that you are a gambling genius.

Online Gambling Technology

One of the first conclusions a new online player will draw from playing several casinos with "free" money for a while is that the actual procedures and interfaces are very similar from site to site. The "look and feel" of the site may be unusual, as they each compete with the others for your attention; however, the mechanics of choosing a game, placing a bet and watching the outcomes are very similar across online gambling sites.

The functional similarity arises from the underlying software employed by online gambling sites. Probably fewer than 15 different software packages are in use today, and only a very few are widely employed. Like web browsers and word processing programs, these software packages have a high degree of common functionality. Computer programs handle some of these tasks in they way that they do just because there is only one obvious way to do them. For example, consider the financial side of things: the opening of an account, the making of a bet, the posting of winnings, if any, the display of current session winnings and total account balance. All of this is fairly obvious. How the information is displayed may vary from site to site, as that is essentially a formatting issue. But the existence of the information is pretty much standardized. In the background of the program, Casino operators may detect large differences amongst the various software providers in the management information provided and the options for house intervention. The user, on the other hand, will probably see none of this.

Other common features of all virtual casino software are security mechanisms to prevent hackers from altering values or procedures on the server, to identify and then later recognize each individual gambler, to ensure that minors do not get to open accounts, and (in most instances) to identify the gambler's location by the IP address.

The wide availability of broadband Internet connections has made the presentation of virtual casinos much easier and has added many new capabilities that were simply infeasible over 56K telephone modems. Some software still modifies its interface for slow connections, as parts of the world are still awaiting broadband. Since almost 7 out of 10 online gamblers are in the U.S., casinos may validly assume a high speed connection in most instances.

Online gambling Web sites offer a "downloaded" version of their interface software, which then permits games to be run without needing so much Internet speed. The player can also chose to play the games in their "Web application" or browser version, directly from the server. Adobe's flash software is a common example of such a medium.

To Download or Not to Download? The easiest solution is, of course, to experiment and decide after trying each system. Virtually all online casinos presume the player is in a Windows environment, rather than Unix or Macintosh. Mac users may be compelled to use the Web Application, as few if any Macintosh-compatible downloads are out there, but the Web application versions seem to run seamlessly on the Macintosh once the browser has been set up with the correct plug-ins. If the player does not have a broadband connection, the download option is just about required, since it renders unnecessary a repeat of the download at every logon.

If the player has a broadband connection and is operating under Windows, then both options are open. The download alternative involves a little more knowledge in the way of installation, setup and launching, but anyone who has trouble with that should probably not be on an Internet gambling site anyway. The Web application option is quicker and easier to install and launch than the download option. It does not occupy the same space on local resources, but then the download option is not a huge space hog either, at least by modern standards. The Web application does not require updating. It is always current. Updating a downloaded program is usually infrequent and fairly quick to accomplish. The Web application may require some compromise in terms of graphics and multimedia usage, but the difference will probably be hard to perceive. Some downloads permit users to express preferences and to customize configurations, something more difficult to achieve on the Web application side under current technologies. Downloaded programs can provide a greater degree of computer security to the user when compared to running the Web application through the browser. This should be a relatively small consideration when playing on trusted and reputable sites. Downloading software from untrustworthy sites is potentially a much greater security risk than running a Web application. So on balance, it really boils down to being a matter of personal preference and taste. The newcomer to online gambling should therefore try out the Web application versions of a couple of different casinos and then make a download or two to compare. This process will not only resolve the question whether to download the software, but will also help with the decision about whether to register as a player, and if so, at which casino(s). A survey taken in 2003 indicated that about 55% of users use the downloaded versions. This number is likely to trend downwards as time passes.

Casino Software as a Testimonial. Because any given casino always has to cope with questions of trustworthiness until it can build its own reputation and acquire a loyal following, it is common for the casinos to rely on the market acceptance of the underlying software package as a way of helping to prove the casino's own competence and honesty. Thus the software providers are themselves used as a means of promoting their individual casino clients. Sometimes the line between software developer and casino operator is even a little blurry. Of the several companies able to provide specialized software for online casino operations, the "big four" are:

Microgaming Software Systems Ltd. This company asserts to be the pioneer in "genuine" online casino-building with an introduction of a sports book to the Internet in 1994. Over 100 of the better-known online casinos use this software, including Fortune Lounge, 32Red, Vegas Partner Lounge, Golden Star Lounge, Carmen Media, Ladbrokes and Fairground Gaming. The Microgaming Software provides blackjack and roulette, several slot machines and video poker machines, and over 300 other games. Microgaming is headquartered on the Isle of Man. Its South African affiliate, Derivco, also develops casino games. They have linked a number of casinos using their software to be able to provide progressive jackpots on certain slot machines. Microgaming Poker is the online poker subsidiary, formerly known as Prima Poker. The software permits real people to play online against each other in a virtual poker room. Games include those offered in conventional poker rooms, plus a few more.

Realtime Gaming (RTG) is a Curação-based developer and licensor of "back-end" and "front-end" casino software, that is, for the presentation of games and also for casino management. They list over 50 leading online-casinos as their clients, including Bodog, said to be the world's largest. Acknowledged experts on gaming have complemented this software as being fast, clear, and easy to use. RTG has been active in the debate over the legalization of Internet gambling in the United States.

Playtech Cyprus Ltd. Was established in 1999 in the UK and now is a listed company on the London Stock Exchange. Playtech supports virtual casinos, poker rooms and bingo parlors with software packages for both casino management ("back-end") and game operation ("front-end"). BMM International, an Accredited Testing Facility (and consultant to gaming regulators), has certified the software, presumably indicating that it is both honest and competent to administer games of chance over the Internet. Casinos using the Playtech software include GoldenPalace, Betfred, Ritz Club Online, Maxima Casino, Christchurch Casino's Kiwi Gaming, Europa, Casino Tropez, Prestige Casino, and several others. The poker and bingo versions permit the networking of casinos online to provide additional players (or tables) with real time participation of many people at once. The poker room network, iPoker, uses the same "back-end" but permits individual casinos to present their own graphical interfaces to their players. Since the UIGEA went into effect, players physically present in the United States are not welcome on most Playtech sites.

CryptoLogic Inc was established in Canada in 1995 and has since moved to Ireland. The company's shares are listed on the London Stock Exchange. The Rivkin brothers had designed a secure online financial transaction system and were looking for a useful context in which to apply it. E-cash is a payments processing arm of the company. Software licensing is handled by the WagerLogic subsidiary. Clients include InterCasino (their first customer in 1996) William Hill plc, a prominent UK bookmaker, and Littlewoods Gaming. The software has been certified in a couple of important regulatory systems, including the Isle of Man and Alderney. Playboy's entry into online gambling uses the Cryptologic system, as does World Poker Tour.

Avoiding spam

Some online gambling web sites still regularly sell the email addresses of anyone who has signed up with them to other casinos and web sites. Creating a specialized gambling email address is probably the best workaround for the online player, as it can be abandoned if it attracts too much spam. Increasingly the more reputable online casinos will commit in advance that your email address will not be sold to other Internet entities. The more established casinos do not need the revenue such sales might bring in, and they are definitely more interested in customer loyalty. Thus it is a good practice to check out the email policy of a casino before signing on. Be aware that a casino might still share an email address with an affiliate (which would not be a "sale" of the email address), and may still periodically spam its own customer base; however, casinos seeking to cultivate a loyal clientele are aware that spamming costs them customers.

The Wager Offerings

Obviously, the business of being an online casino involves having people make bets using real money. Nevertheless, most will offer play with phony or hypothetical funds, sometimes referred to ironically as "free money." This offer is made in the hopes that the visitor will decide to take the plunge and risk the real thing.

Online casinos offer traditional casino games like blackjack, craps, baccarat, roulette, slot machines, and poker against other human players. Of the several hundred possible games and variations available online, the most popular are also those most commonly found in brick and mortar casinos. Online sports betting is also available, usually on the same sites or related ones. In the online world horse race and dog race betting is part of the "sports book." Some sites refer to themselves as "bookmakers" or simply as "bookies."

Blackjack (or Twenty-one) is a good starter game in an on-line casino and one of the most popular. The rules are the same as those in brick and mortar casinos; however, as many different procedural variations do exist, it is important to be clear on what the online game requires. These include such rules as whether the dealer stands on soft 17, whether re-splitting of aces is permitted, whether doubling is permitted after splitting, and whether it is possible to surrender (and if so, when). The new player should address the game just as in the casino; however, it is now OK to have a basic strategy chart in front of you to play. Using basic strategy the house edge is less than 1%. One might think that by card counting you can improve that edge, and because you are in your own home playing in your underwear, no one is going to throw you out of the casino for counting cards. The problem is that card counting starts over from each shuffle of the deck. Online casinos typically perform a virtual reshuffle before every hand. Therefore card counting is of no use for bet variation, and virtually useless for strategy variation.

Roulette. The biggest challenge of on-line roulette is simulating graphically the spinning of the wheel and the falling of the steel ball into the randomly pre-determined pocket. The actual game is rather straightforward to reproduce, as the outcomes are simple to calculate. Be sure to check the payoff schedule. With the schedule below, which is in wide use, the house advantage is a little
over 5%:

Baccarat. In a real world casino baccarat is played in elegant surroundings, often decorated by the casino with bejeweled women, a croupier in a tux, and red velvet ropes to separate the table area from hoi polloi. The table minima are usually too high for any but the highest of high rollers. A more down-to-earth version of the game, called "mini-baccarat" in Las Vegas casinos, is the one most often available online. The rules are almost the same.

Baccarat is a very simple game. On-line the game presents two two-card hands, one for the "banker," and one for a "player" or non-banker. Bets can be made on which of the two hands will win, or if there will be a tie. Winning bets "to win" pay 1:1. Winning bets "to tie" typically pay 8:1.

Hands are evaluated by adding card points, in which tens and face cards are zero, and aces through nines are counted at their numerical value. Totals over ten truncate to just the units, so 16 becomes 6. The winning hand is the one with a value closer to nine.

"Naturals" are two-card totals to 8 or 9. They always beat non-natural hands. If both hands are naturals, the higher hand wins or there will be a tie if they are the same. If only one hand is a natural, it wins. If neither hand is a natural, additional cards are drawn.

At this point, some online casino rules may differ from brick and mortar rules. One version is to give the player hand a card if its total is less than 6, otherwise, it stands. Then the banker is obliged to take a 3rd card if the total is less than two (if no draw was issued to the player hand) or less than seven (if the player hand received a draw). Another version simply makes a draw to each hand if neither one of them is a natural.

Either way, when the banker hand wins, it pays a "rake" of 4% or 5% for the house. Being "banker" is an option for a player, even online. Being "banker" is inherently more advantageous than being "player." Thus, considering the house commission paid by the banker, the house edge over the banker is just 0.6% (at the 4% commission) or 1.4% (at the 5% commission). Betting on the player hand gives the house an edge of 1.24%. These numbers will be a little higher or lower under different rule variations, but the range will remain much the same.

Craps. Online craps is a virtual dice game. Like roulette, the graphical simulation of the game device is a bigger technological challenging than the math, which is fairly straightforward. Online, the shooter takes his or her turn, just in a real world casino. Unlike "street craps" in which there is no house, online casino craps arrays everyone in competition with the casino. The shooter must bet on the initial or "come out" roll. The others in the game may bet, either with or against the shooter. (A bet against the shooter is called a "fade" by analogy to a rule in street craps that does not apply online.) If the shooter wins, he or she can keep on betting and shooting, or give up the dice. If the shooter loses, all bets are collected and paid and the dice rotate. Winning is defined as one of two things: rolling a natural (7 or 11) or rolling a "point" (anything other than a natural or craps) and then matching that point on a subsequent roll, prior to rolling a seven. Losing is rolling craps on the come out roll (pair of twos - "snake eyes" - or a pair of sixes - "boxcars.") or a seven on subsequent rolls before the point is made. Various bets and payoffs are available online, just as in the context of a brick and mortar casino.

Slots. The one area in which brick and mortar casinos are most like online casinos is in the slot machines. This is because modern slot machines are themselves essentially computers, using a random number generator to determine winners. If a machine is too stingy, that is, beneficial to the casino, it will discourage the players. If it is too generous, it will lose money for the casino. The correct business decision for online casinos is to "set" the "looseness" of the online slot machines so that players win often enough to want to keep playing, but not so often as to hurt the casino's bottom line. In brick and mortar casinos the slot machines are perhaps the biggest money makers for the house. Online casinos also make money on slots, but the margins are often slimmer than in the real world. One can determine what the online casinos have installed as "payback percentages" for their slot machines. In most cases, it is between 95% and 98%. In exchange for the negative long run expectation, players are supposed to enjoy themselves with the entertaining graphical interfaces and the prospects of "winning big." The allure of slot machines is that even though the long run prospects are dour, the short run might just cough up a big win.

Several casinos using the same software packages may group together to "syndicate" slot machines so that they simulate the progressive jackpots that can be found in the Las Vegas casinos, involving banks of interconnected machines.

Video Poker. Just as video poker has slowly been overtaking conventional slot machines in popularity in the real world, video poker has become a popular online past time. The mechanics of playing are fairly simple, and the player is pitted only against the house. There is no interactive play with other people involved, as in real poker online. Of all the machine gambling devices, video poker is the only one that involves a measure of technique or skill in playing. There exists a "basic strategy," as in blackjack, which, if followed in a disciplined way, can provide a positive expectation for the player under the right circumstances. The main variable is the payout schedule. Winning in the long run at video poker involves playing until a royal flush arrives. In the non-cyber world, serious players cruise around until they find a progressive machine with a jackpot above the break even level, whatever that is for the bets to be made. Then the machine is played until someone wins. Until a serious player wins the jackpot, the net of gains and losses from video poker will be negative. Players intent on playing video poker for profit have to be well-capitalized and very patient. In addition, it may not always be possible to find online video poker machines with the right jackpot or payoff schedule to justify the effort of the serious video poker gambler. For that reason, most online video poker players are there for the pure enjoyment of it.

Online video poker is played the same as if in a real world casino. The machine provides five cards for a poker hand, and the player has a chance to draw up to five cards to improve the hand. Under conventional rules, if the resulting hand is a pair of jacks or better, there will be a payment (credit). Otherwise, the bet will be lost. How much of a credit is given depends on the hand achieved. With the exception of the highest jackpot or payout, the payments are always less generous than the probabilities would merit. For example, a "flat top" poker machine might pay 9:1 for a full house, implying a 10% chance of achieving a full house after one draw. In fact, the chances of obtaining a full house on one draw are just over 1%. Machines that play "deuces wild" or some other variation will adjust the hand values and payoffs to fit into the probabilities of the various outcomes.

The payback on online video poker machines online is around 96%. Sometimes competition among casinos can improve this payoff, at least temporarily, on some sites. Several online casinos will link up with others to provide progressive jackpots. In that case, the serious gambler will want to calculate the "break even point" for the jackpot and then enter play only after the jackpot meets or exceeds that amount. The breakeven point is that payoff that gives the player a positive expectation for playing for the royal flush.

Poker. Whole books have been written on online poker. Of all the offerings of an online gambling site, poker is the most interactive and community-oriented. In all the other activities, from table games to slots to sports books, the communication is one-on-one between the casino and the player. (Increasingly, the technology permits players to "sit" together at casino table games like blackjack, baccarat, roulette and craps, but still the game is defined as player vs. house.) Poker is different. Here players from all over the world can sit down at a table in "real time" and play cards. The casino is merely an enabler of the event, and receives a "rake" of each pot (usually 5%). Unlike all of the other casino game offerings, skill determines the long run prospects for the player. "Skill" in this sense is both an absolute concept (like "being good") and a relative concept (like just being better than anyone else at the table).

The mechanics of online poker are not that much different from the details of signing on with any other online casino game. Each person registered needs to have a "handle" or "nickname" by which he or she is represented at the virtual table on the screen. All the other players, regardless of nation or time zone, and represented by their "handles" at the table as well.

Experts advise choosing the "handle" carefully, as it should not change, and is hard to change. This is because online players get to know each other by these handles, and maybe set up games in the future. Casinos want to encourage player interaction, as it tends to increase the action at the tables over time. It is possible to "chat" with the other players, using a form of chat or instant messaging software.

The dealer is not chatty. The virtual dealer just announces the game and the bets and reads the cards. Even the chips make a realistic sound when they are placed in the betting circle or are collected at the end of a hand.

Obviously, online poker is different from real poker in a couple of important respects. Many say that it makes online poker more challenging. The principal difference is the absence of "tells." By being unable to observe the other player - the pupils of his eyes or the tremble of the hand - important information is denied the player who is accustomed to reading body language as part of the game. Another difference is the possible pace of the game. In a casino, a Hold'em table can go through many hands in an hour. Online, the pace can be much slower, as the many different players may be doing other things at home while playing, and take a long time to act. If their connections are slow, this will add to the delay.

Another major difference between brick and mortar poker rooms and online poker rooms is the risk of collusion. Suppose two of the players are friends. They actually have a cell phone or a separate IM window open and are communicating about their hands to each other. This will give them each a noticeable advantage over the other players at the table. Online casinos are aware of this problem, and will enforce penalties if they notice anything unusual about how the players are playing. Poker software has evolved greatly so that the computer will become suspicious long before the rest of the players do. Nevertheless, the risk of collusion is always present to some degree in the virtual poker room.

Online poker was greatly aided by the astounding win in 2003 at the World Series of Poker by Chris Moneymaker. It was his first live poker tournament. All his skill at winning, and the money he needed to make it to the top, was acquired at online casinos.

Sports books. Online sports books had about a 5 year head start over Internet casinos. Two major differences between sports betting and casino games explain why: First, the outcomes of sporting events could be independently determined, so that gambling websites could not cynically distort the probabilities. Before people had confidence in online gambling sites, this was a major impediment to casino-like games, but sports events did not have this problem. Secondly, sports betting does not demand so much of the technologies that were in their youth in the 1990's, namely fancy graphical user interfaces and high speed Internet processing.

Today, an online sports book is also very much like a sport and race book in a Las Vegas casino. A gambler can browse the betting propositions available with a mouse over a "board" displayed on the screen. The placing of the bet interactively is straightforward as well. On football and basketball a choice might be to make a "straight bet" with a spread or a money line bet. Bets on totals are available, just the same as in the three-dimensional world. Bettors can "buy" half a point of spread if they wish. Exotic propositions will also be offered by the book on occasion, with the same wide range of expectations as the exotic propositions of brick and mortar sports books.

When it comes to horse racing, there are a couple of differences. Online "sports books" are also "race books" as that term is used in the Las Vegas casinos. Online sports books sometimes specialize in racing in another country, such as the United Kingdom or Australia. For the gambler with very specific interests, finding the right sites is part of the task of getting set up comfortably.

The other difference relates to pari-mutuel betting. At race tracks in the United States (and some tracks elsewhere as well) the betting pool is pari-mutuel, that is, the odds are determined by the public's action and not by the track's handicapper. Online sports books do not participate in the pari-mutuel network. To the wagerer it will all look the same, up to a point, as the sports book will accept and pay wagers at the track odds. However, two real consequences flow from not being in the track's pari-mutuel pool: First, a reasonably heavy bet in a lightly wagered race will not cause the track odds to shift adversely, as might happen, for example, with large "show plunger" bets or bets in dog races. But more importantly, the casino is underwriting the bet without having control over the handicapping. This is different from the usual pari-mutuel bet taker, in which there is normally little or no financial risk on the part of the track. It is also different from the usual sports bet, in which the book does take the risk, but it also controls the betting line. Because risk-without-control can create casino anxieties, a maximum bet limit may be imposed and also a maximum payout. This is probably not a severe limitation in normal races and bet sizes, but it can affect how a combination bet is paid, like an exacta. Even though the track might wind up paying 1500 to 1 on some winning exotic bet, the online casino will probably stop at something more like 300 to 1.

As in the case of brick and mortar casinos, the online books go to effort and expense to research and handicap all the sporting events offered. This is not done by some tropical native on the beaches of Tonga or Antigua. No, it is usually performed by service companies under contract to the books, which estimate the outcomes and spreads of sporting events for a fee. They may be the same entities in many cases as those that support the independent casinos in Atlantic City or Las Vegas.

For the player, browsing sports books electronically is faster and easier than hoofing it up and down the Las Vegas Strip to shop for good props. This is also true for the sports book. They tend to be aware of each other's terms, thus making it hard to find wide variations in odds. Still, it will make sense to shop a specific proposition if the gambler has particularly good handicapping or the right kind of information to make a winning bet.

The Procedures

At the highest level of generality all online casinos, poker rooms and sports books function in the same way:

A visitor to an online gambling website will decide to "sign up." After going through the establishment of username, password, location, age, etc., a player can often "play" the system hypothetically as a demo or start betting real money.

In the case of real money play, a deposit will be necessary. After login there is usually a "cashier" option that goes to the instructions for how to make a deposit. Some credit cards and debit cards can still be used to create a deposit, but more likely these days it will be necessary to use an on-line check or make a cash transfer, using a third party payment facilitator like Western Union or eWalletXpress.

Once the deposit has been made, then the player can then proceed to the book or table games or poker or bingo and play.

After playing, or in the case of the book, after the contest or race is over, the bets will all be settled in terms of the player's account, and he or she may then return to the "cashier" (by whatever name the site likes to use) and transfer funds back out. Alternatively, the player may leave the funds on deposit as a kind of bankroll for another session or wager later on.

A trend in online gambling is the presence of an independent entity to receive and hold deposits. As players want to be able to shop around at different casinos, books and poker rooms, they want a part of the "cashier" function to be performed by third party entities that will receive a money transfer form the player's bank and hold the funds for use at any one of many different participating casinos. Even though this approach is more secure and convenient for players, it has been resisted by casinos. For one thing, they do not get the float from the deposits, unless of course, they also own the third party payment mechanism. Secondly, they do not want players to pick and choose amongst casinos. They want loyalty! And finally, they want to be able to police how the bonus (or match play) money is used. If all the accounting were handled by an outsider, then the bonus money would have to go "hard" right away, and casinos do not want to let that happen. For them, the bonus money is a pump-priming resource, not something that the player receives as a gift and carries off to another place.

Nevertheless, the system of making deposits, collecting funds won, and making withdrawals is in a constant state of evolution, change and improvement. Players want to be able to maintain just one account, but play at more than one place. Casinos like the idea that players have to keep track of more than one account, as they might forget about some of the money, and they would prefer not to have to compete for players more than they already

In earlier days, especially when it was more common to use credit cards to process funds into and out of casino accounts, there was much discussion about how much time it took casinos to process the transactions - either on the way in or out. Often casinos were slow, either because it made sense to maintain a better cash flow, or because processing each transaction by credit card was a manual operation.

Casinos would sometimes come up with excuses for not paying winnings, or would delay the payment of winnings unnecessarily. In recent years, with the development of more elaborate software, the appearance of more mechanisms for payment, and the competition among the more respected online sites have improved this picture immensely. All three money transactions (deposits, returns and winnings) take place, as a general rule, without problems or delays. Still, it is important for a new player to be fully familiar with a casino's procedures and to check out the experiences of others before making any real money transfers. The record and reputation of different gambling sites is monitored. The ease and speed of getting paid is covered by many commentators on the Web in watchdog websites and user blogs.

Funds left on account at a web site from betting, say, in a sports book can immediately be put to use in the casino or poker room that may be co-located at that host site.

When a player signs up as a new user at an online gambling site, most of them will add an additional amount to the new account as a sign-on bonus. This is also sometimes called "match play" money, by metaphor to the match play coupons sometimes used in the real world casinos. The bonus amount may be fixed (like $30 extra) or it may be a percentage of the initial deposit (like 10% of any deposit of $500 or more). New players can shop around for the best bonuses. As with all the other aspects of online gambling, it is always a good idea first to read about the experiences of existing users through their blogs. There is perhaps a temptation to open an account, receive the bonus, and then close the account without engaging in any serious play. Casinos do not appreciate this approach, and most of them keep track of the action from players that have just received a bonus. Most of them have specific rules about how long the bonus must stay in the account, or how much action must occur in the account before the bonus "vests." Many casinos will not pay cash back to a player if that cash represents unused bonus money.

More about Transfers into an Account. After the UIGEA was signed into law, it became potentially illegal for banks in the U.S. to process funds into offshore gambling establishments, at least in specific ways to be identified by regulators. The law contained an exception for checks, however. So some banks permit an "e-check" (up to a certain amount and never more than $5,000) to be "written" online, just as people can pay a utility bill with online banking. Of course, this is not a recommended practice unless the casino enjoys the ultimate trust and confidence of the customer. The "payee" name used for the transaction is unlikely to disclose that it is an online gambling site. The e-check may take several days to clear, and this may hold up access to the real money gambling site.

Debit cards and credit cards may present a different situation from e-checks. Most U.S. banks that administer credit cards have blocked transfers to merchants known as gambling sites. However, some companies are still processing such transfers, and some sites have merchant codes that avoid being blocked. As a result, debit cards and credit cards may still work as a means of transferring a deposit.

In theory, third party payment companies like PayPal offer another solution. PayPal suspended its servicing of online gambling sites even before the UIGEA became law. Since then, NetTeller and Firepay, two other well-known third party payment services not based in the United States, have also suspended services to U.S. customers until the law is clarified or changed. Several other services do exist and may be used, including NUcharge, Click2Pay, ATMonline, ePassporte and Central Coin.

Finally, Western Union will make a money transfer, which is best accomplished through their website. A "control code" is issued that goes to the beneficiary of the transfer. The fees can be high, but if the deposit is large enough, many online casinos will refund the fee by adding to your chips. Transfers are usually limited to $1000 per month per payee.

Transfers out of an Account. The larger, more organized casinos can transfer funds back to the customer by the same third party mechanisms used to put money into the account (other than Western Union). If the debit or credit card was working, then the casino will just process a refund. Most often, however, a check is mailed out, requiring a week or more to arrive. Before paying money out, the casino will typically want a copy of some identification on file as a security precaution. Usually an eFax of a drivers license will do the trick.

Honesty

In The Wealth of Nations (1776), Adam Smith wrote: "It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love." This principle is doubly true for online casinos as well. The overwhelming majority of online casinos do not cheat because it is not in their self-interest to cheat. The money in Internet gambling is made in small amounts from lots of repeat visits from loyal, established customers. Internet casinos that have followed the dishonest business model have burned out and disappeared from view as quickly as they appeared.

Of course, a casino might be tempted to cheat if it thought that it could get away with it. Brick and mortar casinos spend a lot of money and energy because they assume everyone is trying to steal their money. They have one-way mirrors, closed-circuit televisions, guards, pit bosses and many other staff whose main function is to watch other staff. The rule is that no one steals from the boss. The player is probably the least of their worries. The same principle is true in the online world, except that staff does not (necessarily) have to spy on staff. The whole internet community is self-policing, at least up to a point.

For example, an online casino might understand that it can not be downright larcenous, risking all its established customers and its reputation. But it might think about engaging in perhaps just a little cheating. Perhaps no one would notice. Nowadays, the odds are very good that someone will notice.

No one complains about the inherent house edge in "honest" casino table games, or a "rake" of the pot in a poker room, or the "vig" on a sports book bet, but programmatic interference with or manipulation of the randomness of outcomes in games of chance is an absolute mortal sin. The watchdogs are many, and they are sophisticated customers of online gambling sites. In one noted episode, Michael Shackelford, well-known on the Web as "The Wizard of Odds," exposed Casino Bar, an Internet casino, which operated a crooked blackjack game. He figured out the ruse by comparing a large number of results of play from their website with those expected in a "proper" game. Casino Bar's business evaporated overnight.

Prominent and honest casinos are also aware that crooked web sites can easily and quickly pollute the fragile Internet eco-system of trust and confidence. As a result, there is a measure of "self-regulation" by competitors who monitor the newcomers for integrity. The software licensors also monitor both the casinos operating with their software and with competing software. They do not want their software's reputation to be sullied by a cheater, and they are looking for cheaters among new entrants using the software packages of their competitors.

Added to this is the ever-broadening protective umbrella of government licensing and regulation. While it may be true that Costa Rica and Antigua did not start out closely supervising its first licensees, these jurisdictions got the message early on: Licensing and oversight are essential to the industry's health. The Isle of Man, Cyprus and most recently the United Kingdom have developed regulatory criteria and a complaint mechanism to protect the public.

There is, of course, one big caution here: If the online gambling operation is illegal or unlicensed, then all bets are off. An illegal operation would be one in a jurisdiction like the United States. Ironically, such a gambling site would be the most dangerous, as it is obviously not in the industry for the long haul. Checking the licensure of a casino is relatively simple.

Naturally, new sites may take a while to learn the lessons of where their "self-interest" lies on the spectrum of crooked to honest. A new player is thus well-advised to check out the casinos of interest, concentrating at least at first on those that are most well-established or of longest-standing. Research on the Internet is quick and easy and will uncover many comments from users about how a particular online gambling operation is running.

The bigger issues in evaluating online casinos are (a) organization and competence and (b) capitalization. Since it is your money on deposit with them (whether you won it or just put it there), it is important that they be accurate and prompt in handling all the financial aspects of the operation. A casino in serious cash flow crisis will delay payments or even try to deny having to make them. This is an entity on its way out, with your money on its books. Usually there is nothing that can be done at this point. The lesson, therefore, is always to play at casinos that will not get into financial trouble. By starting out with those of the best reputations and largest scale, the issues of competence, organization and capitalization should not arise.

Another sin of casinos is spamming its own customers, either through the sale of the customer list or thoughtless promotional communications of its own. Casino reviews by users on the web identify those who proliferate spam. Increasingly such casinos are hard to find, as they do not survive long within a network as communicative and mutually supportive as the online gambling community.

Auditing of Log Files. To overcome the natural reluctance of players to send their money to strangers, a number of casinos hire actuaries or accountants to review the operating logs of the casino to determine if there is any interference with the "normal randomness" of games of chance. In other words, is there any cheating going on by the casino? The results of these reviews is disseminated online and can be inspected. Though it is possible that these outside audits and reviews can be staged theatrics, it is unlikely. Therefore, their existence should provide a measure of reassurance to the public, just as the online casino business had hoped and intended. Failure to have the log files audited is not a sign of crookedness, either. Such audits are expensive, and if the site already has all the other indicia of reliability and honesty, it may decide to dispense with the extra expense. That is the case, for example, with Bodog, the industry's leading constellation of Internet gambling sites.