What's New? - April 2008

Internet gambling firms target South Africa

It is reported that South Africa is going to pass the National Gambling Amendment Bill giving the country's gambling laws more room to allow internet gambling companies operate  from  South Africa.  Online gambling is currently illegal in the country under the National Gambling Act. Several enterprises active in the online gambling sector like the Victor Chandler International group and Bwin Interactive Entertainment have confirmed plans to enter  the  South African  market. Read more ..

Poland preparing to legalise online gaming

According to various media reports this week, the Polish government is preparing a framework to regulate online gambling to be in effect by the second half of 2008. Marek Kapica, Deputy Minister of Finance, stated that they plan to legalize gambling and then make the necessary legislative changes and send “to the European Commission within the required notification procedure”.  He further stated: “We cannot control this process anyway and it is better that the budget at least derives some revenues from it.” Read more..

Antigua shows keen interest in US Internet gambling debate

As reported by the local newspaper Antigua Sun, the Antiguan government is closely watching the recent discussions going on in the United States in connection with the US Unlawful Internet Gambling Enforcement Act (UIGEA). Referring to the last congressional hearing on those regulations and the position taken by the American Banking Association and other interest groups, Dr. Errol Cort, Minister of Finance and the Economy, told the newspaper: “The matter is very fluid. We’re watching it because if that bit oflegislation is operationalised, it would really cause serious, seriousdifficulties for the industry - so we have a very keen interest in thematter.” Read more ..

US Congressman Jim McDermott to Speak at the World Online Gambling Law Report Summer Retreat 2008

US Congressman Jim McDermott (D-WA), who is a sponsor of the Internet Gambling Regulation and Tax Enforcement Act of 2008 (IGRTEA), the companion bill to the Internet Gambling Regulation and Enforcement Act of 2007 (IGREA), will speak at the World Online Gambling Law Report's 6th Summer Retreat 2008,15-17 June, in  Tylney Hall, Hampshire, UK. He will join experts in their respective fields to bring extraordinary insight into critical developments affecting the online gambling industry, says the organizer. See here the program of the event

A letter to the US Congress asking for the prevention of the implementation of UIGEA regulations

Congressmen Barney Frank, Ron Paul, Luis Gutierrez and Peter King have sent a letter to all members of the US Congress seeking support to prevent implementation of the Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA) requiring financial institutions to police internet gambling. They say that during the hearing held in the house financial services committee on 2 April  representatives from the regulatoryagencies have admitted there are "substantial problems" with creating regulations under the Unlawful Internet Gambling Enforcement Act of2006 without hindering payment systems. Read more ..

FBI Can Target i-Gaming Through Cyber Initiative

iMEGA, Interactive Media Entertainment & Gaming Association, quotes on its website from a closed hearing of the US House Intelligence Committee held on the 24th April dealing with the so-called Cyber Initiative of the Bush administration’s and infers that the White House, FBI and Congress will step up their efforts to combat i-gaming - even through warrant-less monitoring.

" Rep. Darrell Issa (R-CA): If you go into a place and there’s a crime actively being committed, let’s say there’s a bookie joint, and there’s tens of thousands of illegal transactions going on every minute. And you know that. And you have proof of that. You don’t question your ability to go in and to harvest the fruit of all the activities in there, is that correct?

Robert Mueller (FBI Director): That’s correct."

Read here also the transcript of the FBI Director on internet surveillance

Bankers cheer Frank-Paul approach to Web gambling

The new Congress legislation to suspend Internet gambling ban (see our last week's report) has been applauded by the American banking industry. “I don’t know what can be done or will be done legislatively, but we certainly appreciate the interest,” said the top lobbyist for the American Bankers Association , Floyd Stoner, of the Frank-Paul legislation. Read more ..

EU discusses responsible gaming issues

European Gaming and Betting Association (EGBA) reports that all key stakeholders from the European online gaming industry called for European cooperation in responsible gaming during the inaugural ‘Responsible Gaming Day’ event at the European Parliament, the first event of this kind. Several Members of European Parliament, the EU Slovenian Presidency, regulators and academics had joined leading industry representatives to exchange best practices and knowledge in the field of responsible gaming. Read more ..

Bwin is suing the French Tennis Federation (FFT)

European Gaming and Betting Association (EGBA) reports that one of its members, bwin, is suing the French Tennis Federation (FFT) for damages before a Paris court. FFT had claimed that online sports betting operators offer services which present a danger to the ethics of sport. Read more..

Gambling monopoly days in Denmark may end soon

Denmark's Danske Spil is the official authority in charge of all gaming enterprises of the country, The government owns 80% of Danske Spil's shares. Anders Samuelsen of the New Alliance party plans to bring forward soon a proposal to end the gaming monopoly of the organization. He argues, with reference to the lawsuit against Denmark by the European Commission, that there is no point in protecting something that is going to be lost anyway. Read more ..

Italian draft remote gaming decree faces strong opposition

The decision of the European Commission to issue formal Comments on the Italian draft decree on remote gaming has been welcomed by EGBA, the European Gaming and Betting Association. Sigrid Ligné, EGBA Secretary General said: “The Commission’s decision suggests that even if Italy has demonstrated a genuine improvement in bringing its legislation into line with EU law, the Italian remote gaming legislation still contains measures that don’t serve a clear legitimate public order interest.” Read more ..

Gambling study expected soon in Tasmania

ABC News, Australia, reports that at the end of this month, a study on the social and economic impact of gambling in Tasmina is expected to be delivered to the local government. Read more ..

Fahrenkopf denies that AGA has "lukewarm" stance on Internet gambling

Frank Fahrenkopf, President and CEO of American Gaming Association (AGA), has written a letter to the Las Vegas Review Journal (LVRJ) who had said in an op-ed entitled "Wanna Bet?" that "Mr. Fahrenkopf and the AGA are lukewarm on Internet gambling because it poses a competitive threat to brick-and-mortar casinos." Mr. Fahrenkopf denied in his letter that AGA was lukewarm and mentioned that some of their member companies have already expressed their interest in getting into online gambling business if it is legalized. However, he said that AGA wants to slow down the legalization and regulation process in order to gain time to study the complex surrounding issues, as outlined in the Internet Gambling Study Act introduced by Reps Shelley Berkley and Jon Porter of Nevada last spring. Read more ..

India: Goa Government would grant licenses to five more offshore casinos

The government of Goa, India, has decided to grant five more offshore casino licenses. Two such casinos are already floating on Goan waters. According to the Goa Chamber of Commerce and Industry (GCCI), this move would boost the tourism industry of the state attracting high spending tourists from all over the world. The state has already received 15 applications for operating floating casinos. Read more ..

Costa Rica casinos to follow new rules

It is reported that new laws in Costa Rica will change the way casinos will be run in this country leading ultimately to less casinos being built in Costa Rica. The new laws have been introduced aiming to prevent the country from becoming a gaming paradise. Read more ..

bwin may win a lawsuit in Germany

According to Johannes Caspar, a law professor at Hamburg University and legal adviser to the Schleswig-Holstein state legislature, Bwin Interactive Entertainment AG, Germany's biggest sports betting organization, may win lawsuits that challenge the ban on Internet sports betting in Germancy since January 2008. According to Bwin, the ban in effect in all 16 German States violates European Union law. Due to the ban, Bwin is supposed to have lost one-third of its share value during the last 12 months. The ban “won’t stand the test at the European Court of Justice," Caspar said. The EU's executive body has already started infringement proceedings against Germany on January 31 in connection with the state laws related to gambling. Read more ..

The Bavarian Adminstrative Court of Munich has once again granted relief from judicial execution to a sports betting agent

The Bavarian Adminstrative Court of Munich has ruled against the Free State of Bavaria thus allowing a sports betting agent to continue transferring sports betting wagers to a privately owned bookmaker, licensed in the EU, until the main proceedings decide whether the German Interstate Treaty on Gambling and its Bavarian implementing laws comply with the requirements of the European Court of Justice (ECJ) for guaranteeing fundamental rights. The administrative court has even directed the agent to file for a licence. Read more ..

Signature of Protocol for the protection of ethical values in the Turkish football

The Turkish Football Federation and INTELTEK, a subsidiary of the publicly listed INTRALOT in Turkey, have signed a protocoll to share statistical information provided by the latter about all Turkish football matches listed in the match programs. They aim to identify abnormal and suspicious looking games and take preventive actions against illegal betting activities. In Turkey, betting is forbidden under the age of 18 and it is also not allowed to use credit cards in this connection. Read more ..

New Congress legislation to suspend Internet gambling ban

Reps. Barney Frank (D-Mass.) and Ron Paul (R-Texas) announced a new legislation, HR5767, to prohibit the Department of the Treasury and Federal Reserve System from proposing, prescribing or implementing any regulations related to the current ban on Internet gambling, as required by the Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA). Read more ..

Barney Frank’s bill to legalize and regulate gambling (IGREA) gains its 48th cosponsor

Rep. Jerrold Nadler (D-N.Y.) has announced that he will cosponsor the Internet Gambling Regulation and Enforcement Act (IGREA). Nadler originally voted against the UIGEA in 2006 as a part of the SAFE Port Act dealing with homeland security issues. Nadler is a representative for New York serving his ninth term. He currently serves on the Judiciary Committee and the Committee on Transportation and Infrastructure. One issue which he can take up there is about the Internet gambling ban infringing on people's right to choose to gamble online. Since he serves also on the Crime, Terrorism and Homeland Security subcommittee, he can also bring up the debate of whether online gambling poses a threat to homeland security by allowing links to terrorism.

Read more ..

“It is time for US to fold on anti-gambling laws”, says Wall Street Journal

The WSJ predicts in an opinion leader titled “Time to Fold” that the trans-atlantic spat over online gambling may help rewrite the rules of cross-border Internet commerce. After the EU launched an investigation last month to establish whether the US enforcement of the anti-gambling laws (UIGEA) violates an international trade agreement that requires accessibility to US markets, the WSJ believes that the case will come to the World Trade Organization (WTO), the EU accusing the US of violating international trade rules. Although the US lost a similar WTO case against Antigua and Barbuda, they continue to threaten foreign online gambling companies with prosecution and forfeitures, as a result of which the Executives of the European gambling companies fear arrest and stay out of the country. The US ban on online betting, although impracticable, remains in place. The WSJ article supports the bill of the US Congressman Barney Frank to legalize and regulate the gambling business. The Wallstreet Journal says that by legalizing and regulating the business, the US government could more effectively tackle such problems as underage gambling and addiction

France opens up its gambling market by end of 2009/ beginning of 2010

According to the French newspaper Aujourd’hui en France, the French budget minister Eric Woerth stated that the government is planning to begin “a new era in online gaming and betting” by the end of “2009 or early in 2010”. The newspaper also reports that the former MP Bruno Durieux delivered at the end of last week results of a study on online gambling he had carried out for the French finance inspectorate. The French President Sarkozy is expected to approve it. The proposed framework for online gaming and betting would allow horse racing bets only through tote betting (pari mutuel), to conform with the current monopoly operated by Pari Mutuel Urbain (PMU). Fixed-odds bookmaking on football or tennis would be allowed under strict guidelines. France also plans to partner other EU states such as Belgium, Germany and Holland in working out a new system for online gaming and betting, rather than adopt existing models such as those in the UK or Italy. According to Eric Woerth, it is not the threat of the EU commission that has made France to act, but the changes brought in by technological developments and the internet.

Alabama Attorney General sues US Interior Department over Indian gambling

Troy King, Alabama Attorney General, is suing the U.S. Department of Interior to block the department from negotiating with the Indians to allow them operating slot machines and table games commonly found in casinos. The tribe operates currently electronic bingo games.

"The Department of Interior's recent actions represent a complete disregard for fundamental principles of states rights and an arrogant lack of respect for the people of Alabama," King said Tuesday. The talks between the Poarch Creek Indians and the state government on this issue broke down in 1991 and since then no governor of Alabama has agreed to a compact allowing Indians pursue other kinds of gambling than bingo. Read more ..

The US Congress hearing on April 2nd, 2008, on the UIGEA regulations conducted by the Subcommittee on Domestic and International Monetary Policy, Trade, and Technology, heard from several witnesses that the UIGEA law is too ambiguous to be applied in the daily business. Congressman Luis Gutierrez (D - IL), chairman of the Subcommittee, pointed out in the opening discussion that the hearing on this day will focus on implementation regulations of the UIGEA.

Rep. Bachus supported the law saying that Internet gambling is a "scourge on our society" leading to divorce, addiction and other ills.

One of the arguments brought forward by several witnesses was that it is wrong and impractable to make the banks arbiter of what is illegal and legal. Ms. Louise L. Roseman, Director, Division of Reserve Bank Operations and Payment Systems, Board of Governors of the Federal Reserve System, said the payment system isn't well defined to identify the type of Internet gambling, the banks will assume all internet gambling is unlawful. But if the transactions are cloaked as legitimate, then the banks will process them She also said that the offshore nature of online gambling will add significant complications making it virtually impossible to block cross-border transactions.

Barney Frank, Chairman of the Full Committee, said that the UIGEA creates two problems. It is an intrusion on liberty as well as on the rules of the Internet. He does not want that the rules of the Internet behaviour be based on the morals of the Congress.

Maxine Water from California, who voted for the UIGEA, said she is reconsidering her vote because her reviews have shown that the morality of some organizations who are strong supporters of the law contradicts the way they treat people in their own organizations.

Rep. McHenry asked if it is the construct of the legislation, or the intent of the legislation that is proving difficult in creating regulations. According to Ms. Roseman, it's a combination of both thing. The construct creates ambiguity between what is legal and illegal gambling. And the intent is for the payment system to be the enforcement mechanism. But the latter is not well designed for this task.

There was also some discussion about the horse racing exception. Barney Frank said he can't find the horse racing exception in all the moral biblical teachings about gambling, and was wondering if betting on a horse is animal husbandry.

Click here to view the archived webcast of the hearing.