Online Gambling: Monthly Form Guide
Mar 11
Summary:
February saw progress on online gambling in several US states but more surprisingly also at the federal level, though New Jersey’s veto was a disappointment. Rep John Campbell intends to co-sponsor online gambling legislation with Rep Barney Frank, and we think this news is encouraging as Mr Campbell is a Republican, and online gambling legislation has been expected to make little progress now that his party holds a majority in the House of Representatives. There was also plenty of activity at the state level, with a bill including internet gambling introduced in Iowa, a grouping of tribes in California expressed its support for one of the state’s online poker bills, and in Florida Rep Abruzzo’s bill is now likely to be considered by the legislature this month. The governor of New Jersey vetoed a bill that would have allowed online gambling in the state, despite the overwhelming support it received from both the Senate and the Assembly in the state. While this is disappointing, it was largely expected, and it is unlikely that profits from the state would have been material for the European operators given the high tax rates included in the bill. Governor Christie’s veto does not halt progress in other US states, nor does it have an impact on potential federal legislation, and Lesniak has suggested that changes in the bill could ease its passage later in the year. In Europe the German state of Schleswig-Holstein submitted draft online gambling legislation to the EU which would permit all products at a 20% GPT rate, the latest draft of the Spanish online gambling bill proposed a 25% gross profits tax for most products and in France a parliamentary committee is reviewing the country’s online gambling market and legislation.
Poker Traffic update:
Overall poker traffic on the .com sites remained broadly in line with January. Pacific Poker is retaining the increased market share it has built up since its software refresh, although its share is no longer growing.
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
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.
US Regulation and Prohibition:
Gov Christie vetoes proposed New Jersey online gambling legislation While this is disappointing, it is unlikely that profits from the state would have been material for the European operators given the high tax rates included in the bill. Governor Christie’s veto does not halt progress in other US states, nor does it have an impact on potential federal legislation.
Rep. John Campbell intends to introduce a federal bill to regulate online poker. The news is encouraging for online gambling as Mr Campbell is a Republican so it suggests there is some support for the measure within his party.
Online gambling opponent Sen. Jon Kyl announced he will not stand for re-election in 2012. Mr Kyl was one of the chief architects of UIGEA.
A bill that would allow online poker was introduced to the Iowa legislature. The proposals were included within a wider gambling bill. One vendor would run a hub website that would allow land-based casinos to participate.
Rep. Joseph Abruzzo’s bill to allow online poker in Florida is due to be considered in the legislature from 8 March. In theory the law could be implemented by July.
Sen. Lou Correa’s bill to allow online poker in California won the approval of the California Nations Indian Gaming Association, which represents 29 tribes. Correa’s bill would restrict licences to California tribes, racetracks and card clubs.
Betfair is considering bidding for a New Jersey racecourse. The New Jersey governor has already signed off on legislation that will allow exchange betting on horseracing in the state.
The were more US payment processor seizures by the US Attorney’s office.
The Wall Street Journal published a survey of efforts to legalise online gambling in the US by various states. The WSJ expects a domino effect round the country if one state legalizes online gambling.
European Developments
Italy’s cash games decree passed into law. Cash poker and casino games will be subject to a gross profits tax of 20%. The decree on new licenses should also be approved shortly.
The German state of Schleswig-Holstein submitted a draft online gambling law to the European Commission. The draft would allow sports, poker and casino and would tax gross profits at 20%.
The Spanish cabinet passed a revised draft gambling which appears to permit all products with gross profits taxes for most of 15-25%. The law was passed to parliament under an emergency procedure so could be ratified by this summer.
A French parliamentary committee is reviewing the country’s new online gambling legislation. A report is due in May.
An announcement on UK remote betting regulation is expected in the next few weeks. It is likely to require offshore companies offering online gambling to UK customers to hold a UK licence. Tax changes may follow.
Norway is considering using ISP-blocking to prevent foreign operators accessing the market.
The Dutch government is considering auctioning a limited number of online gambling licences in 2012. It hopes to raise €10m in licence fees from the sector.
The European Union issued a second detailed opinion against Romanian online gambling reforms. The reforms would require EU-licensed operators to be established in Romania and to be involved in a Romanian land-based operation in order to be awarded a licence.
News from around the world
Betsson established a relationship with a Chinese company which has set up a JV in the sports lottery industry. The company expects China to issue internet lottery reseller licenses in the future.
A review of Betfair’s track record in Australia suggests that the racing industry’s fears when it entered the market were overblown. The company has paid nearly AUD 50m in product fees and taxes over the last five years.
