Online gambling: To be or Not to be?

published on Ecommerce Journal

The battle around the online gambling becomes extremely hot and resembles a kind of war in the frame of laws and political issue. Many people think that the first country that has gone on the war-path was the USA. However, according to some sources it was the Australian Government that passed the Interactive Gambling Act (IGA) on June 28, 2001. The story of the American ban goes back to 2002. That year in November the United States Court of Appeals for the Fifth Circuit ruled that the Federal Wire Act prohibits electronic transmission of information for sports betting across telecommunications lines but affirmed a lower court ruling that the Wire Act „‚in plain language‘ does not prohibit Internet gambling on a game of chance.“

“Ah, it’s their problems!” some people said. However, it appeared that not only their. In June of 2003 the Caribbean island nation of Antigua and Barbuda made a complaint to the World Trade Organization. Antigua and Barbuda as well as the other Caribbean countries profited mainly from the offshore business, tourism and the entertainment industries. The law forbidding the American to gamble online has immediately affected on the profits from the gaming industry since the residents of the United States were the half of the whole visitors of such sites. In 2005 Antigua and Barbuda has won the preliminary ruling and the WTO stated that the US should reverse the ban of the online gambling for the casinos registered in the offshore areas. But since the ban has not been lifted on June 19, 2007 Antigua has filed a claim with the WTO for USD $3.4 billion in trade sanctions against the United States, along with a request for authorization to ignore U.S. patent and copyright laws. Finally the court stated that as a compensation Antigua and Barbuda will get $21 million though not in money but with the rights for music and movie. Now Caribbean country has a right to make copies of American CDs and DVDs without fear to breach copyright.

Not only Caribbean countries issued the sanctions. The other countries where the online gambling played an important role have demanded for compensation amounted at $100m. In December of 2007 the US have offered the EC to provide the other sector of the economy as compensation. The similar promises were given to Canada and Japan. However later it was decided to pay in cash.

This year the European Commission started a formal probe into US gambling ban. It has sent a list of questions to US officials aimed at finding out if the US policy is discriminatory against European firms or no. The results of the investigation can become the ground for the future suit. The results will be published in November. Nobody doubts that the suit will be filed to WTO however the investigation may take years and the profits will be lost.

„We conducted negotiations with the EU which resulted in a mutually acceptable agreement last December to facilitate the U.S. amending its (services) schedule to clarify that we do not have WTO obligations with respect to gambling,“ commented Gretchen Hamel, a spokeswoman for the US Trade Representative’s office.

Despite the desire of the US government to restrict and to ban the online gambling it can do nothing with the people’s desire to play. Even the removing of the online gambling ads from the sites of such giants as Google and Yahoo! in 2004 didn’t save the situation. People constantly were searching for the ways to play.

The USA is a serious country and it doesn’t like the jokes with itself. To demonstrate the seriousness of its intention to remove the online gambling from the country the US government needed a victim. Accidentally such victim became a known payment processor NETELLER which specialized in processing of the online casinos. The two officers of Neteller were arrested. With the arrest they killed two birds with one stone: demonstration of the power, and death of the system. Fortunately NETELLER have collected itself and started a new life. This time the system decided to change its policy and break with the online gambling. Actually people started trusting Neteller again and new and new customers appeared. However the admins of the project have considered that the name of the system is associated with something dirty and illegal, so they decided to change the name to Neovia Financial. Will the NEOvia bring a new life to Neteller the time shows but at the moment the previous success of the company is just in thoughts.

Such known companies as ePassporte, Citadel had to refuse to process the payments to the US residents to avoid the same fate. The latter one even had paid a $9.1 million fine to stop the prosecution of the government.

The aggressiveness of the USA against online gambling is very surprising especially since the population of the US doesn’t want this ban as whole. Many people among famous actors, statesmen, singers and others are against and urge to lift the ban. So, the famous actor and a successful governor Arnold Schwarzenegger deprecated this law. May be the new president of the US will clarify the situation. When asked about their attitude towards the online gambling the candidate for election Mr. McCain said that he will continue this course and do his best to ban everything. Another candidate, Mr. Obama was not as severe as Mr. McCain and he said that he will give a chance for the online gamblers.

Being against the restrictions of the US the European Union forgot about some countries belonging to the European Market zone which want to ban the gambling as well. The countries are Norway are Germany. Each law project of each country is hotly discussed on the meetings of the EU.

Despite the protests of the EU Germany has launched its ban of the online gambling starting from January 1, 2008. The ban “breaches EU law because it excludes foreign betting companies with EU licenses from the German market,” commented Dr. Wulf Hambach, of Hambach and Hambach, a litigation firm preparing to challenge the ban. The end of this year is coming however the ban has not been reversed.

Norway has proposed to issue such law last November. At the moment no information is available and the famous question: “To be or not to be” is still relevant.

Russia has also declared war to the online casinos in 2006. And not only the online casinos but the real ones as well. It was declared that there will be the separated area for the gambling.

Usually the punishment is various fines depending on the guilt. However the Latin country, Argentina went has and have stated that it will even jail those who violated the rules.

There are lots of other countries that are preparing such kind of law. However, it is still not clear why people want to ban the online gambling industry. Why not to use the passion of the people and the money flows for your own benefit? If the US have legalized the online casinos instead of the ban, it would be in a more profitable situation. The casinos would pay taxes and everything would be ok.

Unfortunately very little people want to admit this fact and continue their policy. So, we will see the final decision when time comes. Any forecasts here are senseless… So, let’s wait until November, may be the situation will change.

For further informations please see the website of Ecommerce Journal