Traditionally the United States Federal Government has allowed each state to make their own gambling laws, but not in the case of Internet gambling. Although there are no federal laws that deal with gambling, apart from the Wire Act that refers to telephone sports betting, the US is attempting to impose a blanket ban on its citizens playing online. Other countries, such as Britain, have decided to regulate the booming industry with almost an ‘if you can’t beat them, join them’ attitude.

There are now so many reputable jurisdictions that offer online gaming companies both a well-regulated environment and favourable tax regimes that Internet gamblers are confident of fair play when they make their bets. The UK has yet to start licensing online operators, and there is some speculation that the hoped-for revenues from regulating the business may have been over calculated. Many successful online companies seem to be happy with their present arrangements with jurisdictions such as Gibraltar, Antigua, the Isle of Man, Alderney or Malta.

The Internet takes no account of political boundaries but governments worldwide attempt to legislate to control its use. Norway, like the US, seeks to prevent its citizens from gambling at offshore online casinos. European Union economic agreements somewhat complicate the issue, with member states divided on the subject and, as yet, no coherent EU policy. The majority of the Norwegian Parliament is in favour of passing the new bill, but its critics point out the difficulty of enforcing an online gambling ban.

Moves by the United States to ban advertising and to block credit cards being used for online gambling transactions have had some success. Attempts by the courts to pass a gambling bill have been less so, but one sponsored by the Arizona senator Jon Kyl to be introduced next session may get more support. The powerful American Gaming Association would not continue to oppose the bill if it removes the exceptions for horseracing and tribal casinos previously incorporated.

Ultimately the crux of the matter must come down to economics. How much money, manpower and resources is needed to enforce a ban on an online industry? Whilst it would be money counted well spent in the case of child pornography, many would consider it money wasted for online gambling. The numbers of Americans who play online, despite their government stating it illegal, is increasing. They contribute the major part of online operators’ revenues, and the well-established companies are being accepted for stock exchange listings.

Revenues are estimated to reach $22.7 billion by 2009 and, so far, Internet wagering only accounts for under 4% of gross win gambling worldwide. The biggest listed gambling company, Sportingbet, considers that it only holds around 3.5% of the online market but that within five years online gambling will be bigger than the land-based casinos.

More socially acceptable as a leisure activity than ever before, gambling at a casino, betting shop, bingo hall, racetrack or at home on the Internet is a popular pastime. Wise governments should seek to regulate the activity for the protection of the gambling public, and to benefit from the revenues, rather than battle against the odds and their own citizens. (E-06.13.05)

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