There is a big debate going on in the US about online gambling. Despite many people’s best endeavours the authorities know that with the internet it is becoming increasingly difficult to swim against the tide. For a country based in its puritanical origins it is in fact liberal. This all despite periods such as the prohibition and now with the illegality of online betting.
In the US it is not so much central government that regulates as individual states. Most states allow forms of gambling although they are heavily regulated. Nevada is the exception – where anything (apart from internet gambling) goes.
Until the advent of internet gambling the American culture was to visit a designated location to gamble i.e. Atlantic City, Vegas etc. Anyway, typical of the US protectionist, colluded with evangelical regulators, existing casino owners feared (wrongly) for their livelihood with the new competition from the Internet and ensured that online gambling would be banned. The congressman behind these moves was aptly named Leach and the leach wanted to lynch the casinos!
2006 saw the introduction on a national basis of an anti-online gaming Act. The Act itself was incredibly vague. Much of the onus was put on the banks by making it illegal to transfer cash to or from American citizens to online casinos. In effect the US market is for the moment on hold. Worried by the long arm of the American law most online casinos will not take bets from Americans.
It is hoped that a new more practicable law will be found. Despite the central governments law making efforts, it is still up to the individual member states as to whether they outlaw online gambling. Many States have as yet not passed verdict. Nevada hypocritical to the last however, has outlawed Internet gambling.
STOP PRESS – As of 6th May 2009 the an action submitted to US congress may herald the first move towards authorised and regulated online gambling in the USA. Read our take on this legislation here
When looking at the European situation – pragmatism comes to mind. Firstly let’s remember that
- Europeans invented most gambling games
- Europeans have been inveterate gamblers for centuries
- Substantial tax is to be gained from gambling
- Internet based bans are near on impossible to police
Under European Community law and interpreting the EU Free Trade Agreement, gambling should be legal in every state. NOT QUITE SO SIMPLE. The EU not being strong as a unit can do little to stop the policies of its member states. Germany, France and several other states have brought in legislation banning online gambling. Either for protectionist or moral reasons these very states have a fight on their hands with the EU commission, as anti-online gaming laws are under investigation by the commission, which could ultimately, (unlikely), impose severe penalties to coerce countries, into liberalising their anti gaming laws. France and Spain have already gone some of the way by trying to open their markets to licensed operators.
Now to China
Paradox springs to mind!
While we in the west associate the invention of gambling with Europe, the Chinese would dispute this drawing our attention to games like Pai Gow and Mah jong. These were invented centuries before the likes of Blackjack or Roulette. The Chinese, like the Europeans, are inveterate gamblers – it is in their blood.
Presently there is no legalised gambling in China – on or off-line. The lottery is the only permissible form of gambling and even that can no longer be done online (due to systemic abuse).
No one in China disputes that gambling exists. In fact over $4 billion is wagered annually. Rather than focus their attention on individuals, the Chinese authorities prefer to concentrate on licensed and un-licensed trade. They chose for the moment to turn a blind eye to centres such as Macau, despite recent reports that suggest greater difficulties in obtaining visas to such places.
So what does the future predict for China?
On the face of it, licensing seems to be the key. We would expect legislation at some stage in the near future, governing online casinos and the granting of licences. The authorities are pragmatic enough to understand that licences bring income through taxation, which for the moment is lost abroad.
And finally to Australia – what a dichotomy!
Important to understand that most Australians gamble in one form or another (80%). They bet on everything. This is great news for traditional off-line casinos. The Authorities have understood the Australian psyche and issued licences to this purpose. HOWEVER ONLINE CASINOS ARE ANOTHER STORY.
In 2001 The Australians brought in a gaming Act making it illegal to operate NEW online casinos. Now to the crux of the matter. While it is illegal for any post 2001 online casino to operate it is not illegal for Australians to personally gamble online.
REALITY: Most online casinos accept Australian players unlike their US counterparts. All this despite the fact that they could face prosecution in Australia. It would appear that when it comes to the long arm of the law, the Australian arm is considerably shorter and less muscle bound than his American brother.
A special word needs to be put down on Lassiters, the only pre-2001 online casino granted a licence and due to the non-retrospective nature of the Act, legal. Heavily reliant on business from US players, the US 2006 Gaming Act had a hugely detrimental effect on their business model. Unable to sustain a business without their core base of customers they have had to close their doors.
Predicting the future for the online gaming industry on a Global level.
New businesses have always posed threats to the existing status quo. No other business since the launch of the modern day transport system, over a hundred years ago, has had such a dramatic effect on our lives as the Internet. Of course, traditional businesses feel threatened, but it is these firms that must accept reality and embrace the Internet or they will expire. The Internet and with it online gaming, is on a global level here to stay and indeed get stronger. In the modern world