Monday, August 02, 2004

Can the US find a way back to online gambling?

Could U.S. bid to curb gambling on the Web go way of prohibition?

With all the anti-online gambling stories that make their way from across the Atlantic, and the uncertainty about whether the 'wire act' can really prohibit online betting, its a refreshing change of pace to find a US news website presenting the facts about the current industry.

Using the recent £50mil+ BetonSports floatation as its inspiration, the article discusses the growth of the industry and events concerning the US stance.

It writes:
- U.S. opposition to Web gambling has hurt Antigua and Barbuda.... The industry employed 3,000 people and was responsible for 8 percent to 10 percent of the nation's GDP
- But then the U.S. cracked down.. In 2000, the Justice Department successfully prosecuted Jay Cohen....who was running a betting operation called the World Sports Exchange from Antigua..In 2002, after New York Attorney General Eliot Spitzer went after Citibank and PayPal for processing credit-card payments for online gambling, both agreed to stop.
- Last year, the Justice Department notified the National Association of Broadcasters that accepting money from Web gambling advertisers could be considered "aiding and abetting" an illegal activity....The result: Online gambling ads vanished from Google, Yahoo and Howard Stern's radio show, among other venues.
- In part because of U.S. actions, Antigua and Barbuda says, its gambling industry has shrunk to only 31 licensed companies from a peak of 112, and it now employs fewer than 500 people
- In March, a WTO court sided with Antigua and Barbuda; the two sides have said they hope to negotiate a settlement by Aug. 23
- If Antigua wins, other countries could bring similar charges against the U.S

The article goes on to discuss recent developments in the UK and Australia and the reality that whatever happens, the US will really be unable to stop the increase in online gambling.

At the end of the day, if the US continues to take an aggressive anti-gambling stance they could lose out on additional revenue and return to the dark days of prohibition leaving the door wide open for backstreet operators. It will be interesting to see the outcome of the talks between Antigua and the US this month and whether the US can begin to make way to look at regulating what could be an important industry for them.

Conversely it may still boil down to the bible-thumping middle america that has made huge inroads in forming governmental policy - leaving the case for online-gambling trailing in its wake

posted by jo @ 4:35 PM   0 comments

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