INTERNET GAMING MRS. AMINA MAKNOON DIRECTOR OF LEGAL SERVICES BETTING GAMING AND LOTTERIES COMMISSION
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1 INTERNET GAMING MRS. AMINA MAKNOON DIRECTOR OF LEGAL SERVICES BETTING GAMING AND LOTTERIES COMMISSION
2 What is Internet Gaming? The term internet gaming is often used interchangeably with internet or online gambling and refers to all forms of gambling (including wagering) via the Internet, including gambling using computers, mobiles or wireless devices connected to the Internet. Interactive gambling is a slightly broader term, although again often used interchangeably with Internet gambling, and includes other forms of remote gambling generally conducted via digital means such as digital television. Gamblers typically upload funds to the online gambling Web sites via electronic payment services or wire transfers, play games either with each other (poker, sports betting) or against the house (blackjack, roulette), and withdraw any winnings by check or online payment service.
3 GLOBAL STATISTICS the online gaming market represents one of the fastest growing segments of the gambling industry Despite the political and legislative restrictions, in 2009 the market already produced more than US$20 billion in worldwide revenue and is projected to grow to over US$40 billion by Sources: KPMG International, Online Gaming A Gamble or a Sure Bet? 2010 H2 Gambling Capital, egaming report, July 2009 Statista 2014
4 Internet Gaming To be or not to be?
5 Factors Contributing to the Expansion The legalisation of internet gambling in several countries worldwide eg: the UK; The inherent and increasingly apparent difficulties in its prohibition; The opening of new potentially lucrative markets in Asia; Further advances in technology and increasing accessibility of the internet; Increased confidence in online financial transactions; The economic crisis - governments of both developed and developing countries have started to consider the potential of internet gambling to bring in much needed revenue into their coffers.
6 Technology Intensive The Internet gambling industry now creates the greatest demand for technology such as software development and broadband access. Every advancement in technology invariably reflects itself in the Internet gambling environment. The high resolution 3D graphics, text messaging and chat features, realistic depictions of natural and man made features, are very important for the realistic look and feel of virtual casinos, card games and horse races. Source: I. Nelson Rose and Martin D. Owens Jr., Internet Gaming Law, at page 103
7 Types of Internet Gambling Internet Gambling includes a number of different types of games, each with its own business models and technology online bingo online lottery sports betting online poker online casino games including slot machines and traditional casino games
8 Policy Considerations Problem gambling; Protection of minors; Anti-money laundering; Cybercrime and cybersecurity; Jurisdictional and taxation issues
9 Problem Gambling The convenience and accessibility of internet gambling as well as the detached nature of the internet may leave gamblers with no tangible representation of the amount of money they are gambling. The evidence does not support the speculation that Internet gambling has an inherent propensity to encourage excessive gambling among a large proportion of players. However, it is widely accepted that, whilst the increase in gambling opportunities may not create more pathological gamblers, it does exacerbate pre-existing pathological issues. Technology, provides operators with more sophisticated methods to track individual transactions therefore allows for studies of players real behaviour and the effective monitoring and control of problem gambling
10 Protection of Minors Age Verification Software Additional level of verification by financial institutions Controls on marketing and broadcasting of internet gaming
11 Anti-Money Laundering The realities of Internet technology make it highly unlikely that Internet gambling sites increase the risks of large scale money laundering Layering and integration is extremely challenging in an environment where records of wagers, bets, results and payouts must be kept for business purposes or compliance with regulations in those jurisdictions where Internet gambling is licensed Collusion between player and operator
12 Cybercrime and Cybersecurity Operator The house can manipulate its internet gambling software to change the odds associated with the game. Player The online gambler can commit cybercrime in the internet gambling world in two main ways: either by manipulating the odds in the player s favour or by targeting the assets of the online venue itself by stealing the credit card information of its customers
13 Jurisdictional Issues Locally licensed internet gambling operators offering their services to residents of other jurisdictions Overseas licensed internet gambling operators offering their services to local residents
14 Taxation How? Whom? What Rate? UK Model Taxation based on point of consumption 15% of gross profits
15 The Legal Framework in Jamaica BGL (Amendment) Act 2010 incorporated the following definitions: Electronic Electronic ticket Electronic betting and online betting Amended definition of lottery to include any electronic game, method or device
16 The Legal Framework in Jamaica However, apart from the sale of bets and lottery tickets over the Internet, the BGLA does not specifically sanction other forms of Internet gaming such as Internet poker, traditional casino type games or electronic gaming (slot) machines ( EGMs ).
17 Next Steps (1) Effective regulatory framework for Internet gambling in the limited form of online betting and online lottery sales Sample Requirements for Operators: Dedicated player accounts; Measures to promote responsible gambling by players Measures to protect minors Compliance with AML/ CFT requirements Compliance with technical standards Compliance with cybersecurity standards
18 Next Steps (2) Research and consultation process into other forms of internet gambling products, such as online bingo, poker, traditional casino games and EGMs to make policy recommendations to the Minister. BGLC and CGC integral to this process
19 PARTING THOUGHTS Prohibitionist stance on internet gaming is: Unworkable Anomalous Leaves players and vulnerable groups unprotected Loses a significant source of revenue
20 Internet Gaming To be continued
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