Why Gibraltar?Published August 16, 2004 by OCR Editor
Did you ever wonder why so many of the great online casinos you play at are located in small, obscure islands throughout different corners of the earth?
Why aren't these online casinos located in the USA if they are all in English and the majority of the client base is also in the US? Read on to find out the answer to this provocative question.
In December 2002 the U.S. General Accounting Office reported that online casino gaming had worldwide revenues of more than US$4 billion, with roughly half of that total earnings coming from the United States. Ironically, in the United States it is illegal to run an online gaming company. Despite this fact, many gaming sites are succeeding in playing a significant part in the world of online gambling.
Internet gaming got started around 1995, and since then, 73 governments have approved some form of play. Recent consolidation maneuvers may knock the number of sites down a bit, but that does not mean the industry is in decline. As David Carruthers, CEO of Internet gambling site betonsports.com puts it "This industry isn't different to any other. It's growing and stretching to meet demand. We've had meteoric growth in the last three to five years."
Yet some U.S. legislators are pushing for an all about online gambling prohibition. Pat O'Brien, an attorney at Greenberg Traurig who specializes in representing online gaming companies explained that that the United States Government would like nothing more than to make online gambling illegal.
Doing business as an online gambling company in the United States is already illegal, this is why all online gambling sites must be run from outside the country in places like the Caribbean and Gibraltar where it is not illegal. Betonsports.com is located in Costa Rica, and other sites are spread across the globe, with companies based in Europe, Asia and especially the Caribbean.
Carruthers said that the American craze to wipe out online gaming seems to be more rooted in certain legislator's belief that gambling is immoral than the actually will of the country's citizens. "Online gaming is entertainment," he noted. "It's not one of the seven deadly sins. But some people think it is." Ironically it already exist in the US at land based casinos across the country.
law demands that any online gaming company adhere to state laws -- but at the moment most states do not have specific Internet gaming laws. "There are problems all the way down the line," O'Brien said, "because the Justice Department takes that position that it's all illegal. But they're wrong."
Despite the cloudiness of current legislation, O'Brien said companies have decided not to risk prosecution, so they choose to run their businesses from outside the United States instead.