Friday, September 29, 2006

Italy has had an interesting relationship with online gaming. In February,
the country attempted to ban all IP addresses of online gaming sites, and
then a few days later reportedly tried to set up an 'exclusive' relationship
with an online poker room, allegedly for a slice of the pie. Now, Italy has
taken the step that the U.K., and many other countries have taken, and is
moving toward regulation of the industry. As of January 1, 2007, it will be
legal for Italian citizens to gamble online. The new law also clears the way
for things like public sports betting and bingo parlors. This piece of
legislation de-regulates all 'ability based and fixed betting activities',
which poker clearly falls under. The Italian plan apparently mirrors that
of the plan in the U.K. with respect to how the entities that do business in
Italy are regulated. One thing of note: If a company does business with
Italian customers, the government will stand to make a 3% tax on any gaming
based revenues acquired by the company. This seems to be the direction many
countries around the world are heading, with the model in the U.K. seeming
to be stable, and sustainable. This new law in Italy has led many to
speculation that the online gaming industry will launch an all out blitz
trying to grab market share in the newly opened market. How do you say 'Gold
Rush' in Italian? The billion dollar question in the online gaming industry
is: What will the U.S. do?

In recent days, it has become more and more clear that the U.S. Senate will
not be able to pass the Internet Gambling Prohibition Act in any form,
whether as a stand alone bill, or attached to other legislation before the
Senate takes its election recess starting tomorrow or Saturday. History has
shown us that post-election 'lame duck' sessions of congress are more
reticent to discuss any proposed legislation that has heated debate, or
especially complex issues attached to it.

Starting January 1st, the Italian people will be able to legally play poker
in front of their computer. We will continue to monitor how the other
countries around the world deal with this highly charged issue.