Inside Asian Gaming

48 n October 31, the UK government unveiled plans to regulate internet gambling, saying the recent US ban on the industry risked driving it underground. Culture Secre- tary Tessa Jowell highlighted the dangers of the ban by comparing it to the US prohibi- tion of alcohol sales in the 1920s. However, Sports Minister Richard Caborn added that Britain would not protect online gaming executives from extradition requests if they took online wagers from countries in which they were illegal. The US effectively banned online gam- ing at the end of September in a move that wiped billions of dollars off the share prices of internet gaming companies such as PartyGaming and 888 Holdings. Before passing the legisla- tion, US authorities had arrested visiting executives from two UK-listed online gaming com- panies – David Carruthers from BETonSPORTS and Peter Dicks from Sportingbet. The US has also introduced a ban on banks and payment processors han- dling payments to online gam- ing sites. The UK has 70 sporting bet- ting sites, but as yet hosts no casino gaming operations. The government believes the new regulatory regime will draw online casino operators to the country with the promise of full legitimacy. Online casinos have, until now, preferred to be based in tax havens like Gi- braltar and the Caribbean Islands. There are about 2,300 internet gambling sites across the world,with more than a quarter based on the Caribbean island of Antigua. The UK’s current Labour government wants to make Britain the world centre of internet gambling. According to a report in the UK’s Evening Standard, British players ac- count for nearly one third of the 3.5 million online gamblers in Europe. Currently, online gaming firms that rely on payment by credit card must operate The UK’s Caribbean Aspirations The UK government has opted to use regulation, rather than a US-style ban, to control its online gaming industry. It also hopes to turn the country into a major centre for internet betting from offshore, but from September 2007, new regulation will allow them to operate from the UK. However, online gaming giant PartyGaming announced in December that the plans to draw more online operators to British soil will fail unless the government makes clear how they will be taxed. Spokes- person for PartyGaming, John Shepherd, said, “No one in this industry can yet make a judg- ment call because there is no decision on the tax regime. Spain Follows The Spanish government has decided to follow the lead of the UK and Italy in regulat- ing and licensing online gambling compa- nies. Italy’s decision to regulate the industry led to a flood of applications for licenses from UK bookmakers and online giants such as Ladbrokes, William Hill and Gala Coral. These companies, along with PartyGaming and SportingBet are expected to apply for licenses in Spain too. The Spanish licenses for internet and phone betting will last for five years and will be renewable if the Spanish regulator’s con- ditions are met. The European Commission is scrutiniz- ing other European countries that appear to be protecting state-sponsored monopolies in the online gambling industry, which is against EU regulations.In contrast to Italy,the UK and Spain, France arrested two Austrian online gambling executives for advertising their business in in the country through a sponsorship arrangement with the Monaco Football Club. Online Gaming Set to Soar In a recent study,Merrill Lynch concluded that worldwide online gaming revenue could reach US$528 billion annually by 2015, with revenue growth of around 22% a year. Estimates of current rev- enue range fromUS$12 billion to US$30 billion per annum. Meanwhile, Las Vegas Sands Corp (LVS), the world’s largest casino operator by market capi- talisation, announced in Decem- ber that it would join forces with Cantor Gaming (an affiliate of financial services company Can- tor Fitzgerald) to launch a casino Web site, initially aimed at serv- ing the UK market. LVS plans to launch the site in the second quarter of 2007, and said it will not accept bets from US custom- ers.According to UK government figures, Europeans spend nearly US$6.9 billion a year on online gambling. Poker in Pubs Meanwhile, in a further sign of the UK’s increasingly liberal stance on gambling, the legislative reforms to be introduced in 2007 will allow all pubs in the UK to hold poker games for cash from Autumn. Currently, only pubs with a special permit from their local council are allowed to do so. Players losses will be capped however, possibly as low as US$20 a night. The provisions will also pre- vent pubs from deriving a direct financial benefit from card games by, for example, charging fees to participants. Antigua, home to a quarter of the world’s online gambling sites O Av. Amizade, SN Shop No.5, Mandarin Oriental Hotel,Macau Tel: 2870-2618 Av.. Amizade, Macau Landmark Shop 016-018 Tel: 2878-2372