This is the thirteenth edition of our “Monthly Form Guide”. We trawl the web for the latest developments in online gambling, and pick out some of the most interesting articles, opinion and developments. At the federal level in the US there was not much progress during June, although Barney Frank’s bill is due a vote in the House Financial Services Committee in July, and Harrah’s has stepped up its lobbying efforts in Washington. The implementation of the UIGEA rules does not seem to have had a significant impact on the industry. At the state level in New Jersey legislators are considering a referendum on allowing sports and internet betting in the state. In California Senator Wright pulled his bill to legalise online poker from a committee vote, but intends to work on it to garner more support. In Europe, France issued licences and opened the sports-betting market up to strong demand in time for the World Cup, and poker has recently followed. There are also further signs of progress towards regulation in Germany and Greece.
Poker Traffic update:
Traffic was weak again in June, with most of the major operators showing month on month declines on H2 Gambling Capital European peak hours average ring game player data. PartyGaming’s traffic was down 13% on the May average, and Q2 has been down 18% on Q1, and for Pacific Poker the equivalent numbers are 10% and 14%. This weakness has also affected the US-facing operators, with PokerStars and Full Tilt down 8% and 3% respectively on the month, and 12% and 22% on the quarter.
Durrrr (Tom Dwan) won the biggest pot of the last 30 days from Ziigmund (Ilari Sahamies). The pot was worth $199k. Ziigmund also lost the second, third and fourth biggest pots of the month.
US Regulation and Prohibition
• A month after the implementation of UIGEA regulations there has been little impact on US facing online gambling sites. Online horse-racing operators, who were given an exemption from the UIGEA rules, have been more affected through over-blocking by credit card companies.
• A bill that would allow online poker in California was pulled from a committee vote. Senator Roderick Wright said the bill needed work to win more support. The legislation had been amended to reduce the state’s share of gross revenues from 20% to 10%, although operators would be able to offer more in order to make their licence bids more attractive. The duration of licences was also lengthened from 5 years to 20 years. Three groups representing California Indian nations opposed the proposals in their current form. Several card rooms also objected to the legislation.
• New Jersey is considering a referendum in the state to allow constitutional changes that would permit sports and internet betting.
• New Jersey’s Assembly gaming committee also released a bill that would allow exchange betting in the state.
• Atlantic City casino revenues fell 13% in 2009, in part due to competition from casinos in Pennsylvania. The declines are part of the reason for the push towards internet and sports betting in New Jersey.
• The New Hampshire Lottery will launch a website in July on which state residents can play slots, bingo and poker. Tickets must be purchased from retail locations in order to play.
• Harrah’s has hired another lobbyist as part of its efforts to see online gambling legalised at the federal level (scroll down). Disclosure records show the first spent $905k lobbying in the first quarter of this year.
• Virgin launched a US website where video game players can compete against each other for real money. The internet video game tournament business is legal in 11 states because video games are considered games of skill rather than chance.
• Bolaverde media group produced useful summaries of online gambling legislation in individual US states and at the federal level.
• England’s defeat to Germany in the World Cup removed the risk of a big payout for the British-focused bookmakers, but is likely to lead to reduced interest in the rest of the competition… Coral said that the industry had been spared a potential £50m payout… although William Hill said that they think the World Cup could be the first tournament to see $2 billion of turnover in British bookmaking history.
• French operator BetClic has broken all of its records in France since being licensed to operate in the country.
• Bwin, BetClic, Everest, FDJ and the PMU were amongst the first operators to be awarded licences to operate in France. The first operators offered sports betting in the country in time for the start of the World Cup.
• PokerStars has blocked French players from the pokerstars.com website ahead of the opening up of the regulated French market. PokerStars was amongst the second batch of companies to receive a licence for poker in France along with PartyGaming. Sports betting has been permitted since before the World Cup, and poker opened at the start of July.
• European countries agreed a common definition of online gambling, with only Malta objecting. The move could be the first step towards European collaboration in the area.
• Greece will ‘soon’ release a draft law on gamin machines and internet betting.
• Google is now allowing licensed UK gambling companies to run display advertising campaigns on Youtube. Ladbrokes was the first brand to run a campaign on the site.
• Olswang produced a useful summary of the progress of online gambling regulation throughout Europe.
News from around the world
• A New Zealand court ruled that poker tournaments are not gambling but a form of competition. It also ruled that .net websites are not promotions for gambling operators.
• The Australian government rejected recommendations of the Productivity Commission report to repeal the Interactive Gambling Act which prohibits offering poker and casino to Australian residents.
• Sponsorship deals between Full Tilt and PokerStars and two Australian rugby league teams were referred to the police. The sponsorship deals were for .net sites which do not allow play for money.
• The Chinese government launched a crackdown on online football gambling during the World Cup. The government had already arrested more than 3,600 suspects by the middle of June.
• South America could be the next region to drive growth in online gambling markets.
Online Gambling: Monthly Form Guide
This is the twelfth edition of our “Monthly Form Guide”. We trawl the web for the latest developments in online gambling, and pick out some of the most interesting articles, opinion and developments, with links to what we consider to be best articles (most of which do not make it to the mainstream press). At the federal level in the US the House Ways and Means Committee held a hearing into Rep Jim McDermott’s bill to regulate and tax online gambling. No vote was taken, but the tone of the questioning was broadly in favour of the bill, and in his testimony Barney Frank said that he expects the Financial Services Committee to vote on his own bill in July. In California Senator Rod Wright introduced a bill to regulate online poker within the state – the bill envisages granting three five-year contracts to California-based operators – and in New Jersey a Senate bill to allow online gambling was approved by the wagering and tourism committee. More action was taken against payment processors, and the deadline for banks to enforce UIGEA passed. In Europe, the ECJ judgments for the Ladbrokes and Betfair Dutch cases were broadly in line with the Advocate General’s opinions, Greece expects to regulate online gambling within a year, German sporting federations said they were in favour of legalization and in France the Constitutional Court said that the new online gambling laws were in line with the country’s constitution after a challenge to them by opposition politicians.
Poker Traffic update:
Traffic was weak again in May, with most of the operators showing month on month declines on H2 Gambling Capital European peak hours average ring game player data. PokerStars was broadly flat with May average peak players 1.4% ahead of April, while Full Tilt was down 10%. The non-US facing operators were flat or showed small declines after seasonal declines in April – PartyGaming was down 3.7% and 888’s Pacific Poker was up 0.7%.
Ziigmund (Ilari Sahamies) won the biggest pot of the last 30 days from Patrik Antonius. The pot was worth $255k. Ziigmund also won the second largest pot, of $209k, from Brian Hastings.
US Regulation and Prohibition
• The House Ways and Means Committee held a hearing into Rep Jim McDermott’s bill to legalise online gambling. No vote was held, but the consensus amongst the committee members who took part in the debate appeared to be broadly in favour of the principles behind the bill.
• The Las Vegas Sun suggested the debate on online gambling has now moved from ‘should it be allowed?’ to ‘how to regulate it?’.
• California introduced a bill to create an intrastate online poker system. The bill proposes that three five-year contracts would be awarded to California-based operators. The bill has been designated an emergency measure so would go into effect immediately upon legislative passage.
• Senator Harry Reid’s office said that rumours he was pursuing online poker legislation are ‘greatly exaggerated’, but confirmed his staff are looking into the matter in detail. Sen. Reid is the Senate Majority leader and a Senator for Nevada.
• The New Jersey Senate wagering and tourism bill passed a bill that would allow online gambling in the state. Taxes would be charged at 20% of revenues. The Senate president is yet to decide whether to bring the bill for a floor vote.
• As of 1 June, Banks are now responsible for implementing UIGEA. The law has been in effect since January 2009, but as of June banks are legally responsible for complying with it.
Rep Earl Blumenauer, who voted in favour of UIGEA in 2006, now supports legalizing online gambling and has apologized for his earlier vote.
• A man in Beverly was charged with racketeering and related offences in connection with an illegal gambling business operating from an Antiguan internet site. He is one of the first individuals to be charged under UIGEA.
• Douglas Rennick, another man charged with processing payments for online gambling websites, entered a guilty plea at his trial. He is likely to be sentenced to 6-12 months in jail as well as the forfeiture of $17.1m.
• Kenneth Wienski was also charged with gambling and money laundering offences. The complaint against him describes how informants have been used to target payment processors operating on behalf of websites including Pokerstars, Full Tilt, Absolute Poker and Bodog.
• According to the head of the Interactive Media Entertainment & Gaming Association, New Jersey is likely to the first state to regulate online gambling and will do so in 2011. Bills are currently awaiting committee hearings in both the state Senate and Assembly.
• The Eastern provinces of Canada, including Newfoundland, are considering regulating online gambling. The provinces are debating the practical aspects of introducing online gambling in the Newfoundland legislature.
• Barney Frank now expects the House Financial Services Committee to vote on his bill in July. Timing depends in part on the passage of the financial services reform bill.
• The ECJ gave its decision on the Ladbrokes and Betfair cases against the Netherlands. The judgments were broadly in line with the Advocate General’s earlier opinion. While it can be appropriate for governments to block online gambling operators to combat fraud and crime, it is up to the Dutch courts to decide if De Lotto was given its monopoly licence for these reasons.
• The German Olympic Sports Federation and the Bundesliga both want the Inter-State Gambling Treaty, which bans online gambling, to be overturned.
• France’s Constitutional Council said that new laws regulating online gambling in the country are constitutional. This was the last obstacle to regulating online gambling in France.
• The Irish government said that it intends to tax overseas online gambling operators. The change is designed to underpin funding for horse and greyhound racing in the country.
• EU ministers agreed a common definition of illegal gambling. The ministers discussed a progress report by the Spanish presidency that could lead to an EU legal framework for gambling.
• OPAP said that it expects online gambling to be licensed in Greece in a year. The company expects VLTs to be legalized in the same timeframe.
• The British Horseracing Authority asked that the government change the way the betting levy is collected. It said it expected to collect £77m this year, down from £116m three years ago.
• The new UK government intends to move the National Lottery to a gross profits tax and to use dormant betting accounts to fund improvements in sports facilities.
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