Leisure & gaming in the post US era

HAPPY NEW YEAR.

Published: Sunday, December 31, 2006 Online-Casinos.com

NEWSWEEK EXAMINES THE QUESTION OF MORALITY VS. MONEY IN ONLINE GAMBLING

At last, a mainstream media article that understands the hypocrisy surrounding online gambling bans

The hypocrisy of government institutions that support general forms of gambling, but ban Internet gambling on moral grounds has at last been examined by the international magazine Newsweek in it's upcoming January 8 issue. And the story has been picked up and distributed widely by other online and offline media.

Titled "Morality vs. Money - nations say they attack Internet betting for sake of the children. But they also run gambling operations," the story by Silvia Spring deals primarily with the European scene, referencing the claims by France, Denmark, Finland, Germany, Hungary, the Netherlands and Sweden that "...it's all about saving our people from the sins of gambling."

But, the author points out, the problem is that all of these countries allow licensed gambling internally, and in some cases are promoting its expansion very aggressively. "So what's it really about?" she asks. "In recent months the EU has launched proceedings against all these nations for protecting national monopolies in violation of EU laws guaranteeing free movement for goods and services."

She adds that the result of state protectionism for selected forms of gambling is a business that flowers in chosen places precisely because it is banned elsewhere. "That's true where national or state governments license private casinos (think Vegas or Atlantic City) or where the government runs the monopoly (as in Germany, where the state franchise runs gambling operations in all 16 states)," she writes.

In Europe, state casino and lottery monopolies generate more than $31.7 billion a year, and in the United States private casinos alone generate roughly the same, the article continues before quoting legal expert Paul Renney who opines: "How can you say that you're concerned about gambling being dangerous to the moral and social fabric of your society if, at the same time, you promote a massive lottery and try to get people to come and gamble? It's contradictory.''

Opponents of online gambling are exploiting a loophole in the EU laws protecting free trade, which allows member states to take measures to protect the social and moral fabric of their societies. The Netherlands has used that provision to ban Ladbroke's of Britain from offering online betting to the Dutch, arguing that such Web operations are harder to police for fraud and monitor for addictive behavior. The French deployed a similar argument in arresting the two Austrians, bwin.com executives Norbert Teufelberger and Manfred Bodner, in September. They have been released on bail and are awaiting trial.

Didier Dewyn, secretary-general of the European Betting Association, refers to such proceedings as "witch hunts" that deprive targets of even the basic EU right to travel freely within the union.

Spring writes that although Britain is trying its own strategy to lure online casinos to set up in Britain, subject to British regulation - and taxes, there's probably no way Britain can compete with places like Malta, where she claims regulations are loose and the taxes as low as 4.17 percent.

Nor would the establishment of a British online-gambling capital address the threats to morals or money flow in rival states like France and Germany, which appear willing to fight this to the bitter end. France's state-run betting agencies, Pari Mutuel Urbain (PMU) and La Française des Jeux (FDJ), took in Euro16.9 billion in 2005, and Germany's gambling market is estimated at Euro29 billion.

It is a myth that the Internet cannot be policed, the writer claims, offering China as an example. But the EU has no stomach for the kind of strong-arm methods China employs. After the U.S. ban took effect in October, major operators like bwin.com, PartyGaming and 888 Holdings became even more reliant on marketing to European customers.

With gambling now available on some 2,300 Web sites worldwide, through mobile phones and interactive TV, an estimated 3.3 million people in Europe now regularly bet online. Even if they win the EU legal battle, on-land gambling probably can't stop the online threat, not in the long run, Spring concludes.