How To Get Online Gambling Legal In The United States

Transcription

1 Is legalized online gambling in North America inevitable? An Australian perspective Sally Gainsbury (nee Monaghan) April 14 th, 2010 Discovery Conference Toronto, Ontario

2 Current Internet gambling: 2,258 online sites Casinos Poker Sports & racebooks Bingo Lotteries Skill games Other 1,975 English-language sites accept play from Australia; 1,879 from Canada; 953 from the United States

3 Major jurisdictions 69 jurisdictions offer online gambling Major providers are: Malta 342 Netherlands Antilles 289 Kahnawake 230 United Kingdom -96 United States 35 Australia 22 Canada - 4

4 Internet gambling: Global market share ~ $15-20 billion in 2008, with sports/race books, casinos and poker accounting for large majority ~ 4-5% of worldwide gambling market Patronage uncertain: North America (30-35%), Asia (11-49%), Europe (23-44%) U.S., China, U.K. largest single markets within these continents

5 Revenue

6 Prevalence of online gambling 0% to 11% depending on the country 10.5% U.K - legal 6.5% Norway - legal 4% U.S. - prohibited % Canada ~ 1-4% Australia (2006/2007) 1.3% New Zealand 1% Singapore (Some results are outdated and not from national surveys) Annual growth rates ~ 10-20%

7 Regulatory options Prohibition U.S., China, Russia, Bermuda, Pakistan, Saudi Arabia, Cambodia, Portugal Licensing, Regulation, & Taxation All forms: U.K., Gibraltar, Antigua, Malta, Alderney Some forms: Sweden, Finland, Germany, Hong Kong, Liechtenstein, New Zealand, France, Australia Ownership Sweden, Philippines, Canada

8 Legality Only legal for residents Finland, Austria, Norway, Sweden, Canada Only legal for residents and residents cannot gamble online outside the country Netherlands, Czech Republic, France, Germany, Hong Kong, Hungary, Italy, Norway, Slovakia, Sweden Only legal for non-residents Australia

9 International example: Australia Initial forerunner in Internet gambling regulation Interactive Gambling Act (2001) Federal policy with State independence Online, mobile and tv sports betting legal State competition and discord

10 Australia Productivity Commission Draft Report (2009) Online gambling US$670 million/year Consumers forced to use offshore sites Domestic operators unable to compete Potential tax revenue lost Managed liberalisation of online gambling?

11 Internet Gambling in Comparative Perspective: The Canadian Context Discovery Conference 2010 Robert Wood, PhD Department of Sociology University of Lethbridge April 14th, 2010

12 Legality in USA Most forms of inter-state online gambling prohibited under the terms of the Federal Wire Act Internet Gambling Prohibition and Enforcement Act allows for the legalization of intra-state Internet gambling. This new legislation targets financial transaction providers which transfer funds between bettors and offshore Internet gambling websites.

13 Legality in USA Many offshore Internet gambling websites refusing bets from Americans. Software is being designed to systematically exclude American residents.

14 Legality in USA 1. Internet gambling will emerge around intra-state initiatives. 2. Intra-state legality will vary on a state to state basis. 3. Inter-state prohibitions will remain in effect. 4. US-based players may begin to make greater use of off-shore financial transaction intermediaries

15 Legality of Canadian Based Internet Gambling The Canadian criminal code includes sections which regulate and prohibit gambling activity in Canada. The law, however, is focused far more on the act of providing gambling services than it is on the act of gambling itself.

16 Legality of Canadian Based Internet Gambling In particular, Part VII of the criminal code, on Disorderly Houses, Gaming and Betting, allows for a number of legal scenarios. One of these allows for governments of a province alone or in conjunction with other provinces to conduct and manage a lottery scheme. Thus, in Canada, Internet gambling venues can only be legally regulated and operated by provincial governments.

17 Canadians and Offshore Sites This leaves unanswered a very important question: Is it legal for resident Canadians to places bets at offshore Internet gambling websites? Some claim that the answer to this question is somewhat of a legal grey area.

18 Canadians and Offshore Sites Nullum crimen sine lege, nulla poena sine lege no crime without a law, no punishment without a law. Unless the criminal code of Canada includes a law which necessarily prohibits a given activity, that activity is not illegal (even though it may seem as though it should be illegal). Some use this principle, along with the lack of specific legislation, to argue that gambling at an offshore Internet gambling website is not illegal.

19 Canadians and Offshore Sites However, the criminal code of Canada does render it illegal to be found in a common betting house. So, if offshore Internet gambling websites were properly defined as common betting houses, then it would be illegal to place bets at such virtual establishments.

20 BC Lottery Corporation BC Lottery Corporation operates the playnow.com website. Provides access to a wide range of Internetbased gambling opportunities, including bingo, keno, lottery ticket sales, and a version of poker. Players can fund purchases through a new Interac Online feature.

21 Atlantic Lottery Corporation The Atlantic Lottery Corporation offers online gambling opportunities, for Atlantic province residents. These opportunities are accessed via the playsphere.com website, and lottery ticket sales, bingo, and themed interactive games such as mini-golf. The games are offered as a means to take a few minutes to relax and play some of those familiar online favorites. Each game costs $3.

22 Loto-Quebec recently announced that it would be expanding operations to offer online poker and sports betting websites by September of Loto Quebec Loto-Quebec has made initial forays into Internet gambling with the Loto Clic initiative. Gamers buy a scratch ticket at a Quebec retailer. Scratching the ticket reveals an access code, which gamers can use online to access Internet based versions of games such as Bingo, Hangman, or 21.

23 Horse Race Betting Horse race betting in Canada is regulated by the Canadian Pari-Mutuel Agency under the authority of the Agriculture and Agri-Food Canada. In 2003, rules were changed such that horse racing bets could be placed by not only telephone, but by any telecommunication device. Thus, online horse race betting was effectively legalized in Woodbine Entertainment now offers Internet-based horse race betting in Ontario.

24 Aboriginal Nations Certain aboriginal nations in Canada maintain that they are sovereign nations, capable of legitimately creating their own legislation with respect to gambling. The Kahnawake nation, in Quebec, has been hosting Internet gambling websites since 1999, and is currently one of the world s largest online gambling hosts, from a numerical perspective.

25 Aboriginal Nations The Quebec government continues to maintain that these websites are illegal, and also of dubious security (offering the impending Loto-Quebec initiatives as a safe alternative) There have been no prosecutions thus far.

26 Future in Canada 1. Prevalence may increase slightly, but is likely to remain relatively low. 2. Potential for profits remains uncertain. 3. Unclear to what extent heavily regulated provincial websites can compete with easily accessible offshore websites. 4. Prohibition of offshore Internet gambling only feasible by criminalizing transfer of funds. 5. Governments will struggle to legitimize expansion, in light of growing body of literature about link between Internet gambling and problem gambling.

27 Is legalised online gambling in North America inevitable? A contextual analysis

28 Advantages of legalisation & regulation Well-defined laws and legal bodies to enforce them Domestic operators can compete Tax revenues Consumer protection and corporation probity

29 Disadvantages of legalisation & regulation Increased access likely to increase participation Internet gambling has been linked to increases in problem gambling Marketing may encourage participation from atrisk groups Fewer safeguards Competition with existing gambling-related businesses

30 Market drivers & barriers Regulation Taxation Consumer demand

31 Future trends Strong revenue growth Increasing popularity and participation Greater jurisdictional legalisation & regulation Responsible gambling features incorporated Increase use of mobile gambling Prevalence of problem gambling will increase Increase in online problem gambling treatment Governments will recognise the risks, benefits and impacts of Internet gambling and take appropriate action

32 Conclusions Very dynamic environment Research is key in understanding risks and benefits for society Internet gambling is a reality and must be responded to appropriately

33 Thank you Questions, comments? Sally Gainsbury (nee Monaghan) Centre for Gambling Education & Research Southern Cross University Lismore, Australia Robert Wood, PhD. Department of Sociology University of Lethbridge Lethbridge, AB, Canada