Busted flush for online gambling

11.10.2006, Lesen Sie hier den Bericht über «Busted flush for online gambling»

ANDY McIver, incoming chief executive of Sportingbet arrived in Milan with his family for a long weekend recently to celebrate his wife's birthday and the news that former chairman Peter Dicks would not face charges in New York relating to the company's activities.

The celebrations fell flat, however, as Mr McIver learned from the US that the Republicans were winning support for a bill to make it illegal for financial institutions to handle US transactions related to internet gambling. In Gibraltar, home to the world's largest internet poker company, Party Gaming, and its rival 888 Holdings, alarm bells were also ringing. Anger turned to despair as the bill went through the Senate and into law.

Sportingbet reacted cautiously by announcing it would review its options on what to do about the US. Party Gaming and 888 were less equivocal, announcing an immediate suspension of operations in the US. The result was brutal, as the stock market wiped more than £3 billion ($7.5 billion) off the value of the three biggest companies in the sector early last week.

Many smaller operators suffered similarly calamitous falls. The Bill was the culmination of efforts going back several years by a few Republican politicians wanting to clamp down on what they regarded as immoral business. Those in the betting industry suspect the Bill's passage had more to do with political manoeuvring, and its timing caught most in the industry by surprise.

"Nobody thought they would press the button as quickly as they did," Party Gaming chief executive Mitch Garber said. Lawyers advising the industry say there is "wriggle room" in the act. US law gives the US Treasury and Federal Reserve 270 days to establish a set of procedural guidelines to enable financial institutions to monitor and block gambling- related transactions. That is a difficult task, said Hilary Stewart-Jones, a partner at law firm Berwin Leighton Paisner.

Very complex systems must be put in place and the act did not specify what would happen if the Treasury and the Federal Reserve failed to come up with a satisfactory arrangement by the deadline, she said. Law firm Olswang was more positive, telling clients in a note that the act "does not extend the illegality of internet gambling in America". "Anything that was illegal previously remains so, albeit with additional penalties. "Anything that was legal remains legal without penalty. The industry is aware of the risks and companies are able to continue to run these risks should they choose to," the note says.

Some companies may be inclined to take a risk, but pragmatism will dictate that it will be almost impossible for gaming companies to operate in the US if the banks are no longer willing to handle bets. All operators accept that US citizens with an urge to gamble are unlikely to want to give up doing so. "The danger is that the business will probably go underground," 888 Holdings chief executive John Anderson says. Some will shed few tears for the possible death of an industry that has generated great wealth for a few entrepreneurs. In the past few months, Party Gaming founders and directors have taken more than £ 1.2 billion out of the business and 888 founders made £ 138 million on flotation.

The expectation among industry bosses is that online operators will have to merge. "Consolidation is, in my view, the most sensible way to grow the business right now," Mr Garber said. Although the effect of the new legal landscape is far from clear, operators are trying to blunt the effect of the changes. Empire Online is being talked of as a tempting target, not least because of the $US250 million ($336.5 million) cash it has in the bank, the result of a legal settlement after a dispute with Party Gaming.

Last week, London online gaming company UKbetting became the first quoted company in the sector to admit to takeover approaches. The biggest players are likely to cut costs before trying to enter new markets, particularly in Europe and Asia. That won't be easy because there were cultural issues in Asia, Mr McIver said. Most are trying to put on a brave face.

"We'll go hell for leather to get the business back in the rest of the world," Mr Anderson said. Mr Garber said non-US markets had been growing fast, with 50 per cent of new sign-ups from the US. Mr McIver also remained optimistic that Sportingbet would pull through. "We have a viable business, albeit a dramatically reduced one," he said. Smaller operators may disappear, but the bigger players feel the law simply turns the clock back five years. Sunday Times

Über Glücksspielrecht Newsübersicht:

Casinos.ch ist die Gaming & Entertainment-Plattform der Schweiz und mit über 20 Informationsportalen und rund 100 Internetnamen (Domains) das grosse News- und Pressenetzwerk der Casino- und Glücksspielszene in Europa.

Aktuelle News, Interviews, Fotos und spannende Stories - direkt und live aus den Schweizer Casinos, der Spielbankenszene Deutschlands, über das monegassische Casino von Monte Carlo, weitere Casinos aus ganz Europa und der ganzen Welt finden Sie auf www.casinos.ch. Und last but not least natürlich auch aus der Sin City 'Las Vegas'.

Die Informationen sind unterteilt in die Bereiche Casino-Informationen, aktuelle News, Events, Jackpot und Tournament-Informationen, Fotogalerien, Live-Berichte und Interviews sowie ein täglich wechselndes Glückshoroskop.

Top-Brands: - www.casinos.ch CH-Casino-Plattform - www.swisspoker.ch Poker-News - www.casinopersonal.ch offene Stellen - www.nightlife.ch Ausgangs-Informationen

--- Ende Artikel / Pressemitteilung Busted flush for online gambling ---


Weitere Informationen und Links:

Weitere Nachrichten der Gaming-Branche