INDUSTRY NEWS: Full coverage of the month’s big stories

AGA changes heart over egaming

The threat of prohibitive legislation in the US receded further in April as the American Gaming  Association (AGA) shifted its position on internet poker gambng

     Frank Fahrenkopf, aGA chief executive, said that following a board meeting the AGA “now strongly support the creation of a one-year Congressional study commission that would evaluate the impact of online gambling. ” The AGA statement acknowledged millions of Americans gamble online and noted countries such as the UK are in the process of regulating and taxing egaming.

      The statement added: “A study commission should take into account policy issues ranging from how best to protect children and problem gamblers to whether internet   gambling can be effectively legalized and regulated in the US, rather than leaving bettors to fend for themselves on illegal offshore sites. ”
      It added such a study should include considerations of recent World Trade Organization (WTO) rulings indicating the US ’ position on egaming may be in violation of international trade obligations.
      The industry welcomed the news. David Carruthers, chief executive of BetonSports, said: “I am delighted to learn about the AGA’s new approach to regulating egaming in the US. The AGA recognizes that efforts to ban egaming in the US would be futile. ”

      Egaming is the subject of two prohibitive bills from Representative Bob Goodlatte and Jim Leach, which are in committee stages. Both will be the subject of judiciary committee ‘mark-ups ’ in the next few weeks, which could recommend either or both to the floor of Congress.
      An industry source suggested the next month would be “quite noisy ” for the sector. “It is possible the Goodlatte or Leach bills might pass through the Lower House. But the Senate is where it happens, and where the AGA is powerful. ”
      John O’Reilly, managing director of remote betting at Ladbrokes, said:  “The AGA development is interesting, but there is much effort by Goodlatte and Leach to get prohibitive legislation on to the statute books. The chances are probably long odds against, but there will be some interesting development on this prior to the US elections. ”

Goodlatte bill meets committee opposition

A fortnight before the American Gaming Association statement about egaming was released, the sector received a boost after the latest attempts to strengthen the prohibition of egaming hit significant opposition in the US legislature.
      Representative Bob Goodlatte’s Internet Gambling Prohibition Act (HR 4777) was said to have met a lack of support when it came before the House Judiciary crime sub-committee on 5 April.
      House representative Bobby Scott slammed the bill as attempting to create “an enforcement nightmare for financial institutions ”.
      His comments were backed by Sam Vallandingham, Vice-president of First State Bank, who said the added burden of having to monitor transactions for egaming would be too much for the banking industry.
      The sub-committee session also highlighted the confusion among the bill’s proponents over possible carve-outs for activities such as online wagering on US horse racing.

      In testimony to the committee, Vallandingham said the intended legislation would “drain finite resources currently engaged in complying with anti-terrorism, anti-money laundering regulations and the daily operation of our bank to meet the financial needs of our customers and community. ” He doubled whether the bills before the House would “efficiently and effectively ” target internet gambling.
     “This legislation, if passed, would not only necessitate a massive overhaul of our nation’s cheque-clearing and ACH systems, but also create an enormous regulatory burden requiring the deputisation of financial institutions to identify and block illegal transaction. ”
      The legislation would make it “difficult for (banks) to fulfill our central mission of financing and supporting our local communities. ”
      Bruce Ohr, chief of the organized crime and racketeering  section at the US Department of Justice (DoJ), said while the DoJ commended backers of the bill, it had concerns sections of the proposed legislation would weaken current law. He added the DoJ was concerned about the so-called ‘carve-outs ’.

Egaming Review Power 50 Summit

This year’s Power 50 Summit took place in April and once again proved to be a great success. The luxurious surroundings of Brocket Hall in Hertfordshire again played host to top executives from the most powerful companies in egaming for two day of high-level discussion.

      Kicking off the Summit on the monday was a well-received opening panel  session with Nigel Payne and John Anderson from Sportingbet and 888.
      The session kicked off two days of intensive panels and debates, while following a formal dinner on the monday night, the second Power  50 Summit poker tournament took place, won by Leisure and Gaming’s Alistair Assheton.
      Reaction to the event was extremely positive and egaming Review would like to thank all the guests and sponsors for making the event so memorable.
      *  See the Power 50 Summit supplement with this issue.

State monopolies in question

The European Commission is to inquire into restriction set by national operators on the supply of sports-betting services in seven member states. The European Union (EU) member states in question – Denmark, Finland, Germany , Hungry, Italy, the Netherlands and Sweden – have two months in which to respond.

      The Commission’s inquiry follows repeated complaints by private operators that the state operators ’ moves to prevent them operating across the EU breach European rulings on the free movement of trade and services. The inquiry will only look into the provision of sports-betting services and will not include lotteries, poker or casinos.
      Charlie mcCreevy, internal market and services commissioner, said: “The Commission has received a number of complaints from operators in the area of sports betting, and feels obliged to respond. In sending these letters, we are not seeking to liberalise the market in any way. Rather, we are seeking reassurance that whatever measures member states have in place are fully compatible with existing EU law, or have been brought fully into line. ”

      The complaints centre on restrictions for the provision of sports-betting services, including the requirements of a state license even if an operator has one from another EU state.
      Petter Nylander, chief executive of European –focused  sportsbook Unibet, said: “We view this development as positive as it is clear several member states are using their monopolies to their economic advantage.
     “Numerous private  operators can provide reliable and transparent products and some member states, such as the UK, have shown a deregulated market can work well for both society and business. ”
      Nylander said the Commission’s carefully worded statement was understandable as “this is a highly sensitive matter and there is a strong lobby from the monopolies. And politically they also represent strong revenue streams. ”
      He said the inquiry’s announcement was “ a good climate  indicator that the days of the mono0polics are being counted. ”