Europe blazes ahead legalizing online Poker, egaming

Europe is wasting no time moving forward to regulate, not prohibit, 'egaming' and criticizes the US Unlawful Internet Gambling Enforcement Act (UIGEA), saying prohibition will not work.

The U.K. government will be hosting the Remote Gambling Summit at Ascot Racecourse next Tuesday, October 31st, where politicians from 30 countries will be gathered to promote and debate regulation of the online gaming sector.

Several countries have already laid groundwork which will enable them to regulate and tax the egaming industry, rather than outlaw it: the U.K., Italy and Belgium.

The U.K. Gambling Act, which was approved in 2005 and will begin in 2007, will extend Internet licenses to gaming companies, adding to the bookmakers which it currently licenses. Chancellor of the Exchequer Gordon Brown may include fiscal incentives in the 2007 budget for offshore operators to seek U.K. licenses. The U.K. began licensing private Internet gaming sites in September.

In addition, the U.K. has gone farthest to take measures to truly protect its underage citizens and compulsive gamblers. They are asking egaming firms to include special code in their gambling software to enable regulators to monitor for underage players and to watch for patterns of compulsive gamblers. The U.K. has also supported the launch of an instant online gambling counseling service called GamAid.

Italy recently voted to let companies offer online lotteries, bingo and betting on sports or games of skill next year, though they will continue to ban online poker.

Belgium is working to change its legislation as well, and private companies are already allowed to offer sports betting in Austria.

Ladbrokes spokesperson Ciaran O'Brien summed up the European perspective on not prohibiting egaming well in a statement issued this week, saying, "The attempt to prohibit online gambling in the United States is doomed to failure. Over 20 million people play online poker in the United States and they will continue to play while there are sites willing to accept them. Unfortunately many of these sites will not adhere to standards of social responsibility or player protection."

O'Brien noted that gambling was a massive industry in the United States and "the legislation there is aimed at protecting vested interests rather than consumers."

"The UK Government is taking the right approach enforcing high standards of regulation in return for licensing and regulation that protects and reassures consumers is the only way forward. This will ensure gambling is kept free from crime, is fair to the consumer and protects the vulnerable and under-aged," added O'Brien.

In addition to the legislation of individual countries, The European Union (EU) is pushing countries to end measures protecting domestic or state-run companies. The European Commission put Italy, Germany, Hungary, the Netherlands, Sweden, Denmark and Finland on notice in April for letting state lotteries offer online sports betting, while barring rivals.

Financial Services Commissioner Charlie McCreevy said in September that eight more EU countries might be added to that earlier April list of seven countries already facing legal action for refusing to open their betting markets. Poland got a final warning before a possible lawsuit for taxing foreign lottery winnings more than domestic jackpots.

On October 12, McCreevy targeted France and Italy for shielding domestic sports bookmakers, and scolded Austria for restricting advertising by foreign casinos.

And on October 21 Bookmaker Ladbrokes said it would issue a complaint to the European Union after losing an appeal case in the Netherlands preventing it from accepting bids from Dutch citizens.

"This is protectionism in the extreme ... The state operator has instigated legal proceedings to protect their monopoly position and the national courts are supporting them. This is a clear breach of EU law," Ladbrokes Managing Director of eGaming, John O'Reilly, said.

Paul Renney, a partner specialized in the Internet at law firm Addleshaw Goddard LLP in London, says he expects lobbying to increase to open the EU market further.

"European countries like the U.K. that take a more enlightened approach of regulation, not prohibition, stand to gain," said Renney.