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Is the Malta Effect the new Butterfly Effect, which we know from Chaos Theory, that which ties the butterfly's wing flapping to greater changes in the atmosphere? The passing of the Gambling act in the UK is showing its effect in Malta. With the legalizing of online casino operations that are based in the UK or in the greater European Economic Area, companies that were previously based elsewhere in the world are moving closer. If the Act was designed so to draw casinos to the UK, it is pretty much a failure; with a 15% tax on casinos' gross profits in the UK, it is not an attractive option. Malta on the other hand is quite attractive, namely with its 2.5% tax rate. InterCasino and InterPoker are only the latest of dozens of companies to have moved their operations to the small country. A progressive policy is proving a smart economic choice, in the case of Malta and possibly other countries too. Proximity, inclusion and a low tax rate are a winning combination for the companies and for the hosting country as well. The Gambling Act may turn out to be a positive development for English gamblers, and even for the English economy. But it is clearly, already at this point, proving beneficial to other economies, or perhaps should be viewed as a positive development for the global economy.
With a hand full of bills being discussed in Congress, presidential candidates endorsing altering the current legal situation, chief opponents of the practice leaving office, intensive lobbying by various groups on the US Capitol, dramatic progress in industry regulations overseas, especially in the UK, and most recently an editorial in one of the nation's most popular newspapers, there are positive signs that the tides are indeed changing. Though the ban on online casino gambling is in place and seems to likely remain in place for the near future, perhaps for as long as the current administration sits in office, the groundwork is being laid for a change. This includes not only political maneuvers in Washington, but also a readying of public opinion, which brings us to the editorial published in Newsday this past week. Stating right off the bat that it is "time to regulate Internet gambling," the eighth largest newspaper in the US has taken a clear stand on the issue. Referring to the case brought to the World Trade Organization by Antigua and Barbuda, which resulted in the WTO siding with the small twin-island nation, the editorial described it as the mouse that roared on Internet gambling. The elephant in the story is, naturally, the US. If it were to comply with the WTO ruling, the once-largest online casino market will have to open up its borders to outside companies, such as any of the 30 plus located in Antigua and Barbuda, and regulate the industry, instead of passing laws that prohibit online wagering with offshore casinos. It might require more effort and open up American companies to competition, but the US will have to - or so the editorial says, reflecting a large and growing voice heard across the US - replace the ban with regulation. A safe gaming environment that protects users from fraud and screens out minors, in the spirit of the bill introduced by Rep. Barney Frank (D-MA), would not only be the right course to follow, but would even win the US government hefty income from taxes. In a geopolitical analysis of the situation, the WTO is being tested for its ability to enforce its rulings on the "elephant," not only on the "mice" in the world. This might be a mediating factor, in fact, as the integrity of the US is on the line, for next time it engages in any trade talks. In the meanwhile, the ban may remain in effect, but the groundwork is changing, the tides turning.
Bodog has been a popular sportsbook, serving American gamblers with horse races, casino and poker games. Its domain was provided throughout the years (it was founded in 1994) by technology licensing company 1st Technology LLC. A recent fallout between the companies, which brought the two sides to court and resulted with a decision wholly in favor of 1st Technology, has sent the betting company looking for a new domain. 1st Technology supplies advanced Internet and multimedia innovations. Some of its developments were the first of their kind at the time, and remain industry leaders. The company developed the first single integrated circuit chip with on-board video and audio compression in the world, among other broadband technologies it has introduced to the web. One of its clients was Bodog. The two had a fallout over what 1st Technology described in court documents as its licensee illegally using a "method and system for interactively transmitting multimedia information over a network which requires a reduced bandwidth." The case was brought to a judge in a federal court in Nevada in June, to which Bodog failed to appear and defend its stand. Judge Roger L. Hunt ruled in favor of the plaintiff, and ordered Bodog to pay it $48,937,456 for patent infringement. Bodog failed to appear again in a later court date, this one in Washington, to enforce the verdict. Judge John Erlick ordered all Bodog domains be confiscated and transferred to the control of 1st Technology. Since this order was given on August 21, Bodog cannot be found at their domains any longer. 1st Technology is in fact allowed by the court to auction the domain names or operate them in any way it sees fit. For now the domain names are simply down and nothing is found there. Intellectual property or a petty dispute? A company spokesman stated clearly that no company that has customers in the US is above the law. In other statements they seem upset about the ignoring treatment it received from its former licensee. Such ignoring is no longer the case. A Bodog spokesperson said 1st Technology is now in contact with its lawyers. On its site, befittingly called Newbodog, it states vaguely that it is encountering "DNS issues related to several of its Web sites." It adds that the site and all aspects are without change, only the domain new. Though Bodog may hold on to its customers and traffic with the new domain, though may not be so lucky with the $49 million, the case serves as a warning to other online casino companies. These days, as the US law is not accommodating with the gambling activities of Americans, there are various ways it can tackle the issue. Bodog may have added to the dispute by failing to defend itself altogether. But its bad break could be repeated with other companies. Surely the industry will be better prepared next time around.
Non-Partisan Bills As party Presidential candidates are heading towards the peak of their campaigns, about to enter the primary elections in the different states across the US; at this stage of the Presidential elections, a little over a year until the due date and a good year into the race, online gambling becomes a main issue on candidates' and voters' minds. One indication for this is the latest legislation introduced by Nevada Congresswoman Shelley Berkley. The H.R. 2140 was brought to the House of Representatives by Berkley (D), a follow-up step after the legislation by fellow Rep. Barney Frank (D-MA). Sixty other Congressmen and women have cosponsored her bill, which basically calls not for a repeal of the online gambling ban, which she nonetheless objects to, but rather for a thorough study of the situation and its optimal solution. The first step, according to Berkley and as stated in the bill, would be a study to be done by the National Academy of Sciences on behalf of the US government. The advantage of the bill, especially in these days of party partisanship in American politics about practically every issue on the table from gun-control to immigration reform, is that it does not side with either approach. "It doesn't say Internet gambling is good or bad. It says 'Let's study the issue,'" Berkley said. Bills Accumulating Berkley's name is not new to online gambling legislations and bills. Barney Frank can show about as many signatures supporting his Bill, H.R. 2046, also known as the Internet Gambling Regulation and Enforcement Act of 2007, a challenging bill to the infamous UIGEA. Rep. Berkley is one of the names appear on the bill. In fact, she is one of the first to sign it, doing so already in April. Besides the Study Bill by Berkley and the Frank bill, two others are on the table these days, making for a total of four initiatives that if combined could present a legit opposition to the administration's policy and even bring for a change in the upcoming year, ahead of the elections, or hint at a change that will come following the elections, with a new President in office. H.R. 2610, the Skill Game Protection Act, introduced by Robert Wexler (D-FL) calls for the regulation of poker, not its all-out ban. Games of skill, according to this bill, will be excluded from UIGEA. H.R. 2607, the Internet Gambling Tax Act, introduced by Jim McDermott (D-WA) calls for a 2% tax on all wagers. Not a ban on gambling, but rather a change of the I.R.S. code. On the Other Hand Following the resignation of Senate Majority Leader Bill Frist (R-TN), the recent resignation of Attorney General Alberto Gonzales, and with the gaining momentum of the Democratic Party Presidential candidates, it does not at all seem like the "other side," i.e. the pro-ban politicians have much going for them. Except, of course, for the current law in place. But for how long?
Russian tennis professional Nokolay Davydenko, seeded fourth in the world, has advanced to the final eight at the US Open with a win over Lee Hyung-taik. This in itself is not news, at least not in the tennis world. The 26 year old has reached the semi-finals in last year's grand slam tournament and is among the top favorites to reach the final stages this year as well. His presence at the tournament has other effects, however. Davydenko's name was tied to allegations, only recently, of match-fixing. Earlier in August, he withdrew from a match in the second round in Sopot, Poland, claiming he suffered from a foot injury. His opponent then, Argentina's Martin Vassallo Arguello, won the second round match 2-6, 6-3, 2-1. That game, on top of the controversial ending, saw seven million dollars in wagers placed on the Argentine underdog even as Davydenko won the first match. Internet betting sites refused to pay out on the loss and a probe was instigated. Now stories are being told of match fixing across the ATP tour, which has raised new awareness and brought the tennis governing bodies to act on the matter. ATP chief Etienne de Villiers has announced every rumor would be investigated and players who fail to report suspicions will be penalized. In addition, a committee will be established of medical specialists who will examine players who pull out due to injuries. It will begin work in 2009. Suspensions will be handed out to those who are not verifiably injured. On the bright side, the ATP has met a cooperative online gambling and sports betting partner in its fight against match fixing. Ten online gambling operators have reached an agreement to cooperate with the tennis body in tracing and reporting suspicious betting patterns. Though it is not the center of attention at the currently ongoing US Open - not as long as Roger Federer and Rafael Nadal are scheduled to meet at the Arthur Ash Stadium next Sunday - but does cast a shadow on the entire sport. Fifth seed, American Andy Roddick said that as a tennis player and fan, you do not want this to be the storyline. Roddick also congratulated the tennis bosses for "putting forth the effort to investigate it, take care of it and try to make sure it's an isolated incident." He added that he is quite sure it is indeed an isolated incident. While the ATP proves it has no tolerance of such scandalous betting and match-fixing, it is reassuring to find the online gambling join in on this policy and even lend a hand. It is a sign of maturity to have the now coming of age industry know what's best and pursue it too, namely a clean, fair and harmless gambling product.
The online gambling industry has seen tremendous development over the years, since its early days in the 90s. Once a small industry, it quickly became a multi-billion dollar industry. From a small selection of gaming sites, players are able to choose from thousands - literally thousands - of sites. The industry has grown to encompass the entire globe, speaking languages as foreign from English as China is far from London. The current stage of the industry is defined by regulatory efforts, a large-scale reshuffling of the sites and the rules that govern them. In the US, the policy was a ban of all financial activity involving gambling, de facto closing off the sites from American users. In the UK, an opposite course was taken, where the government has taken on regulating the industry, including bringing it closer to the mainstream, as in the advertisements allowed to air on television (effective today, September 1). Other modus operandi is the one pursued by the Swedish government, namely a state-owned online casino. Svenska Spel, operated by the government, is expecting a 40% increase in the amount of money bet over its Internet sites in the year 2007. Along with a 30% increase by the state's poker site, it will make for a record turnover for Swedish gambling companies, needless to say, with a sum greater than the 5 billion dollars reported in 2004. Other countries plan to follow in the Nordic footsteps. Holland Casinos will open up no less than 14 online casino and poker sites, after signing a deal with Cryptologic earlier this year. Opening date will be during the month of September. When the Swedes opened their sites in late 2005 and then added a poker site in March 2006, it was viewed by the world of gambling as a test-case with potential that far exceeds the Scandinavian country limits. Indeed, it seems like not only a successful way to keep gaming within legal and responsible limits, but also to generate tremendous profit.
The UK Gambling Commission is up and running. With the newly revised and timely Gambling Act implemented in full as of September 1, the Commission is now the leading authority in all matters online gambling concerned. One of its first measures was soliciting a survey, the first of its kind in eight years, carried out by Birmingham University academics in cooperation with the National Centre for Social Research. The official release is due later this month, but the British press has already come out with a few headlines and the industry as a whole has made noteworthy commented. The Numbers The main news that comes out of the survey is the number of people based in the UK who regularly gamble online. Nearly a million regular online gamblers are active in Britain. It makes for a third of the 3 million gamblers in Europe. With each gambler spending an average of 1,000 GBP over a year's time, the industry rolls a billion GBP. But the survey asked another question - no less important - regarding problem gamblers. While eight years ago, problem gamblers made for a fragment of a percent of the adult population, estimated to be between 0.6 and 0.8 percent, it is now estimated at nearer 2 percent of the adult population. This makes for 300,000 people, by all means a phenomenon to cope with. What's Ahead The Gambling Act was generally welcomed with open arms. It was and is still viewed as a liberal policy, a move towards accepting the casinos and certainly far from the US policy of banning them altogether. But is that really the case? Some industry insiders suspect that the intention, at the end of the day, is the contrary, i.e. that the industry "will seize on any increase in problem gambling to clamp down on the industry or hit it with punitive tax rises," as one unidentified industry executive was quoted saying. The industry further fears that certain factors opposed to online gambling - be they land based casinos operators, some of whom saw their plans to establish as many as 16 casinos across the country scrapped by Prime Minister Gordon Brown, and other conservative elements - would influence policymakers and help water down the Act even more. Prophecy Given to Fools, and Yet Although it is said that prophecy was given to fools, we will try and paint the future in general lines (and limited guarantee). The industry employs 200,000 people in the UK. It also accounts for 1.2% of the country's GDP. The Gambling Act is a way to maintain the positive contribution to the economy and keep the gambling in check by protecting the users. Though continuity was lacking until now, this is the main contribution the Act may bring to the industry. With this established, gamblers too will have better knowledge and comfortable access to help-lines and other organizations that help problem gamblers. That the number of problem gamblers is up is no surprise; the industry was still young at the time of the last survey. The new numbers would instead serve as a base-line by which future levels of problem gambling could be judged and goals set.
The first TV ad ever! Alright, maybe we should not be so dramatic, as television and television ads have been part of our lives for long years, as have online casinos as a matter of fact. But a television ad for an online gambling site is a first. It marks a new day for all the industries involved. The first ad to be broadcast in Wales and north East England conveys this festive feeling of good times. For many, these truly are good times; in fact, it seems to be improving from here on. Is this so? Are the new gambling laws in England, those that allow for pictures of actual playing at tables to air on television and place online casinos alongside commercials for laundry detergent and automakers, good for all? Besides the effects on the gambling culture and community, television stations will now enjoy a new market, and a wealthy one at that, competing over the air wave, paying top dollar (pound or euro) for 30 second spots. Online casinos from across Europe - numbered in the hundreds - from territories that are allowed to advertise under the new law, will send their ads to the UK with large sums of money. The traffic would actually center on the UK, for it being the first to allow the ads to air and at a time that casinos are banned from other markets. The same will follow on buses driving into the cities, on radio stations and other media hosting commercials, including, naturally, the Internet. Many industries will profit from the new age of casino ads. But there is also the effect on online gambling, legitimizing the industry and raising issues of social responsibility. While the UK government regulators have put together a white list that allows gaming operators in other European Union countries to advertise in Britain, it has in other statements said not to ban people living outside the UK from gambling at UK-based casinos, saying "It is up to the consumer what they do." But that would not be the case with regard to the English gambler. The government will protect UK-based gamblers. James Purnell, the UK Culture Secretary, said in a statement, "Protection is my No. 1 priority." As it ought to be. The UK experiment could prove that online gambling can coexist with responsible gambling, legit operators, mainstream media and not entirely protectionist policies.
Entering the Chinese market - mass in size and with a growing economy of affluence - has long been of the main target goals for online gambling operators. Yet, while the industry has overcome many hurdles along the way and has reached its current status of a billion dollar business with growing numbers and increasing legitimacy, China has by and large kept its doors closed. Moreover, the largest market in the world for mobile phones is a prime target for mobile gambling. But this too is being kept on hold. Beyond China, the same could be said for all of Asia, or South East Asia at the least. Multiple currencies, languages and scripts, a different business culture and the ultimate problem - corruption - have all been cited as problems. Then there is also a legal barrier, with local laws not always allowing online gambling. Other factors must be taken into consideration when making promises or predictions regarding the future of casinos in Asia. One such is that online casinos require spare time, which most people on Japan, for example, lack. Internet cafes too must be affordable to justify spending an hour or two gambling. Other countries, like Thailand, block online casino sites altogether. It is illegal in the otherwise-liberal country. Poker is yet another problem. While it is the leading game in the West, Asians have largely never heard of the game. A couple of major sportsbook operators have actually pulled out of the Asian market in the past after suffering losses, raising question marks regarding spots betting in the East. Meanwhile on land While online casino gambling is facing legal and cultural barriers, the largest land based casino in the world has opened last week in Macau. The Venetian Macau opened on Tuesday. Taking up 10.5 million square feet on the Cotai Strip - the casino strip in Macau - the new Venetian includes 3,400 slot machines and the potential to nearly double that amount. With other casinos planned to be erected around the Venetian, it is a clear sign that gambling is an attraction in the region, and perhaps it is its online version that needs adapting to the environment. So what will the future bring? Of course this can all change. Some online casino companies have already set up shop in Macau and have been developing software specially catered for Asians, often developed by Asian engineers and specialists. While China is considering legalizing (and probably capitalizing on) the industry, there is a growing scene and demand in the Philippines. The hopes are for the trend to spread from there to other countries, perhaps with the leadership of China, or by entering small-country after small-country. Time will tell if, when and how this might take place.
The Gambling Act 2005 - the much talked about legislation enacted in the UK on September 1, 2007 - has legalized and regulated the online casino industry overnight, with strict rules and standards to abide by. At the same time it has scratched plans that were already on the table, some at advanced stages, to establish 16 casino venues across the country, including one mega-casino in Manchester. Today we learn that the end of casinos is not imminent. On the contrary, Wales' biggest casino opens up today in Swansea. With it are the familiar voices heard for and against casinos and gambling. First, some info Aspers casino, to open September 6, is a 13 million GBP investment that is expected to draw as many as 10,000 gamblers a week. At this pace, it will return the investment in less than three years, raking over 4 million GBP a year. The casino will employ 300 people and take up 45,000sq ft in the city commercial center. So what's the problem? Some are opposed to building new casinos from the outset. Salvation Army, a vocal critic of gambling and a blessed organization that helps fight gambling addiction, claims 370,000 British citizens are defined as problem gamblers. Elsewhere, slightly smaller numbers are quoted. But this is not the argument. Aspers said it has been training their workers to help and deal with problem gamblers. Normalizing the industry by establishing new casinos and allowing advertisements on television too will not lead to an increase in the problem, but rather help the industry step out of the shadow and into where it belongs - as a popular pastime for millions. Casinos Then, Now and Forever OK, this might be a dramatic statement. It is used only for the rhetorical effect. Casinos have been part of British culture for many years. Swansea was the host of a casino for 40 years, no less. They are justified in more than one way, now an entertainment center much larger than a mere smoky gambling joint. Gamblers and regular visitors can find good restaurants, fancy cinema screens, musicals and theater and much more. Sure, licensing and regulations are a must. So is promoting helplines and organizations like Salvation Army. But ignoring past history and resisting the present developments may simply leave the opponents out of any future scenario.
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