Following the unexpected passage of the Unlawful Internet Gambling Enforcement Act of 2006 in the US Congress, the word I-Gaming would seem to have taken on a whole new meaning: Illegal Gaming. Listed online gambling operators are seeing their shares plummet or cease trading, offshore licensing jurisdictions are considering legal action, and financial institutions are contemplating the unwelcome prospect of having to police the US online betting industry. All this comes at a time when the UK was in the process of further legitimising the online betting industry by licensing it under the Gambling Act 2005.

After initial moves by the US judiciary to arrest online gaming company executives, France jumped on the bandwagon in a bid to protect its own state gambling monopoly, and other similarly-minded countries are likely to follow. The US administration continues its vendetta against online gambling despite accusations of protectionism. Apparently online gambling is only a danger to health and public morals when the proceeds fall outside the US: the right of gamblers to bet online within the country on racing and state lotteries is protected under the new bill. The US, already defaulting on a WTO ruling, has emphasised its disregard, or contempt, for international treaties that fail to support its wishes.

The loss of US Internet customers will be a big blow for the online industry but it may not signify a terminal illness. The US gamblers, with the earliest availability of home computers and fast Internet access, adopted online gambling activity in their millions and were the first market to push the good online operators into becoming publicly listed companies. Other regions of the world are fast catching up and the online gambling market is widening even as the US market is forced to shrink, and as yet no one knows how successful the US government will be in stopping its citizens from betting online.

It was Mark Twain who wrote: “This report of my death was an exaggeration.” Those happily predicting the imminent death of the online gambling industry may also be exaggerating. With proper regulation the industry could adapt, survive and thrive, ultimately even in the US. The bell may toll, but the funeral has yet to be arranged – the tolling could signify that other meaning of the word: raising a tax. (E-10.10.06)

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