Successful Gambling Regulation

The crux
Online gaming activity is set to top $24.5 billion by 2010 yet widespread global regulation of the industry has yet to take place. The online gambling industry is headquartered almost entirely outside the United States, but almost half its customers reside in the United States. While the United States prepares to open its doors to regulating online gambling, another lesser-known entity is already cashing in, big time.

Alderney – a tiny island some 30 km off the coast of Guernsey- with a population under 2,500, has struck gold. They are now home to a regulated online gambling community and it’s already paying dividends. Its Gambling Control Commission has contributed $6.2 million towards the development of its commercial quay and the money just keeps on coming.

License fees for online casinos cost around £70,000 per annum, and the goal is to get 100 casinos signed up within 3 years. The number of licensed companies in Alderney spiked from 25 to 34 last year. Already gambling takings have translated into £4.2 million cash in the bank.

The process
If applicants can prove their games are fair and honest – with the protection of minors and addicts in mind, that their management is not linked to the underworld then they are eligible to apply. The benefits for getting regulated (white-listed) in Alderney: limitless bandwidth, zero-rated corporation tax, plus freedom to maintain a legitimate and profitable gambling operation. According to Robin le Prevost, e-commerce development head for the States of Alderney, “Interest in Alderney has never been higher.”

It is unrealistic to prohibit Internet gambling because regulation and internal compliance provides revenue and checks and balances on an industry that is experiencing unparalleled growth. Likewise the tiny island of Malta is set to have at least 147 online gambling companies regulated. Perhaps the time has come for other countries to take notice?

ClubsNSW rejects credit-card gambling

THE New South Wales clubs industry has rejected an offer from online gambling giant Centrebet to set up computer terminals in its venues, saying it is taking a stand against the internet gaming industry.

Centrebet approached the industry representative body ClubsNSW in April with an idea to set up an internet cafe-style system linking gamblers directly to the online company’s website.

Clubs were offered a 50 per cent cut of all revenues generated on the computers, which would be paid for on gambler’s credit cards.

A similar mobile phone system was also proposed by Centrebet, Australia’s largest online bookmaker.

ClubsNSW represents almost 1400 registered clubs.

The ClubsNSW board today revealed it had rejected the offer in June, saying it was taking a stand against credit card and internet gambling.

It was the first of two approaches made by online betting agencies, with smaller player betezy.com.au making a similar offer last week.

ClubsNSW chairman Peter Newell said the Federal Government should step in and ban credit card betting.

“It’s one thing to gamble with your own money, it’s a completely different thing to gamble with money that is being provided on credit,” he said in a statement today.

“ClubsNSW has taken a stand at a financial cost – one which we believe is the responsible action to take.

“Now it is up to Government to address the issue.”

Mr Newell said problem gambling affected less the one per cent of Australian adults, but recent research showed the number of internet problem gamblers was rising.

“Recent research shows that the number of internet problem gamblers is on the rise at well over 20 per cent,” he said.

Ky. governor seeking to block online gambling

Kentucky’s pro-gambling governor is looking to make sure all bets are off for more than 140 online gambling Web sites that operate in the state known for the world’s biggest horse race.

Gov. Steve Beshear said his administration has asked a Franklin County Circuit Court judge to give the state control of 141 gambling Web site domain names. Beshear said he’s looking to restrict Kentuckians’ access to Web sites with names that include some of the most popular gambling sites for U.S. players: bodoglife.com, doylesroom.com and fulltiltpoker.com.

A hearing is scheduled for Thursday before Judge Thomas Wingate.

Beshear believes Kentucky is the first in the country to attempt to block online gambling by taking over Web domain names of gambling sites.

“Unlike casinos that operate on land or on riverboats in the United States, these operations pay no tax revenues, provide no jobs and yield no tourism benefits,” Beshear said at a Monday afternoon Capitol press conference. “They are leeches on our communities.”

Kentucky, home to the Kentucky Derby, already has a state lottery and allows gambling at horse tracks and bingo halls. Blocking internet gambling sites in Kentucky would “protect the signature industry,” Beshear said.

Such sites “siphon off money from regulated and legal games such as Kentucky’s thoroughbred racing industry, our lottery and charitable gaming activities,” Beshear said.

Although Kentucky officials did not have a definite estimate of how much money is being lost to online gambling in Kentucky, Beshear claimed residents were wagering millions online.

Justice Secretary J. Michael Brown said the state is asking the court to forfeit control of the domain names to Kentucky state government. Brown said if successful, the domain names would then controlled by Kentucky state government and subsequently blocked.

“There is gambling going on on the Internet and we know that that gambling is illegal in the commonwealth of Kentucky,” Brown said.

Beshear, a Democrat, largely based his campaign for governor last year on a pledge to push for an amendment to the state constitution legalizing casino gambling in Kentucky. Beshear was unable to persuade Kentucky lawmakers earlier this year to put a proposed gambling amendment on the ballot this fall.

Beshear claimed casino gambling could bring state coffers about $500 million per year in money that could be used to bolster state spending in areas such as education or health care.

Mike Jackness, co-owner of Costa Rica-based pokersourceonline.com which is not mentioned in the pending Kentucky lawsuit, said through a spokesman that he was disappointed in Kentucky’s move. Online gambling faces regulation elsewhere, Jackness said in a statement read by spokesman Dan Cypra.

“I’m disappointed that Gov. Beshear would choose to prohibit what grown adults have access to in the comfort of their own homes,” Jackness said in the statement. “Online poker is enjoyed by millions of Americans as a recreational sport.”

John Pappas, executive director of the Washington D.C.-based Poker Players Alliance, said in a statement that the move was “extraordinary and ill-conceived.” Pappas said he does not believe that Internet poker violates state or federal law.

“Poker has a proud heritage in Kentucky and simply because the game has evolved into the 21st Century, it should not be treated as suspect activity,” Pappas said.