3 9 September 2004

News:

PayPal, the online payment service has announced plans to fine those who breach its terms and conditions, in particular, those who seek to process online gambing transactions. From 24 September, sellers who use PayPal to process online gambling transactions will face fines of up to $500 for each violation. Should PayPal’s losses exceed this level, PayPal will also seek to recover these additional monies through the courts.

Costa Rican-based sports book BETonSPORTS has launched a US advertising campaign which challenges the US prohibition on internet gambling. The multi-media campaign argues that the Department of Justice’s stance is contrary to US citizens’ rights to free speech. In the television advertisement, the first of which screened in September, an actor waves the American flag while a voiceover applauds the freedoms and rights of US citizens, but goes on to declare that the freedom to bet on the internet, which is currently prohibited by the authorities, is a constitutional right. Viewers are directed to BETonSPORTS’ petition which, says the voiceover, can be located at the website www.BetOnSports.com/petition - with the URL then flashed up on the screen. No mention is made of BETonSPORTS’ business.

The European Commission underlined their growing interest in reforming the EU gambling market with its recent initiative, in the form of a tender document, to investigate the industry. According to the Commisson’s Tender document, published on 27 July 2004, the purpose of the study is to “evaluate how the differing laws regulating on-line and off-line gambling services as well as games in the editorial content of the media and certain types of promotional games impact upon the smooth functioning of the Internal Market for these and associated (e.g. media, sports, charity, tourism) services and thus could restrict the economic and employment growth associated with such services”.

Features:

In the US, Congressman Oxley pushes to tie online gaming to money laundering and terrorism. In the UK, a more enlightened approach includes a study which raises concern about minors’ access to gaming websites.

Most areas of UK gambling law are heavily regulated - with the organisers requiring some form of permit, probity check, and supervision by regulatory authorities. However, one major growth area in gambling entertainment currently operates with little or no such regulation - indeed its very legal status is far from clear. Commercially run free prize draws or skill competitions are currently springing up on television, SMS and internet, mostly through premium rate telephone lines. This article discusses the legal position and asks whether the Gambling Bill will restrict or further liberate this growth area of the industry.

The internet allows for seamless global communications and transactions but national laws do not. Transactions that in one country are perfectly legal in another can lead to a prison sentence. In this world, knowing where your customer is located is a matter of significant importance. This article looks at how the problems of geolocation can be addressed.

While much of the attention has been on the UK Draft Gambling Bill, the incoming Cyprus regulations and small jurisdictions, it is easy to forget that 80% of legislation in any EU country comes from Brussels. The gambling industry has rarely had to be concerned as gambling has always been outside the scope of the EU competencies, but recent events make it certain that gambling will slowly appear on the radar of EU officials.

Probity checks are an essential feature of the gambling business world. This article argues that it is essential to use specialists to conduct probity checks effectively.

The Australian Government recently released its report (Report) which reviewed the issues related to Commonwealth interactive gambling legislation, the Interactive Gambling Act 2001 (IGA). This article examines the report.