The United Kingdom is no stranger among First World countries to against-the-grain online gambling policy, but anyone who believed that England’s new liberalized gambling policies would expose the U.K. market to the gamut of
i-gaming operators was set straight last summer by the country’s Department for Culture Media and Sport.
The full enactment of the 2005 Gambling Act in September 2007 legalized online gambling services (casinos, poker, etc.) that were previously not allowed to operate in the U.K. In the spirit of fair international trade, England has elected not to ban foreign businesses from providing their
services to U.K. residents, but fairness has its boundaries.
In August 2007, the DCMS announced that the government would be cracking down on advertisers of i-gaming services based in locations that “don’t meet the U.K.’s strict regulatory standards.” The ban went into effect with the full adoption of the act and, according to the DCMS, applies to well over 1,000 sites.
This is because the “white list” applies almost exclusively to jurisdictions within the European Economic Area. The few exceptions are Alderney, the Isle of Man and Tasmania, which successfully applied for exemption from the ban. Antigua, Costa Rica, Kahnawake and Curacao—western locales that the DCMS estimates to host a combined 1,700-plus sites—have been shut out.
The advertising rules should have an interesting effect on the industry. More than anything, they will widen the divide between two increasingly distinct industry factions. It is the Americas vs. Europe, the elusive vs. the transparent, the old school vs. the new direction. The formers inherited the North American market with the passage off the U.S. prohibition in ’06, and the latters are staking a claim to the U.K. market thanks to the new rules.
The policy also will affect competition among i-gaming jurisdictions (although before drawing the lines in ink, it should be noted that a handful of jurisdictions have made appeals to join the white list). Alderney, the Isle of Man and EEA member Malta have become much more attractive choices, and the next six months or so will reveal the extent of the inevitable exodus.
The most notable jumper to date is perhaps Totesport Casino, the online operation of the British Tote betting agency, which announced in December that it was moving from Curacao to Alderney specifically because Alderney is a white-list jurisdiction. William Hill and Betfred—also U.K.-based operators with offshore i-gaming services based in the Netherlands Antilles—are both said to be considering similar moves.
As already mentioned, operators based in Caribbean and Central American jurisdictions have much less competition in the prohibition-era U.S. market, but U.S.-facing services are now officially illegal and the ban on payments for i-gaming has made it difficult for U.S. bettors to set up accounts.
The U.S. market is clearly not the revenue generator it once was. Antigua made this point in its appeal to the WTO, claiming that U.S. restrictions have slowed the island nation’s economic growth by more than $30 million. Remote gambling revenue there has dropped from over $2 billion in 2001 to under $1 billion in 2007, and the country’s workforce in the field of online gambling has shrunk from an estimated 3,000 in 1999 to 333 in 2007.
It’s easy to understand, then, why Antigua is aggressively seeking white-list status in England. After having its initial appeal rejected, representatives from the Antiguan government have been in talks with U.K. officials, and Antigua’s finance minister, Errol Cort, has expressed confidence in their chances of attaining approval. The Netherlands Antilles, meanwhile, has made changes to its i-gaming regulations in hopes of getting on the approved list as well.
The Alexander First Nation and Kahnawake territories in Canada have also been denied, and they are concerned about the perception of the western i-gaming jurisdictions. “From what we understand a lot of the decision (to deny approval) was based on information they gleaned from Quebec media reports, that there are jurisdictional issues going on, which has been going on for years in the media,” Kahnawake Political Press Attaché Joe Delaronde told IGamingNews.com. “We just want to make sure that our case is based on merit and not media reports.”
Other competitive i-gaming jurisdictions, like Costa Rica and the Cagayan free-trade territory in the Philippines, have opted not to seek white-list status.
For the betting consumer, not much will change. American bettors will still struggle to find efficient means of moving money to and from gambling sites. Chinese consumers will continue to be at risk of serious punishment from the government if they are caught gambling online. Europeans will still have limited exposure to betting services that are not offered by government monopolies. And in the United Kingdom, you’ll still be able to walk into a tube station and see posters advertising internet gambling services, although the variety will be diminished.
Mark Balestra is the director of publishing for Clarion Gaming. A veteran of 11 years in the online gambling business, Balestra is the editor and co-creator of Interactive Gaming News (www.iGamingNews.com) as well as the editor and co-author of Internet Gambling Report, a legal guide to interactive gambling.