Gambling News - October 2006 Edition

U.S. Persists in its Policy of Banning Online Casinos

Commenting on the latest anti-online gambling legislation passed by the U.S. Congress, Britain's culture secretary, Tessa Jowell, compared the United States crackdown on online gambling to its 1920's failed prohibition on alcohol.  Jowell suggested that the U.S. policy of banning online casinos would eventually turn unregulated offshore online casinos into a "modern equivalent of speakeasies", illegal bars that popped up throughout the U.S. during the 1920s-era prohibition on alcohol.

The new legislation passed through Congress after U.S. majority leader Bill Frist managed to get it attached to an unrelated Homeland Security bill for increasing U.S. port security.  While the bill, signed into law by President Bush on October 14th, doesn't actually criminalize online gambling, it does make it illegal for U.S. residents to use U.S. financial institutions for making deposits and withdrawals at online casinos.  The law has effectively cut off the most lucrative part of the online gambling market -- a market that is worth $15.5 billion this year in "spend" value (the amount online casinos win from their clients) and caused several European, Australian, and London-based online gambling companies to shutdown or sell off their U.S. operations.

According to Jowell, the U.S. decision to prohibit U.S. residents from playing at online casinos will force online gamblers, who want to continue playing, to visit unregulated and possibly unscrupulous online casinos or poker sites that take advantage of players.  If online gambling is regulated, the approach that Britain is taking, incidences of unfair play and unethical practices by online casinos can be prevented.

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