Online Casino Spotlight

The state of Nevada is the home of beautiful desert terrain, brothels and most notably, Las Vegas, now referred to by many as Sin City.  It is no secret that Nevada has become synonymous with gambling over the years.  With so many casinos and gambling establishments in the area, the prevalence of online gambling has sparked major competition on a state wide level.  And while you could say there is really no point in playing from your computer when you could easily venture to vibrant venues offering free alcohol and casino games galore, online gambling has managed to make its way into the homes of thousands of Nevada residents.  The more than one hundred sportsbooks and casinos may not like it but up to this point, they, like much of the rest of the world, have been powerless to stop it.  However, there are a few reasons why online gambling has still yet to explode as fast as eager players in Nevada would like.

Problems with Regulation

You might be surprised at the support internet gambling has garnered in recent times.  Several local governments are taking a closer look at existing laws while even some officials on the federal level are openly exploring ways to effectively regulate the industry.  In the state of Nevada, regulation and full legalization all rests on the shoulders of the Gaming Control Board and Gaming Commission, the two entities that would be responsible for adopting and enforcing the new provisions.  Unfortunately, there are currently three major roadblocks within the existing state legislation that might cause problems.

1.)  The first hurdle is the United States Department of Justice, an agency that would need to give Nevada regulators the green light and also one that is adamantly against online gambling.

2.) Second and very important, regulators would have to ensure virtual gambling technology that provides a reasonable level of protection to prevent minors from participating or stop online gambling in locations where the act is illegal.

3. Finally, regulators would have to make sure that internet gambling is consistent with the state’s public policy of maintaining the stability and success of Nevada gaming.  This is perhaps the biggest concern of all.

In 2001, a Nevada law was passed that authorized the state to at least explore the possibility of online gambling regulation. Now however, it looks as if legislators are holding back and observing the action of their neighbors.

America’s Online Gambling Capital?

California, the most popular state in the country and home to one of the world’s biggest regional economies, is currently lobbying strong for the regulation of online gambling.   The state is trying to leverage a sizable loophole in the UIGEA that will allow internet wagering to be legislated and fully regulated.  Due to its aggressiveness, many experts are predicting that California will eventually hold the title of America’s online gambling capital while Nevada sits back and watches.  There is a lot of tax revenue to be generated so if California succeeds, others will likely follow suit.

For years, the Silversands online casino operated illegally and reaped many benefits due to the lack of regulation in the internet gambling business.  The NGB (National Gambling Board) aims to change all of this as South Africa looks to introduce online gambling regulation.  Following years of discussion and no results, the board is finally taking strict action to put an end to the country’s illegal gambling operations.  However, online gambling in this jurisdiction is overwhelmingly difficult to control as South Africa has previously struggled to come up with ways to efficiently regulated the web-based environment.

Probable Regulations

The regulations proposed by NGB imply that South African citizens who want to gamble online will need to open an account with a local bank, an account which can only be used for online gaming endeavors.  Players are only allowed to make payments via credit card and their accounts must continue to abide by requirements of traditional banking standards and the Financial Intelligence Centre Act.  The NGB says that it will work collectively with banks to monitor accounts, stating the players will not be allowed to have more than R20000 in their accounts at any time.  The Board intends to issue ten licenses to South African operators that have their servers located in the country.  That is when, and if regulation is ever achieved.   Online gambling is naturally a hard sector to administer and industry regulation has been chaotic and disorganized across the board.  For now, lawmakers in South Africa are hoping that they can at least bring some level of control to their sector of the industry.

Guidance in Antigua Barbuda

In efforts to make their online gambling regulations a success, South African authorities have turned to Antigua Barbuda, hoping to leverage the expertise of this efficiently regulated jurisdiction and use it as a measuring stick.  Last year, South Africa implemented a remote gambling legislation, creating a framework for licensing and a body that would serve as the regulatory regime.  The country is now focused on regulating the industry and following through on enforcement of the law’s operational provisions.  It looks to Antigua Barbuda for some much needed guidance on how to accomplish in the best possible way.

Last month, members of the South African NGB spent a week in Antigua Barbuda sharing ideas with the FSRC’s (Financial Services Regulatory Commission) Division of Gaming.  The NGB carries a lot of respect for the FSRC which has nearly 15 experience in the field of online gambling regulation.  What they left with was the confidence and knowledge of being able to put effective regulations in place for the country of South Africa.

The Challenge Ahead

South Africa has a large battle on its hands as it must determine how to regulate foreign gambling operators and ensure that local operations remain competitive.  This is a significant issue as there are a large number of sites based offshore that receive much lower tax rates while benefitting from the business of South African players.  At this point, nothing has been etched in stone and operators like Silversands continue to profit because there are still no regulations or comprehensive legislation in place to stop them.

According to finding published in a June, 2009 study, the problem of gambling addiction would drop considerably if the United States government made the decision to fully legalize and regulate internet gambling.  Ironically enough, this new study was published by the Church of God and Morals.  In fact, a number of religious groups associated with the Church of God and Morals have been written, most of which argue that online casino gambling should remain an illegal activity.  This is why it is so strange that its own study speaks otherwise by stating that a regulated online gambling industry would greatly benefit the United States as a whole.

Cindy Doright, spokesperson for the Church of God and Morals, remarked that gambling addicts would be better protected if online gambling was regulated, even though the organization believes strongly that the act of gambling is morally wrong.

The study was completed with the aid of a control group consisting of 25 Christian participants.  Each person was assumed to have been gambling addicts for more than ten years.  The participants were allowed to gamble on the internet with real money.  The catch was that all of their deposits and playing activity would be monitored by leaders of the church.  Their bookies, who are all loyal members of the Church of God and Morals, were also contacted to play a part in the process.  The bookies agreed not to accept any bets from the 25 Christians.  Finally after two years, the study concluded that none of the members from the control group developed any more gambling habits than they already had.  To top things off, 24 of the 25 participants quit gambling entirely.

One of the gamblers who was monitored reported that the increased monitoring actually kept him from being able to hide that fact that he was gambling.  In turn, this particular individual was far more conscious of his habits than in past times when dealing with the local bookie.  From there, the participant came out to admit that they didn’t want to be known as someone with a gambling problem.  Additionally, since he couldn’t deal with the neighborhood bookie, he just stopped gambling altogether.

While the study was conducted in a rather unusual manner and involved an insignificant number of the gambling population, the Church of God and Morals took upon themselves to send a letter to Congress to report the findings, which appears to believe it is more than a viable source to use as the basis for creating new legislation.

One Congressman the church contacted replied that since the religious group put the results in writing, he believes the findings to be true.  The fact that internet gambling regulation showed notable benefits yet was still opposed by the church from a moral aspect, seemed to be weigh heavy on the Congressman.  Upon being asked if he would look further into the subject by possibly viewing more scientific studies, the Congressman expressed that he wouldn’t.  According to Cindy Doright, he said the findings corresponded to his personal beliefs and therefore, it would be no need to look at any more factual documents.

Could a simple church study be the break online gambling proponents have been looking for?  Only time will tell.

The major focus of Barack Obama’s presidency campaign were the issues of education, health care and tax cuts for middle class U.S. citizens.  Now the head of the state, the new President, is working diligently to make his campaign slogan become a reality – change.  Sure, Obama has a lot on his plate as there is no easy fix the damage that was years in the making.  With that said, it would be nice if he could take a look into another mess – the regulations of online gambling in America.

Billions up for Grabs

The online gambling industry is flourishing to say the least.  In fact, the market has globally generated more than four billion dollars in the past two years alone.  Keep in mind that these revenues were garnered with very little participation from the U.S., which has pretty much been isolated from the market since the implementation of the UIGEA in 2006, a legislation that some online gambling proponents are calling the Unlawful Internet Gambling Enforcement Act.  Observers are projecting that the online gambling industry will exceed $15 billion by 2012.  That is, with or without the participation of the U.S.  A recent study released by Price Waterhouse Coopers shows that the United States has the potential to rake in at least $8.7 billion and up to $17.6 billion in as little as 10 years.  That is, if Congress decided to legalize, tax and regulate online gambling.  The study hints that if all U.S. states got onboard, a whopping $33.9 billion in taxes would be collected over the next decade.  Considering the current economic state, this seems like a move U.S. lawmakers should seriously considering.

So, what is the United States Congress waiting for?  Well, in their defense, there are still a number of aspects that would need to be addressed in order for online gambling to be regulated in an effective manner.  Some of these issues include age verification to prevent underage gambling, policing rogue and black market casinos, and the fear of compulsive gambling among others.  However, just as the nation has done with the prohibition of alcohol, which actually shares many similarities with internet gambling including an economic crisis at the time, there is a way around these issues if U.S. lawmakers could just see the big picture.  Just as alcohol proved to be a lucrative business in the way of taxes, online gambling could be the same and breath life into an economy that is obviously struggling.

The Bottom Line

The factor of the matter is as simple as this: the UIGEA remains unclear to this day and was a terrible idea from the start.  Anyone looking at the situation with a clear head would agree that it needs to revoked and quickly.  While there may be bigger fish to fry in terms of health care, education and national security, it wouldn’t hurt for the Obama administration to take a closer glance at the state of online gambling and its potential as a huge generator for future tax revenues.  Alcohol prohibition proved that it can be done and because of that, sensibly regulating online gambling should be a heightened priority.