Gambling over the Internet works; the economics of the industry show this to be true. Despite its success, the economics of Internet gambling is sensitive to market conditions that are caused by external forces. In many ways, Internet gambling faces the same obstacles as other markets on the Internet. A person buying books online may have the same concerns as to the security of his personal and credit card information as a person who creates an account with an online casino using his or her credit card. In other ways, Internet gambling faces unique challenges created by its pariah status. Unlike the inroads that the Internet will make in delivering communications, news and entertainment, Internet gambling opportunities face, perhaps, a rockier road. Internet gambling is fueled by an overwhelming unsatisfied demand from consumers. Moreover, this demand is represented by those consumers placing money at risk for the opportunity to win a greater sum. This combination of money and vice invites attention from two distinct camps; governments that are not fond of the activity and hackers and cheaters who hope to realize a score from an industry with crippled legal recourse. In this light, Internet gambling faces the following four major obstacles:
• providing an adequate system for funds transfer;
• securing the gambling transaction from hackers;
• overcoming concerns of the operator’s integrity; and
• overcoming legal issues.