Thursday, October 12, 2006

In a press statement titled "Americans Still Free to Gamble Online" the
Interactive Gaming Council, a trade association for Internet gambling
operators, pointed to important aspects of the new US legislation this week.
The IGC statement paints a background to the law whereby "Literally in the
dark of night, without debate and far from public scrutiny, Republican
leaders in Congress added an Internet gambling prohibition bill to
completely unrelated, but important, legislation on port security. Without
even reading the tacked-on provisions, legislators passed the entire measure
before adjourning for their election recess." But it is important to note,
the statement continues, that individual American players are still free to
gamble online. The prohibition bill does not make it a crime for the
individual participant. The focus of the bill is on the financial
transaction - the transmission of money from the player to the operator of
the gambling site. American online gamblers can "...continue to play without
fear of federal prosecution. However, some of their favorite sites may no
longer accept their wagers, as many of the publicly traded online gambling
companies have announced that they would stop taking American bets." "This
bill doesn't do anything to protect American consumers who choose to enjoy
Internet poker and other games," said Keith Furlong, deputy director of the
IGC. "But the immediate effect is to drive the industry further underground.
Gambling sites will devise new methods for getting money from / to a market
where players have shown a resilient demand for this type of entertainment.
"The sad thing is, however, that many of the largest and most responsible
companies, some of whom are major public companies listed on the London
Stock Exchange, are being forced to stop providing real-money games.

"This will prove to be a classic case of unintended consequences. In the
guise of protecting vulnerable Americans - minors who want to gamble and
adults who can't control their gambling - Congress has actually heightened
the risk to these groups. It has driven away the operators who followed the
most socially responsible practices. It has also increased the possibility
of online gambling being used for money laundering, because it has outlawed
the most easily tracked methods of payment."

"With few exceptions, U.S. states have demonstrated over many years that
they can successfully regulate the bricks-and-mortar gambling industry,"
added Rick Smith, executive director of the IGC. "That industry employs
thousands of people and generates millions of dollars in tax revenue. The
same principles could have been followed in the Internet gambling industry.
With licensing and rigorous regulation of online gambling sites, rather than
futile attempts at prohibition, governments can ensure that games are fair,
operators are honest and solvent and vulnerable players are protected. And
the governments could have reaped millions in taxes."

The IGC comments that the U.S. Congress has demonstrated little interest in
objectively researching online gambling before attempting to pass laws
against it. "In fact it specifically rejected attempts to include provisions
to study the possibility of regulation," the statement claims.

"This was a sneaky election ploy," Furlong said. "It's no coincidence that a
ban on Internet gambling is part of the 'family values' platform of the
extreme right, which wants to distract voters from real problems, such as
the war in Iraq, and at the same time impose its moral agenda on Americans,
depriving them of their freedom of choice."

The statement goes on to question the motives of major proponents of the
legislation such as Rep. James Leach and Senate Majority Leader Bill Frist
of Tennessee, who led the weekend manoeuver to pass the ban, saying
".....these moral crusaders showed their true political colors by exempting
Internet wagering on horse races and lotteries from their bill. In many
states, people are free to gamble online as much as they want on U.S. horse
races and state lotteries. In fact, in a research report in March, an
investment bank claimed that the U.S. horseracing industry now generates
over 15 percent of its revenue from online wagers.

"What a contrast between the U.S., which after all went through a
notoriously unsuccessful attempt to ban alcohol, and Britain, which is
methodically preparing to license and regulate online gambling, starting
next year," Smith said.