UK Seek Online Gambling Direction

In the UK, the United Kingdom Parliamentary Select Committee for Culture, Media and Sport are currently having talks in relation to online gambling regulation. With the objective to give the industry some direction of how to regulate the online world, there is particular interest from Gibraltar and Alderney due to the island’s being able to operate and advertise within the British Isles but avoid UK taxes. However, with the UK considering secondary licensing, both islands would discover direct regulations changes, with the spokespeople for each destination having opposing views.

Alderney Authority for Tighter Regulations

In Alderney, the spokesman for the Alderney Gaming Control Authority revealed that they wanted to tighten regulations with immediate affect. Andre Wilsenach said that licensee operations needed to be very carefully assessed before given the go ahead, particularly due to the island’s Full Tilt Poker having been found in violation of its license conditions last year. Alderney’s gambling authority suggested that licensees should be given a risk factor, determined by their financial processing arrangements, the licensing jurisdiction that they were under, where the operators did business and a number of other factors. This would allow online operators with a higher risk to be more closely regulated by auditors, with venues paying the costs of having quarterly auditing conducted.

Gibraltar Concerned with UK’s Lack of Experience

Whilst Alderney calls for more regulation, a spokesman for the Gibraltar Gambling Commission, Philip Brear, said that the island was disappointed with UK’s lack of experience. Whilst the UK and Gibraltar have established a gambling relationship, Brear stated that it had not been as productive as hoped for and that, because the UK Gambling Commission had far less regulatory experience than Gibraltar, regulatory changes being talked about could be restrictive.

Gambling Prevalence Statistics

Meanwhile, whilst the talks continue over the direction that UK gambling operating regulations should take, the Gambling Commission has revealed its latest statistics for gambling prevalence. Whilst the UK online gambling market was worth around £1.9bn in 2010, it was shown that most people gamble at overseas establishments. Just one third of those who gambling online use British websites, with the past two years seeing a 19per cent fall in casino games and casino because many UK brands have moved offshore.

U.S Stand on Intrastate Gambling

Meanwhile, in America, concerns have been raised over the legislation of intrastate online gambling. On December 23^rd, 2011, it was revealed that the Department of Justice (DoJ) was considering that intrastate online gambling could be legalized. The gambling industry welcomed this news, with six or so states believing that they would be able to have operations up and running by midway through 2012. However, with only three weeks passed since the DoJ’s comments, many experts are now saying that the authorities view may be far too simplistic, and there is still a long way to go before online gambling can see an American resurge.

Cautionary Note from Gaming Analyst

One of the first notes of concern came from Deutsche Bank gaming analyst, Andrew Zarnett. Preparing a report on the change in online gambling legislation to show investors, Mr. Zarnett expressed that the intrastate legalization had been misplaced and hyped-up by those who wanted to push the changes through. He made it clear to investors that the only change was that there would be a discussion on intrastate gambling, instead on having uncertainly whether talks would occur at all. He added that there had been no clear indication on the forms of gambling which could be legalized, nor how long the legislation process would take. Zarnett also referred to history as showing that, if legislation goes ahead, it is likely to be on a state-by-state basis.

Nevada Attorney Speaks Up

In one of America’s most notorious state’s for gambling, gaming attorney in Las Vegas, Jennifer Carleton, said that the announcement by the DoJ was a step forward to regulating online gambling, even though there were still concerns surrounding the issue. Ms Carleton urged parties to be proactive, attentive and alert in their response to the December findings, though warned that future discussion by the DoJ could reverse the interpretation that many made of the statement made in 2011. For Nevada, steps have already been made to fast tack legislation should it go through, with online poker regulations already being approved on December 22^nd, 2011, in an effort to being intrastate gambling as soon as allowed. Mark Lipparelli, Nevada Gaming Control Board Chairman, revealed that ten casino operators, manufacturers and equipment providers had already put in license applications, adding that the time it would take to issue the licenses was unclear.

South Point A Major Player

One such license request was from South Point Hotel Casino and Spa. Owner Michael Gaughan already operates an online free-play poker website, allowing players to win noncash and cash prizes which include South Point casino trips, where winners can indulge in love poker events. However, Mr. Gaughan has said that he believes intrastate gambling will not be possible for many states with small populations, especially Nevada. Here, online poker rooms would not be able to create enough money for viability, making interstate gambling vital.

Online Gambling Uncertainty

There remains a huge amount of uncertainly surrounding online gambling legislation in the US, even when it comes to intrastate possibilities. Whilst the DoJ’s latest remarks may have been welcomed by many gambling authorities, there remains a long way to go before operations become available for consumer use. And, though many may have seen fit to put through bills to get online operations working as quickly as possible, it may be many months before anything materializes.

Earlier this week, in a relatively close vote of 299 to 223, France’s National Assembly passed a new bill which will pave the way for popular online gambling activities like cash poker and sports betting. The bill is now on its way to the European Commission where it is expected to be approved in April. From there the bill will move on to the French Minister who is likely to sign off on the new laws in May, allowing near-immediate implementation nationwide.

It would be nice to say that French legislators finally saw the light, but it’s more likely that what they saw was green. With one of the most popular sports betting events – the World Cup – fast approaching in June, the National Assembly seemed all too eager to push through the once-controversial legislation which should coincidentally be in place just in time to allow the country to profit from remote betting for the event.

In the past, France has only allowed online gambling through approved national operators. Though this new legislation will ideally open the market to more outside operators, finally giving French players their choice of online poker rooms and casinos, many private companies still fear that France will cling to its national interests by continuing to openly favor French-owned operations. These concerns aren’t entirely unfounded, especially since the French-based Mangas Gaming group was the first to profit from new advertising deals.

Reuters released a comprehensive French online gambling market overview on the heels of the National Assembly’s positive decision, and by all accounts the potential profit margin for operators based outside of France are grim, what with continuing restrictions on popular games like roulette and blackjack. Still, such operators remain optimistic about their prospects in France. Leading bookmaker bwin – which only four years ago faced legal action in France for illegal gambling charges – is only days of away from relaunching French access to their sites.

Potential Revenues

The foreign countries where many online casinos operate openly embrace the internet gambling industry.  Operators pay these governments thousands of dollars to obtain gaming licenses in addition to taxes and other expenses.  Antigua, Grenada, Gibraltar, Curacao and the Dominican Republic are just a few of many small countries whose economies have received a significant boost from the online gambling business.  While the UK government does not regulate these offshore casinos, not all are corrupt or looking to cheat players.  Conducting business in general over the internet is risky whether the government is involved or not.  However, the online gambling space is becoming much safer and as a result, more trusted by UK citizens.

Proceeding with Caution

Due to the fact that offshore casino operators are not subject to scrutiny by the UK government, players need to be more cautious than ever.  Even though the country is more open to the internet gambling industry, if someone happens defrauds you, it will be very difficult to prove your case to any type of authorities.  Therefore, the best approach for UK players to take is to “wager with caution.”   Also keep in mind that all online casinos exist to make money by attracting as many new players as they possibly can.  The only way this can be achieved is by offering an honest service and establishing a good reputation.   If it starts to become known that the casino is not paying out winnings or involved in other questionable practices, word will travel fast and damage any credibility they have established.  The good thing is that most casinos, with the exception of the fly-by-not operators, have proved to be safe and reliable.

If you are someone who is concerned about transmitting sensitive personal information such as your name, address and credit card numbers over the internet to an online casino, you must understand the same risks exist when doing business with  other companies whether they are licensed in the UK, involved in the gaming business or not.  The internet can be a haven for criminal activity and not even legislation and regulation from the government can stop it from occurring.  Fortunately, reputable online casino operators take every to ensure that the information you share with them remains private and secure.  This is made possible by the use of secure servers and encryption technologies that protect data and prevents hackers from intercepting and thieving confidential information.

A controversial treaty

The German Interstate Treaty on Gambling resulted in a ban of online gambling in the nation except for horse racing. The treaty was enacted on January 1, 2008. The legislation has been controversial on many fronts. It is viewed as a monopoly that is in violation of European law. A major European betting association, EGBA, has indicated that Germany’s policy is not in accord with Article 49 of the Treaty of Rome. According to this treaty, the rights of its members to allow access to online gambling are being denied. Two of these companies, Bwin and Unibet, have been vocal in their desire to see German’s current legislation be reversed.

All states must agree on law

The current legislation is set to expire on January 1, 2012. This type of legislation requires that all 16 states in Germany are in support of the law. One of the states has come forward to express their dissatisfaction with the German Interstate Treaty on Gambling after initially backing the bill last year.

The Schleswieg-Holstein state in northern Germany is now against the treaty. The Liberal Party and Christian Democratic Party in the state are looking to get the ban canceled. According to Jürgen Koppelin, the leader of the Liberal Party in Schleswieg-Holstein, an intrastate licensing system would be introduced, if the other 15 states can’t agree on reforms for the current legislation.

The supporters of the German Interstate Treaty on Gambling have argued that the legislation serves a very important purpose in the country. They argue that the monopoly is a form of protection for the citizens of Germany. In their view, the law is designed to protect consumers from problem gamblers to children.

German gaming lawyer Martin Arendts said that “the argument that only a monopoly can protect customers, prevent problem gambling and guard against fraud would not hold any more.”

Restrictions causing more harm than good

Germany is just the latest example of a country that has seen its gambling bans cause more harm than good. The United States, Australia, France and Russia have also enacted controversial gambling bans over the last few years. Most of these legislations have prevented free trade in the market.

The growth of online casino gambling isn’t expected to slow down anytime soon. Governments with a proactive approach could be taking advantage of the revenue that would be available from regulated online gambling. According to a report that was released earlier this week by U.S. congressman Jim McDermott, the United States could add over $40 billion in revenue over the next decade from taxes tied to a regulated online gambling industry in the country.

The Schleswieg-Holstein forces have come to realize the problems that occur when online gambling is restricted. Their reform ideas seem to be a more logical solution on how to properly oversee online gambling in the country.

Lobbying scandal has played a role

Poland Prime Minister Donald Tusk is responding to some recent controversies in his nation involving the gambling industry. Last month, four ministers in Poland’s cabinet resigned over alleged influences from gambling companies. Poland’s Minister of Sport, Miroslaw Drzewiecki, resigned his post due to allegations that gambling interests were influencing his decision on some pending legislation. Drzewiecki’s name showed up on some transcripts tied to an anti-corruption investigation known as Operation Blackjack.

It didn’t take long for other names to surface in the scandal. Andrzej Czuma, Minister Of Justice, and Grzegorz Schetyna, Interior Minister and Deputy Prime Minister also soon resigned along with another member of the nation’s cabinet. All four of the ministers were alleged to be under the influence of gambling companies that didn’t want to pay taxes that would have been associated with some pending legislation.

Many observers feel that the scandal has played a role in Tusk’s enhanced tough stance on gambling.

Sweeping reforms could be coming

Tusk is trying to get some vast legislation in place related to gambling in his country. The proposal would go beyond an online gambling ban to also eliminate slot machines outside of casinos along with higher taxes for gambling companies in the country. In addition, the legislation would ban advertising for any games of chance.

“We are proposing to ban a significant part of the gambling sector,” said Tusk, We want to see this market shrink by 20 to 25 percent per year. Over the course of five years this kind of gambling should disappear from Poland.”

The legislation would gradually eliminate slot machines over a five-year period. During this period, taxes on the “one-armed bandits” would be increased from 180 euros a month to 480 euros a month. There are over 20,000 slot machines in Poland. The “one-armed bandits” are typically found in bus stations, train stations, shopping malls and fast food restaurants.

Tusk is also concerned about the potential threat of gambling on young people. The new legislation would make it illegal for anyone 17 years of age or younger to gamble.

The online gambling ban portion of the legislation will attempt to cover many different areas. The new laws could enable Poland to track connections between internet providers in the nation and those of international wagering websites. The legislation would also closely monitor online money transfer providers.

Tusk doesn’t have to look far to see the dangers of online gambling bans. Russia’s recent anti-gambling legislations have seem to have done little to stop wagering in the country. Many loopholes in Russia’s new laws have been exploited. The crackdowns appear to do more harm than good in the long run. Tusk could generate almost endless revenue for his country by supporting gambling but his new reforms will likely be doomed in the years to come due to the continued growth and popularity of gambling.

The country is under a great deal of pressure from several forces to implement the legislation. It is estimated that about 3 million French citizens are illegally wagering at online casinos based abroad. Under the proposed law, private firms would obtain a permit from a newly created regulator. The firms could then set up websites offering wagers on skill games like horse racing, poker and sports contests.

Great potential for French market

According to consulting firm MECN, the French market could be worth nearly 2 billion Euros in gross revenues by the middle of next decade. The report is based on five key factors:

Liberalization-The legislation is expected to be in place by next summer.

The importance of the French market-Among casino operators and industry experts surveyed in the report, 80% indicated that France was relevant and important to their future endeavors.

Onlne poker-Nearly 80% of the casino operators in the survey are looking to secure a French poker license.

Market size-The licensed market in France last year totaled 70 billion Euros with a gross revenue of over 8 billion Euros.

Potential-The market has unlimited growth potential in poker and sports betting.

“The operators will focus on online poker and sports betting because they expect the French market to outstrip even the success story of the Italian online poker and betting market,” according to a statement from MECN.

The wheels are in motion

“We have chosen a middle way which I think is just and efficient, a controlled opening up of the market,” Budget Minister Eric Woerth told parliament. “I want to put an end to these parallel universes. I want to put an end to the jungle of illegal sites,” he said.

Under the current laws in France, two state-owned organizations handle legal online gambling operations in the country. The state makes about 5 billion Euros per year from gambling at race tracks, licensed cafes and the internet. Woerth has indicated that France could generate 1.5 billion Euros annually from taxes tied to the pending legalization.

In addition to pressure from private gaming firms and the European Union, there are several top soccer clubs in Europe pushing for the bill to go through. The soccer organizations feel that their sport would benefit by giving their fans a chance to place wagers on matches at their websites.

The bill is critical for online gaming corporations in the United Kingdom. Their profits have been down in recent years but the French legislation would be a major jump start for their operations over the next few years. Several major gaming companies in the UK saw their revenues decline by over 25% in the first-half in wake of the worst recession since World War II.

Can it Be Done?

All the comparisons may be futile because internet gambling is an entirely different animal than its land-based counterpart.  Until recently, anyone who wanted to gamble was forced to physically travel to a casino facility.  Thanks to the rapid development of technology and the fast growing popularity of the internet, gambling has essentially become an activity with no borders or physical constraints.  These days, all the player needs is a computer with an internet connection and they can try their luck with poker and many other types of casino games.  Being that the internet is viewed as a medium with little to no rules, it is fair to ask: can the local government really keep wraps on the online gambling industry?

A Probable Resolution

Perhaps the best approach is that instead of having online gambling being regulated entirely by the state or federal government, it is better to resolve the matter by permitting each body to simply continue to do what they do best.  Already experienced in regulating gambling activities to some degree, individual states could be allowed to regulate the internet version to the extent they decide to incorporate into to the legalization and regulatory processes.  Because big money is involved, the federal government could be responsible for regulating payment processors and financial institutions.  Sure, it may sound like a long shot now, but if alcohol got through the prohibition and marijuana is now being embraced as a medical solution, can’t the online gambling industry get a fair trial?  After all, it is pretty much a known fact that the United States stands to reap billions in tax revenues from the booming online gambling industry.

We could be living on a dream, but if everyone with something to say about the United State’s online gambling structure, federal and state officials, land-based casinos and leading software developers included, would just sit down and rationally discuss these issues, there is a great chance that a beneficial resolution could be reached.  Unfortunately, as long as the issue continues to be viewed as a misunderstood threat to American society in which only one side can win, it is very likely that a viable resolution will not be found any time soon.

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