From: tcmay@netcom.com (Timothy C. May)
Date: Fri, 3 Dec 93 01:38:45 PST
To: cypherpunks@toad.com
Subject: "High Stakes in the Living Room"
Message-ID: <199312030938.BAA15461@mail.netcom.com>
MIME-Version: 1.0
Content-Type: text/plain



"In the high-tech future of interactive television, gamblers could bet
against the house in the privacy of their homes, couch potatoes could
rake in the big bucks with the remote control adn the living room
could be transformed into a high-roller's paradise."

So begins an article by Benjamen Pimental in the Dec. 2, 1993 issue of
"The San Francisco Chronicle," an article entitled "High Stake in the
Living Room," page A1 (a page one story).

I tried to OCR the article, but newsprint is hard to get a good
accuracy rate on and I gave up after seeing a sea of errors to be
corrected.

Here are just some highlights:

- race tracks, lotto games, etc. being talked about. Quebec has
actually deployed it, So Calif. tried it to. Several companies (NTN
Communications, Videotron) are developing telegaming software and are
working with local gaming authorities and racetracks, etc.

- other groups are opposed, for moral reasons ("lose the house from
inside the house"), for entrenched-interest reasons, etc. 

- concerns about minors either playing by hacking the system or by
watching the unsavory practices of their elders

- beginning talk about the need for security--credit card accounts,
passwords, etc. (No mention of encryption, though.)

So, this is already starting up. Nick Szabo has written about his
ideas for "The Internet Casino" and telegambling. Sounds like others
are moving ahead.

There are some issues of great interest to Cypherpunks and Crypto
Anarchists:

* What happens to local gambling laws when gambling is just a phone
call away? (I'm certainly not arguing for local gambling laws, and
I'll be delighted to see them smashed by technology. My point here is
to analyze what will change and how the authorites will try to counter
the change.)

* What happens with remailers and mixes used to reach these remote
gambling sites? Casinos in the Bahamas could come "on-line" at almost
any time.

* Strong crypto means these gambling sites can be reached from
anywhere. 

(A potentially good way to "liquify" digital money: deposit dollars in
a Bahamian casino bank, access it via the gambling nets, withdraw it
or whatever in ATM machines. A formal alliance between certain types
of Cypherpunks and certain types of offshore casine operators could be
lucrative.)

* Will the  "Data Highway Patrol" (DHP) allow gambling packets to move
freely? (Scenario: Strong crypto is banned, somehow (?), because the
Data Highway Patrol--known affectionately as the "ClipperCHiPS"--needs
to make random inspections of "cargo loads." This scenario I expect to
happen if the NII goes through.)

...and so on. You get the drift. The Brave New World of strong crypto
will nuke most current laws about gambling, selling of information,
consulting, payment of taxes, zoning, practicing certain professions
without approval, and so on.

Interesting times indeed. 

Speaking of which, I'll be giving a public lecture on these topics
next Wednesday, the 8th, at 4 p.m., Skilling Auditorium, Stanford
University. More information should follow in a few days.


--Tim May

-- 
..........................................................................
Timothy C. May         | Crypto Anarchy: encryption, digital money,  
tcmay@netcom.com       | anonymous networks, digital pseudonyms, zero
408-688-5409           | knowledge, reputations, information markets, 
W.A.S.T.E.: Aptos, CA  | black markets, collapse of governments.
Higher Power: 2^756839 | Public Key: PGP and MailSafe available.
Note: I put time and money into writing this posting. I hope you enjoy it.