Facebook Faces Gambling Scrutiny

The federal government’s scrutiny of online gambling continues. Next subject of inquiry: Facebook.

The Madness
March Madness is upon us. Traditionally in this time of year, one of the most exciting and highly popular events takes off. This year as in every year, the top 64 college basketball teams take to the court to compete for the NCAA championship.

Along with the teams, millions of Americans enter a bracket of selections for the basketball tournament. This practice has been popular at offices and workplaces, college campuses and simply among friends, for years and years.

Basically, these involved paying an entrance fee, and the winnings split between those whose predictions are closest to the end results. The nature of the bets is guessing the tournament match-ups over the coming weeks.

Enter Facebook
As our friends, co-workers and college classmates have all made the transition to the Internet, namely to social communities, and specifically to Facebook, which counts over 100 million members worldwide, so have the March Madness pools.

Facebook makes meeting friends and keeping in touch so much easier. It takes this traditional gambling practice to a new medium and to new heights as well.

A simple search on the network shows there are about 20,000 online pools open for anyone to join. Not all involve cash bets, as some are merely for free play.

We have covered the relationship between Facebook and gambling in the past, with the widely popular poker applications on the social network.

Enter the Feds
It also caught the attention of the government, now considering prosecuting those who publish their brackets on Facebook for running illegal online gambling operations.

A violation of interstate wagering laws, the FBI calls it. That of course is against the controversial UIGEA law passed in late 2006, just before Facebook made its great leap and introduced such applications as the betting pools. Entry fees and prizes are two major components of online gambling.

In FBI spokesman Ross Rice words: "It is fair to say this raises questions. There could be a violation if there's a payout and if the operators take a cut."

Ironically, an FBI spokesman admitted, such a prosecution may be too big to handle. It is estimated that 48% of all workers play in an office pool. Prosecution or not – the chances are the FBI itself is involved in some such activity…

Enter Common Sense
Has the law passed one day in October a couple of years ago made half the population overnight criminals? Surely this is a bit extreme. Gambling is a part of American life, as in this case, and many honest, common and hard-working people around the world.

The un-stated political-economic motivation to ban online gambling in the United States, namely that money leaves America’s shores in doing so, does not exist in this case either. The money bet by Americans on Facebook actually stays in the US.

Madness Indeed
How the prosecution, and the tournament, will end is anybody’s guess.

Or not.