Europe's confused Gambling Policy: UK has it together

Much recent press has focused on the US Internet Gambling Enforcement Act of 2006 recently passed by Congress and about to be signed by President Bush. That legislation does not make it illegal to gamble online (only the 1961 Wire Act specifies that using telephones to bet on sports is illegal). Instead, it makes it illegal for any bank, credit card company or financial intermediary to process transfers to or from an online gambling site. After the next 270 days during which a Government board comes up with the procedures for financial institutions to follow, US customers will find it much more difficult (though according to analysts no where near impossible) to fund their online gambling accounts.

In reaction, several online poker firms such as PartyGaming (PartyPoker), 888.com (Pacific Poker) and Playtech (Titan Poker, CDPoker, Noble Poker) announced they will no longer take US customers. Instead they say they will focus on Europe, Asia and other growing markets.

So what is Europe's attitude towards online gambling??

The UK is working an orderly plan to legalize, regulate and tax online gambling, as well as to identify and offer help for problem gambling. September 2007 is the date when all measures to support legalized online gaming will be in place and licenses issued.

"It is a government wide policy, and that includes Her Majesty's Treasury, that Britain should become a world leader in the field of online gambling, in order to provide our citizens with the opportunity to gamble in a safe, well-regulated environment," said a briefing note for Gambling minister Richard Caborn before a meeting last July with Betfair.

Indeed, records released under the Freedom of Information rules show that UK ministers and officials are getting quite cozy with online gaming executives, having met with them no less than 26 times in the past 2 years.

The Honorable Mr Caborn has met with heads of the PartyGaming and 888.com group in Gibraltar. Secretary of State for Culture Media and Sport, Tessa Jowell will run a gathering of politicians from around the world at Ascot racecourse at the end of the month to discuss regulation of the Internet industry.

Italy declared at the end of last month that they too will start down the road to legalize, regulate and tax online gambling. The Italian government plans to collect a 3% tax from gambling companies on revenues that Italian customers generate. They announced they will use a model similar to that of the UK. (see related PokerPages article on Italy legalizing online gambling)

In other European and Asian countries the policy towards online gambling is not so clear, as many countries still run government-sponsored monopolies and forbid licensing of or even marketing by private companies.

The World Trade Organization (WTO) ruled that China could not block US advertising that competed with the Chinese state-sponsored monopolies. (Ironically, the US continues to ignore the WTO rulings that the US stop protecting online horse betting and online lotteries exempted by the Wire Act of 1961, in a case brought by Antigua and Barbuda in 2005.)

The European Union has repeatedly ruled that EU countries must stop protecting their government-sponsored monopolies and must permit competition from private companies. Sweden now complies. But several countries, notably France and Germany still ignore EU rulings.

Two top executives of Austian- based Bwin Interactive Entertainment were arrested in France last month en route to a news conference announcing a sponsorship deal with AS Monaco, a soccer team that plays in the top French league.

Though later released, they were charged with violating French law, which reserves gambling for two state-sponsored companies. (see related PokerPages article- France Arrests Bwin Execs for Violating French Gaming Laws )

In Germany, government-sponsored companies technically hold a monopoly over gambling, but enforcement has been left largely to individual states. This has lead to some interesting wardrobe changes.

The professional German soccer team, Werder Bremen, in a recent home game appeared in jerseys emblazoned with the words "We Win!" It was not the power of positive thinking. Rather it was an oblique reference to the team's sponsor, Bwin, whose logo has been banned in some parts of Germany. But when in locations with more tolerant authorities, the team dons jerseys showing Bwin's logo.

Bwin has been operating under gambling licenses that were granted by the East German government shortly before it ceased to exist. With a marketing budget of $50 million a year in Germany, Bwin has attracted 300,000 customers to its online sports bookmaking service in Germany alone.

Borrowing the strategy from their German counterparts, one of the French soccer teams, Toulouse, sent their players out with jerseys saying, "???.com," which was a cheeky reference to the team's sponsor, 888.com, owned by 888 Holdings.

Because of the recent US legislation to prevent funding of online gaming accounts, online gaming firms are very eager for Europe and Asia to clarify and evenly enforce pro-online gambling policies.

The European Commission has already started an investigation of several EU states' policies regarding online gambling, and has said it may announce action against them as soon as this month.

PokerPages will continue to monitor policy progress.

See Related Stories:

Italy legalizes Online Gaming

France Arrests Bwin Execs for Violating French Gaming Laws

Related Articles about US Online Gaming Policy:

Congress Shocks Online Gaming Firms- Outlaws Payments

Reactions to Intenet Gambling Act

Banks React to Online Gaming Legislation

Antigua builds WTO Case Against US