TESTIMONY OF DANIEL NESTEL
SENIOR ASSISTANT DIRECTOR
NATIONAL COLLEGIATE ATHLETIC ASSOCIATION
before the
HOUSE COMMITTEE ON BANKING AND FINANCIAL SERVICES
June 20, 2000
Thank you for the opportunity to testify on behalf of the National Collegiate Athletic Association (NCAA) and to share with you the problems related to Internet gambling among our nation's college students. The NCAA is a membership organization consisting of nearly 1,000 universities and colleges and is devoted to the regulation and promotion of intercollegiate athletics for over 330,000 male and female student-athletes.
The NCAA has long opposed sports gambling because of its potential to jeopardize the integrity of intercollegiate athletics contests and to threaten the welfare of student-athletes. Despite federal and state laws that prohibit sports gambling in nearly every state, this activity remains a growing problem on college campuses. In
recent years, NCAA institutions have suffered damaging point shaving scandals, have witnessed the spread of bookies on college campuses and have taken notice of
a growing consensus of research that reveals rates of pathological and problem gambling among college students that are three times higher than the adult population.
Clearly, sports gambling is not a victimless crime.
With the advent of sports gambling, it should not be surprising that that this activity presents a multitude of new potential dangers for young people. Not only are
college students Internet-savvy but they have nearly unlimited access to cyberspace. They can surf the Web in their school library, in a computer lab or in the privacy
of their dorm room. The emergence of Internet gambling now enables students to wager behind closed doors, in virtual anonymity. This new industry clearly opens a
multitude of new opportunities for young people to gamble on college sports while also increasing the ease of participating in illegal game fixing schemes. These facts
surely did not go unnoticed by the National Gambling Impact Study Commission that recommended a federal ban on Internet gambling one year ago.
Over the last few years, the NCAA has been contacted by a number of students who either witnessed or participated in Internet gambling on their campus. One
such student not only shared his story with us but also agreed to speak at several NCAA seminars this past spring in hopes of raising awareness among athletics
administrators. This student attends a large university in the mid-Atlantic region. As a sophomore, the student had a group of friends who regularly placed sports bets
with bookies on campus. Despite being exposed to sports gambling, it was not until the student saw an advertisement for an Internet gambling Web site in his school
newspaper that he was enticed to gamble for the first time in his life. What began as a $10 bet quickly escalated into a serious problem. The student soon was
wagering $500 on single games -- and he wasn't alone. Most of his friends, who previously bet with bookies, now preferred the ease and convenience of online
gambling. In just a few short months, the student was $10,000 in debt.
You might ask how does a college student get this kind of money? Today, all you need to place a bet online is a credit card and college students have no trouble
obtaining credit cards. Visit virtually any campus student union in the fall and you will likely see representatives of credit card companies handing out free t-shirts,
gym bags and other gifts in return for completing a credit card application. Studies indicate that over 70% of students have credit cards and 20% have four or more
cards.
The student in our story had several credit cards, each with a $5,000 credit limit. This despite not having a job or any credit history. I am pleased to report that the
student's story does have a happy ending. After amassing $10,000 in debt, he gathered up the courage and told his parents of his problems. His parents were
shocked but agreed to help him pay off his debts. Unfortunately, many of the student's friends continue to gamble today. They will graduate with more debt than they
can handle. Sadly, this story is not unique. It is representative of the type of problems that are occurring with more frequency on college campuses.
For the past 3 ½ years, the NCAA has strongly supported federal legislation to ban Internet gambling. As it applies to sports gambling, the activities of the 750 off-shore Internet gambling sites blatantly violate existing U.S. state and federal laws. However, these existing laws were enacted before the birth of Internet
gambling. As a result, legislation is now needed to address the rapid changes in technology. Already, agreements have been made with equipment manufactures to bring Internet gambling to wireless handheld devices. Imagine students placing Internet bets on their cell phones. In addition, Nevada officials are already warning that if federal legislation fails, U.S. casinos will likely enter this new marketplace. You can bet that Internet gambling will really take off if casinos like Harrah's work to establish its recognized brand name in cyberspace.
The NCAA believes that Congress should place a high priority on adopting H.R. 3125, the Internet Gambling Prohibition Act of 1999. If a bill is not enacted by the end of the 106th Congress, it is likely that the Internet gambling industry will present insurmountable opposition to any further effort to check its growth in this country. The NCAA is supportive of efforts to combat sports gambling on the Internet and believes that legislation prohibiting the use of certain banking instruments for Internet gambling is an appropriate supplement to H.R. 3125. As mentioned before, the widespread availability of credit cards provides the primary means for college students to participate in this potentially harmful activity.
In conclusion, the NCAA strongly urges the passage of legislation that makes it clear that the use of a new communications medium, the Internet, will not be permitted to violate existing gambling laws and policies. The time for action is now.
Thank you.