Saturday, October 28, 2006

The British government plans next week to seek international support for
legalized, regulated online gambling, emphasizing a trans-Atlantic
difference on the issue after the Bush administration's recent move to
outlaw transactions with Internet gambling services. During a conference
scheduled for Tuesday at the Royal Ascot racecourse, the British government
plans to seek adoption of a broad code of principles on Internet gambling,
according to a person briefed on a communiqué prepared by the British
delegation. Officials from more than 30 countries are expected to attend,
though the U.S. Justice Department has declined to send a representative. In
contrast to the United States, where President George W. Bush this month
signed into law a bill that bans credit card companies and online payment
systems from facilitating Internet bets, Britain last year moved to legalize
online gambling. "We believe that tough regulation is a better approach than
a free-for-all or prohibition," Anthony Wright, a spokesman for Tessa
Jowell, the secretary for culture, media and sport, said Friday. "We will be
looking to secure agreement to the principles for international standards of
regulation." Wright's comments echo remarks attributed to Jowell that were
reported in The Financial Times on Friday. She, too, alluded to the U.S.
prohibition of alcohol from 1920 to 1933, saying the move to ban online
gambling could lead to the creation of "modern-day speakeasies," driving
Internet gambling underground and into the control of criminals. The U.S.
Justice Department did not immediately return a call seeking comment. Some
analysts say the British move to legalize and regulate online gambling
companies could create financial benefits for the government by allowing it
to tax companies that move back to Britain from offshore locations like
Gibraltar and Costa Rica.

But the stock prices of online gambling companies, several of whose shares
are traded in London, fell after congressional passage of the U.S.
legislation. America has been the largest market for these companies, though
several of them have stopped taking bets from U.S. gamblers.

The person briefed on the proposed communiqué, who requested anonymity
because he was not authorized to speak on the issue, said it was modeled on
the principles of the recent British gambling legislation and was aimed at
promoting fairness for gamblers, keeping out crime and making sure children
and vulnerable people were protected.

The proposal apparently does not address one potentially sensitive area,
state control of gambling, over which Britain disagrees with some of its
neighbors. Several of the countries scheduled to attend the conference,
including France and Germany, have recently moved to protect lucrative
state- sponsored gambling monopolies from online competition.