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.