Online Gambling: Monthly Form Guide
Oct 10
Summary:
This month there was plenty of movement at the State level in the US. In California Governor Schwarzenegger signed into law a bill that will allow exchange betting on horse racing from May 2012. In the same state, the indictment of Senator Roderick Wright looks to have slowed progress of online poker legislation. In Washington PokerStars has stopped accepting real money players after a ruling in the state’s Supreme Court. A group of tribal casinos has signed a deal to allow interstate internet poker accessible from within tribal casinos. At the Federal level there was not much activity on online gambling legislation in October, and Nevada Senator Harry Reid is reportedly still considering his position on the issue. There was also more activity related to payment processors linked to offshore online gambling sites, and it appears prosecutors are becoming more active here. In Europe the ECJ ruled that gambling rules breach EU law in Germany and Austria, Ireland is considering extending taxes to online gambling, and Denmark is due to allow operators to access global liquidity when it regulates online poker next year. Spain and Greece are also making progress towards regulated markets.
Poker Traffic update:
September saw a seasonal pick up in traffic for most operators. Growth was fastest for Full Tilt and PokerStars, and Pacific and PartyPoker saw some sequential growth too. Year on year declines for Party and Pacific were broadly in line with August. PokerStars was boosted during the month by its 50 billionth hand promotion, and hit a new all-time record with 105k active players. According to PokerScout the French market, on 8%, overtook Italy, on 7%, in terms of global market share.
Source: H2 Gambling Capital, Morgan Stanley Research. Average seated players between 1800 and 2400 BST
Source: H2 Gambling Capital, Morgan Stanley Research. Average seated players between 1800 and 2400 BST
Ready to Roll:
We highlight some of the key forthcoming dates and events.
Biggest Pot
Cadillac1944 won the biggest pot of the month, worth $575,972, from Ziigmund. He also won the month’s second biggest pot of $543,780.
US Regulation and Prohibition:
• California Governor Arnold Schwarzenegger signed a bill that permits exchange betting on horse racing from May 2012. The move requires approval from the California Horse Racing Board.
• A group of Indian Tribes signed an agreement with Cake poker to set up an inter-state online poker network in the US. The network would be accessible from casinos on Indian lands.
• Former Full Tilt Poker employee Jason Newitt was subpoenaed by the U.S. Attorney’s Office for the Southern District of New York. The reason for the subpoena was not disclosed, but the same office has previously been involved in prosecutions of payment processors linked to online gambling.
• Daniel Tzvetkoff, an Australian who was arrested in Las Vegas in connection with bank fraud and money launmdering related to payment processing for online gambling companies, has reportedly been released. A former FBI agent suggested that he had agreed to assist in the prosecution of ‘bigger fish’.
• The New York Times reported that casino trade body the American Gaming Association was working on a proposal for Congress to allow at least one form of online gambling. It also reported that Nevada Senator Harry Reid was still reviewing the issue of online gambling.
• Goldwater bank in Arizona agreed to forfeit $734,000 of assets related to money laundering and illegal online gambling operations. The bank was accused of transferring funds for several online gambling operations including Pokerstars.
• Efforts to permit online poker in California were undermined by the indictment of Senator Roderick Wright, the sponsor of draft legislation on the subject.
• Sportingbet agreed to forfeit $33m as part of a non-prosecution agreement with US prosecutors. The company admitted it had used payment processing methods designed to misrepresent the nature of its customers’ transactions.
• PokerStars stopped accepting cash from players in Washington. The move was a result of the Washington Supreme Court’s ruling that upheld the prohibition on online gambling, which was contrary to the opinions of PokerStars’ own lawyers.
• The US is considering requiring banks to report all cash transfers into and out of the country. The proposal would make it harder to transfer funds between offshore online poker websites and their customers.
European Developments:
• The ECJ ruled that German laws that ban online gambling by private operators are not ‘consistent and systemic enough’ to support the argument that they prevent gambling addiction. Extensive advertising undercut the argument that the monopolies serve to limit addiction.
• Austrian gambling laws preventing access to the market by foreign companies were also ruled incompatible with European law. The ECJ said that the monopoly. Current Austrian rules do not permit companies established outside of Austria to operate within the country. However the ECJ said ‘the absence of a competitive procedure when the concessions were granted to Casinos Austria AG does not comply with freedom of establishment and freedom to provide services’.
• Research by Nielsen showed that half of all online gamblers in the UK earn over £30,000 a year, and that UK online gambling traffic is up 40% in the year. A significant amount of the growth was driven by the National Lottery.
• The Spanish government has proposed a national regulator and new taxes for online gambling. The country wants to comply with European law, and will negotiate on the matter with the country’s autonomous regions.
• The Greek finance ministry held a conference on its proposals for regulating online gambling. The country will form a gambling commission, and intends that its new rules will be compatible with European law.
• The head of the UK’s panel on tackling betting corruption in sports said that European bookmakers were not to blame in the recent cricket spot-fixing scandal. Problems lie with bookmakers in countries where betting is illegal.
• Sportingbet announced that it will not return to France in 2011, that it had closed its office in the country and had cancelled its B2B contracts there. The company said it would take several months for the company to comply with new IT regulations, and that it would continue to monitor the market.
• Ireland is considering extending the turnover tax on betting to online operators. The government is also considering raising the rate to 2% from 1%.
• Denmark is likely to allow operators to access international liquidity when it regulates online poker. However, the market is now unlikely to open before March or April of next year.
News from around the world:
• The UK government is lobbying its counterparts in Commonwealth nations to legalise sports betting. It argues regulation would reduce corruption in some sports.
• Sega closed its online casino and poker sites. The move came less than one year after launch.
• bwin closed its download casino in Canada. This followed a series of other operators after changes in Canadian legislation.News from around the world
• The UK government is lobbying its counterparts in Commonwealth nations to legalise sports betting. It argues regulation would reduce corruption in some sports.
• Sega closed its online casino and poker sites. The move came less than one year after launch.
• bwin closed its download casino in Canada. This followed a series of other operators after changes in Canadian legislation.
Online Gambling: Monthly Form Guide
Sept 10
Summary:
Momentum behind federal regulation continued to gather during August. Senator Harry Reid, who is both the Senate majority leader and a senator for Nevada and so likely to be key in any Senate vote on online gambling legislation, said he was prepared to support regulating online poker. Although Barney Frank’s bill made no formal progress, the Poker Player’s Alliance suggested it could be attached to other legislation in the post-election ‘lame duck’ session, and Rep Jim McDermott was reported to have been pushing for his companion tax bill to be marked up in the House Ways and Means Committee. In the states, legislation to allow exchange betting on horse racing in California made progress, and an application that allows Nevada residents to bet on sports on mobile phones legally was launched. In Europe, a Dutch government commission proposed allowing several companies to have online gambling licences, and Greece issued draft proposals to allow licensed online sports betting, casino and poker. More provinces in Canada now look likely to start offering online gambling despite the teething problems with the launch in British Columbia, and a South African court ruled that online gambling is illegal in the country.
Poker Traffic update:
Some operators saw some month on month traffic growth in August, including the US facing operators Full Tilt and PokerStars, which is encouraging after recent weakness over the World Cup. Pacific saw strong growth in August, after 888 launched the P6 poker platform, aimed at generating more interest from recreational players. PartyPoker saw a month on month decline in August, although it had a stronger July than most.
Source: H2 Gambling Capital, Morgan Stanley Research. Average seated players between 1800 and 2400 BST
Source: H2 Gambling Capital, Morgan Stanley Research. Average seated players between 1800 and 2400 BST
Ready to Roll:
We highlight some of the key forthcoming dates and events.
Biggest Pot
Phil Ivey won the biggest pot of the last 30 days from durrrr (Tom Dwan). The pot was worth $477k, over twice the size of last month’s biggest pot.
US Regulation and Prohibition:
• The Poker Players’ Alliance said that Barney Frank’s federal online gambling bill could be passed as an attachment to other legislation before the new Congress starts in January. (CardPlayer.com, 7 August)
• Rep Jim McDermott has requested the chairman of the House Ways and Means Committee to schedule a markup hearing for his Internet Gambling Regulation and Tax Enforcement Act. The bill is a tax raising companion to Barney Frank’s bill. (Casino City Times, 26 August)
• US Senate majority leader and senator for Nevada Harry Reid said he was prepared to support legalizing online poker in the US. Some Las Vegas casino executives expressed concern about this. (Reno Gazette Journal, 26 August)
• California’s Assembly approved legislation that would allow exchange betting on horse-racing in 2012. (Thoroughbred Times, 1 September)
• The American Gaming Association has entered discussions with those pushing for regulated online gambling in the US. The head of the AGA also said that discussions were taking place to ensure operators currently accepting bets from the US were unable to monetize their assets post any change in legislation. (eGaming Review, 1 September)
• The Commonwealth of Kentucky amended its suit against various online gambling operators to reclaim losses by state residents to include PartyGaming. The suit covers the period March 2005 and September 2009 and PartyGaming pulled out of the US in 2006, and industry lobby group iMEGA suggested the timing of the amendment was linked to PartyGaming and bwin’s merger announcement. (PokerNewsDaily, 12 August)
• Harrah’s launched a freeplay internet poker site in the US using its World Series of Poker and Caesar’s Casino brands, with technology and other services provided by Dragonfish, 888’s B2B division. (Online Poker News, 9 August)
• Two US payment processors accused of money laundering with respect to wire transfers related to online gambling settled with prosecutors and will forfeit $13.3m. The payments were reported to be linked to PokerStars. (North Country Gazette, 18 August)
• Barney Frank debated his online gambling legislation with Jay Leno.
• American Wagering Inc announced that it had launched a mobile phone application that allows users to bet on sports legally in the state of Nevada. So far it is only available on BlackBerry. (PR Newswire, 31 August)
European Developments:
• French ISPs have been ordered to block online gambling sites without a French licence by Arjel, the French regulator. The ISPs appealed the order unsuccessfully. (ClearlyCasino, 22 August)
• Bwin co-CEO Norbert Teufelberger said that he expects that PokerStars and Full Tilt would not be allowed to operate in the US if the market regulated, but if they were then pulling out of the US would have been a big mistake. (eGaming Review, 19 August)
• A Dutch Justice Ministry Commission suggested that online poker should be opened up to several companies. Internet gambling in the Netherlands is currently subject to a government monopoly. (Casino Gambling Web, 24 August)
• Greece released draft legislation to regulate online gambling in the country. Operators would have to set up a server in the country and use a Greek domain name. Sports-betting, poker and casino would be allowed. (eGaming Review, 31 August)
• Three Pakistan cricket players were accused of deliberately bowling no-balls in a Test Match. The FT argued that the best way to deal with the problem is through regulation of gambling in Asia. (Financial Times, 29 August)
News from around the world:
• The Hong Kong Jockey Club said that gambling revenue in Hong Kong rose 7% in the year to June. (Monstersandcritics.com, 1 September)
• Online gambling is now illegal in South Africa according to the Gauteng Gambling Board after a North Gauteng High Court judgment. Both operators and players would be breaking the law by playing. (Business Day, 24 August)
• Four men appeared in court in China, accused of facilitating online betting on World Cup football games. They were charged with helping 20 gamblers wager around $7.5m. (Recent Poker, August 2010)
• Ontario announced that it will have an online gambling programme set up by 2012. In Canada, British Columbia and the Maritimes have already adopted online betting, and the Quebec government is expected to introduce it in September. (CBC, 10 August)
• A court in Delhi said that sports betting in India should be legalized. It said that legalizing betting would help the government track the transfer of funds and it could use the revenue for public welfare. (Cricinfo, 1 September)
Vaughan Lewis,
Morgan Stanley Research
20 Bank Street | Canary Wharf | Floor 06
London, E14 4AD
Phone: +44 20 7425-3489
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