The Future of Internet Gambling
At the start of May 2011 politicians, regulators, and operators met to discuss the future of Internet gambling in the UK and further afield. The various panels and speakers generated some heated discussion about sports rights, the EU Green Paper on online gambling, and the ‘onshore’ and ‘offshore’ markets.
GBGC’s Chief Executive Warwick Bartlett was invited to speak at the meeting and parts of the presentation he made are published below:
The first thing to note is that gambling is not recession proof. It used to be in years gone by when supply was restricted or the business was illegal and underground. Since legalisation gambling has become a main stream leisure activity and is subject to the same economic conditions that we see where a business is competing for the discretionary spend of the consumer.
Online gambling is an efficient business model that offers the best value for the customer under the right tax regimes. UK online gamblers have never had better choice as to how to spend their money.
The UK online gambling industry has generally fared better in the recession than its land-based counterparts.
2009 was a difficult year for online gambling. The big spending VIP players disappeared for much of the year in the online casinos and sports books were hit by a poor run of results in football later in the year.
Sports betting was helped by the World Cup and online Bingo continued its rapid growth.
The UK is one of the major online gambling markets in Europe precisely because it is one of the few jurisdictions that recognises e-gaming licences issued by other jurisdictions and operators can advertise their services.
There has been concern from some sectors in the last 18 months over the decision by William Hill, Ladbrokes, and Betfair to move offshore to Gibraltar.
But the UK had the chance to become the true global centre of Internet gambling back in 2005 with the new Gambling Act. The government of the time failed to take the opportunity by imposing too high a tax rate.
The jobs, innovation, creativity, and associated tax revenues this would have generated would surely have been welcome in the UK’ current economic climate.
One only needs to look at the event in the United States in the last two weeks to see this.
The Unlawful Internet Gambling Enforcement Act (UIGEA) was introduced in October 2006. As a result most firms left the US market but the likes of PokerStars and Full Tilt – both sites popular with UK poker players too – decided to continue offering online poker.
PokerStars along with Full Tilt have now been indicted by the US Justice Department.
Antigua has a claim against the USA following a dispute at the World Trade Organisation over Internet gambling and UIGEA which the USA lost.
“I don’t think there’s another country in the world that puts people in jail for engaging in trade that’s lawful under international law,” he said. “It’ as if Antigua would put Americans in jail for selling pineapples.”