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While all recent developments in the online gambling industry have focused on the United Kingdom - be it the Gambling act taking force on September 1 or the much publicized study about the state of the (gambling) nation and the responses it drew - it is now turn for the United States to take over the news headlines. The issue seems to be back on the table. If not literally on the table, then on Capitol Hill, in court and on peoples' mind, no doubt. These developments are interesting and even dramatic. The issues are material and the potential consequences substantial. And yet, the endgame is status quo. How come? It was reported this week that American companies MasterCard and Visa have lobbied Congress and the federal government over the first half of the year and spent hundreds of thousands of dollars in doing so. Their stake in a removal of the gambling ban is considerable. Their investment, though, in sums of money and in its public profile, somewhat minor, however. More interesting perhaps, at least in presenting some kind of timeframe, is the US battle against the World Trade Organization ruling that sides with the Caribbean nation of Antigua and Barbuda over the ban. The US Department of Justice has been trying to protect its legislation restricting Americans from gambling online, but its response seems not to be convincing, not to the WTO court and certainly not to its challengers in the Caribbean and in the European Union. This spells out to an American offer to compensate the EU and other countries for pulling out from the free online gambling market. The compensation package is being evaluated and the EU is expected to submit its official response in a month, on October 22. What offer can equal the estimated $4 billion that European companies are losing around the world for the loss of the American market? Add to that the $3.4 billion that Antigua claims it loses every year due to the ban and the US is in a tight spot. Needless to mention that the US disputes the figures. What the US will be willing to pay, in what form, and what the world will settle for is anybody's guess. What Rep. Barney Frank's role will be in bridging the gap between the sides and what the big industries and the conservative politicians have to say in response too is a wild card. With all this going on, the only thing that remains quiet is the US gambling market.
The legal battles taking place in the United States over the fate of the gambling ban are all over the news. At the same time, legal processes are taking place at the WTO and elsewhere around the world. Also in the news are developments from the leading online gambling market of the day, the United Kingdom, where a new system is in place, which regulates the market and even allows for advertisements on television in which people can be seen gambling. While these measures are being implemented and contested, be they advancing or limiting the business, there are enormous sums of cash on the table. Why is the Las Vegas industry fighting to protect its monopoly on gambling in the US? Why are the British interested in being the first to offer their land to become a major European hub for gambling? Why do small nations such as Antigua and Barbuda battling giant windmills in hope of keeping its local casino headquarters in the game? Just as Douglas Adams, in his classic Hitchhiker's Guide to the Galaxy, said 42 is the answer to the question What is the meaning of life, the answer in this case is 144. In billions. Of dollars. One hundred and forty four billion dollars. That is the estimated value of the global Internet gambling industry, according to global business and market analyst company PricewaterhouseCoopers LLP. This explains a few things. At least we believe it does. For Antigua, whose GDP is around 6 or 7 billion dollars, a 3 billion dollar business located on its small island in the Caribbean is considerable; certainly not dispensable. The same goes for England, who might capitalize on a multi billion euro industry and become its leader or main benefactor. With every coin we drop in a slot machine at an online casino, we fuel not only our own, private entertainment. It goes beyond the progressive jackpot, too. It reaches the ultimate high levels of the expanding and all-encompassing global economy. And from there, it reaches the high offices where decisions are made. On their table are enormous sums. Billions of dollars.
Think about progressive jackpots - constantly on the move, with new players joining and the amounts moving, moving upwards. The online gambling world follows much the same trend. It too sees new costumers joining on a daily basis, by the numbers, pushing the stakes ever higher. Dynamic. That's the word to describe this classic Internet industry. It moves, changes course, with the general direction of up. For anyone who wants to be part of it, moving along is a requirement. Staying in one spot will have you fall behind in no time. In the recent case discussed at the World Trade Organization court, in which Antigua has asked to repeal the US decision to ban online casino companies based overseas from serving American players, the US response has been static; even doubly static. It has, first of all, attempted to prevent online gambling sites from entering the US market altogether, preferring the old industry of land based casinos, successful and popular as it may be. Additionally, it has proven stubborn and unimaginative when it has repeated its counter arguments in the legal discussions time and again, repeatedly claiming the ban is valid and the opposition groundless. This will get them only so far. In fact, it will get them nowhere. As the industry keeps flowing and moving, the US stubborn stand does not. By definition it does not. Policies of yesteryear will not be applicable next year. Here's my bet that this will prove the case this time again, for if there is a recurring principle in the business, it is that there is no timeless principle.
After the entire world learned the real extent of problem gambling in the United Kingdom, as it was reported in the official survey, the largest of its kind in eight years, that was solicited by the Gambling Commission, we are left with the main question: What is problem gambling? First we shall acknowledge the different studies, all welcome and contributing to the better understanding of the culture at large, which estimates the extent of the phenomenon. While we will assume the numbers of about 250,000 addicts (of the 3.5 million Brits who gamble online regularly) are the true numbers, other studies claim a fifth of regular players are in danger of becoming addicted; other numbers and ratios abound. The line between a regular player and an addict with a problem is to be found in the private lives of gamblers. Neglecting one's family, job, essential needs (food and sleep) and even personal hygiene are loud and clear signs. Another aspect of problem gambling is when underage players, who lack any other commitments in life and who do not know better, short of life experience, are drawn to the sites and gaming. They are either already problem gamblers or will become in time. The addicts have recently appeared in somewhat surprising places. In the Netherlands, where addiction rehab centers are run and the awareness of problem gambling exists, some gamblers end up at drug and alcohol centers. There are developing programs to treat problem gamblers. There are even more programs that help prevent a problem from developing. Non-profit organization, religious institutions, professors, professionals, and the casinos themselves are working on developing these programs. There are all other ways to look one self in the mirror and ask: is everything under control? For the most important element of gambling, along with the fun of playing, is control.
After signs of optimism, though mixed with skepticism by some business analysts, regarding the possible opening up of the French online gambling market, reassurances come from the highest offices in France's government. French budget minister Eric Woerth said in an interview to AFP that the government is not against a regulated online gaming industry. While the European Union member countries are battling the United States in the World Trade Organization courts over the unfair trade practices regarding online gambling, they are also concerned about the independent French policy, denying free trade as it operates a state-run gaming monopoly. The EU Court of Justice granted the independent-minded, contrarian country until October 29 to change its laws. In his positive and reassuring remarks, Woerth allowed for a possibility that the laws will be revised so as to grant private online gaming operators to cater to French Citizens, though he said this will be regulated and monitored so that not just any operator would be allowed to do so. Perhaps the EU's request of $100 billion in compensation from the US over its unfair trade policy has alarmed the French. But it should be noted that the French have never been all out against online gambling. In fact, the country has never technically banned its citizens from taking part in such activities, though it has outlawed licensing of gambling companies. In the upcoming talks involving the French government, its gambling monopolies, the European Gaming and Betting Association (EGBA) and Betfair among others, France will probably raise their condition to have any gambling company have to establish a branch in France to receive legal status. It is agreed on all sides that dialogue is an encouraging, positive development. The difference, however, are considerable. Would France follow in the US steps, perhaps adopt the Norwegian policy, which tends to follow the American ban it is so believed, or join the EU and the English leadership in regulating the industry, is left to be seen. The deadline, as mentioned, is the end of this month.
News keeps on pouring in from North America, where the United States Treasury Department and the Federal Reserve have passed yet new regulations to enforce the ban on online gambling. At the same time, across the ocean, other countries are enjoying a new, regulated and well-managed gambling policy. Not only do the gamblers enjoy this liberal approach. The countries themselves, and their economies too, are benefiting from it. In a symbolic move by Canadian online gaming company Veridigm from Vancouver to Dublin, the destination city will enjoy 100 new jobs. While Canada has lost its edge, which it previously held as a neighbor of the American market, at a time consisting of over 50% of the global gambling market, Dublin is one of several new such centers, most of them by no coincidence located in Europe. A growing industry as the online gambling industry is best nurtured in an evolving economy. Europe has wisely taken on this role. Dublin, and Ireland at large, if not Europe in general, supplies the technology resources and skills to draw such attractive companies, and benefit from the new jobs it will bring along with it. Jobs are another aspect on which the North American market will lose on, as a direct result of the online casino ban. At best, the former Canadian-based headquarters will be their second offices, as Dublin becomes their development and management centers both. Business-friendly Ireland has already seen another, California-based gaming company, Tiltware, move its offices to the city of Dublin. That brought about 200 new jobs to the city.
Massachusetts Congressman Barney Frank is one of the best known names around the gambling community. The democrat who has helped advance the Internet Gambling Regulation and Enforcement Act (IGREA), and has done a good job in keeping it as a valid alternative to the current legal status, namely a ban on online casinos, was joined by another Congressman. Fellow Representative, William Delahunt, also from Massachusetts, signed up in support of Frank's legislation. Delahunt was, until one week ago, an opposing factor to the UIGEA bill; he has even voted against it last year when it was passed on the Capitol. Now he is even an IGREA supporter. Support has grown, currently numbering 37 co-sponsors. But, as Frank himself has expressed, it is not enjoying as much wind in its wings as it earlier promised to hold. The sluggish momentum is a disappointment for many gamblers across the States, as well as across the world, and for Frank and co-sponsors too. In fact, the Congressmen are not planning any dramatic moves fro the rest of the year, perhaps as they await their parties' nominations for the Presidential race. The bill, meanwhile, sits in the House Energy Subcommittee on Commerce, Trade and Consumer Protection. The good news? Frank said clearly that the bill "is not dead." said Frank. Gamblers, he said, have a role too in its development and potential success. They are asked to contact their representatives and express their interest in reversing the legal developments of the past year.
In the dispute between the US and the rest of the world, namely Antigua and the European Union, over the ban implemented, unlawfully, or at least unfairly, as the WTO declared, the US is facing some ludicrous demands for compensation. At least that's what the US claims. You would probably agree that 100 billion dollar sis an immense sum, practically unimaginable. But that's the sum the EU has come up with for having its casino companies blocked off for US gamblers to visit and bet at. The US? It claims the right sum, a fair deal, would call for a mere half million dollar compensation deal. It would be comical, if it wasn't so dramatic. If it reminds you of a Hollywood movie, you're not far off. Hollywood, fearing the implications of a failed deal, which will mean their intellectual copyrights be forsaken, is lobbying its government to reach a settlement. The difference to be bridged in 99,999,500,000 dollars. Antigua's case, though it reached a decision in its favor, is expected to end up in a settlement of a few billion dollars at most, if it goes Antigua's way. The small Caribbean island does not even have a stick to hold and make the US comply in full. But the EU's involvement, with its strong and somewhat nervy demands, may serve Antigua as well, and most significantly, hurt the US. Will they accept small change and other measures, such as easing off restrictions and tariffs in other sectors? Once the sides sit around the table to talk, we might find that they will. For online casinos are by no means the most important players to protect, as far as the governments are concerned. But what package will amount to equal such enormous sums, is left to be discovered. In a month or two, the case will return to the WTO. In the meanwhile, it will be followed closely by us.
Sweden has solidified its policy with all that regards online gambling by establishing a state run, monopoly online casino, which provides gambling services to Swedes, regulated and modified by the government. Part and parcel of such policy, the National Institute of Public Health in Sweden has conducted an expansive survey in the country to measure the extent of the gambling phenomenon in the country, and keep track of a potential gambling problem, which may arise under such circumstances. The survey, conducted over an entire year, has sampled 16,500 Swedish adults, a considerable number compared to surveys held in any industry. Based on this sample, it was found that between 126 000 and 157 000 Swedish adults play poker at a once per month basis, at least. These masses visit the only site available to them, the abovementioned state run Svenske Spel. They are mostly men, with 9 or 10 poker players of the male gender. Their ages range mostly between 25 and 40. With a focus on poker, the study revealed that players tend to spend more at virtual poker tables when compared to playing other games on casinos, even when the same players are concerned. They are also more likely to become problem gamblers when compared to players of other games. The numbers point at a success in operating the casino site and managing the business in country. The study also shows that the government is concerned and aware of a problem evolving and intends to prevent it. It also, however, shows that a problem may arise if not checked, by government, the providers and by the gamblers themselves. As such, the survey is a clear call for taking caution. Swedish gamblers: försiktighet!
It may have taken online gambling companies a little over a month to finally air a television advertisement in the UK, now permitted under the 2005 Gambling Act, but it has proven to be worthwhile. The first company to launch a TV campaign was Ladbrokes, the UK and Ireland's largest off-track bookmaker and operator of successful casino and betting websites. Its ad aired earlier this week, and is to be followed by additional ads under the same 5 million pound campaign and ads by other companies as well. The Pitch The ad features familiar English faces, though dressed in dirty work clothes, wearing hard hats and taking a coffee break from what seems to be a hard day's work. The faces are TV personality Jimmy Hill and former football players Ally McCoist, Ian Wright, Lee Dixon and Chris Kamara. The Catch While appealing to regular English men and women (the young waitress has a comic appearance in the long version), the ad maintains star power this way. The familiar faces only add to the main pitch that online gambling is for everyone, including you and me, as its motto says: "Everyone's got an opinion, what's yours worth?" Furthermore, the football theme will surely help not only this advertiser, but the entire industry, reach large crowds and potential clients. By airing the ad during halftime of the Manchester United and Roma match in the Champions League, millions of viewers were exposed to the industry. The Bottom Line It is clear that Ladbrokes has invested a lot in the ad campaign. The millions invested, the long months of planning (the campaign has been in development since January, well ahead of the Act taking force), and the hiring of advertising strong horse M&C Saatchi are clear indications for this. It is wise to be targeting the obvious potential market, namely 18-34 year old casual gambler, who can be found on Sunday night watching a football match with friends in front of the TV set. This has received the comment of Chris Bell, CEO of Ladbrokes, who stated, "These ads capture the fun of having a flutter on football and testing your opinion - something millions of people already enjoy every week. We're pleased to be the first to air with betting advertising." Perhaps the first, but not the last.
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