Online Gambling: Monthly Form Guide
The European Commission issued detailed opinions against draft online gambling laws in both Germany and Greece in July. Greece passed its gambling legislation broadly unchanged despite the opinion, but questions will remain over the enforceability over the rules given the country does not appear to have addressed the EU’s concerns. The rejection of the German proposals from the Lander, which limit the number of online licenses to 7 and include a 16.7% turnover tax, by the EU contrasts to its approval of Schleswig-Holstein’s more liberal draft legislation. The UK government announced a decision to regulate online gambling at the ‘point of consumption’ rather than rely on licensing by offshore white list jurisdictions, and said that there were likely to be changes to the tax regime for the industry. Cash poker in Italy looks to have started strongly after its launch in mid-July. In the US the AGA, which represents land-based casinos, said it would be likely to publish its own federal online gambling bill later this year and that as a result it would not support Rep. Joe Barton’s draft legislation. Legislative activity was relatively muted as Congress focused on the US debt ceiling, although Senator Jay Rockefeller included online gambling in his list of ways of addressing the deficit without cutting key services.
Poker Traffic update:
Despite July being a seasonally weak month Partypoker and iPoker both had liquidity around 40% higher before the US indictments, up from around 20% higher before the suspension of Full Tilt’s licence. Pokerstars had a strong week in the middle of the month during its 65 billionth hand promotion, but lost most of this benefit at the end of the competition.
Partypoker’s liquidity remains around 40% above its levels at the date of the indictments even though we are now in a seasonally weaker period
Ready to Roll:
We highlight some of the key forthcoming dates and events.
10/08/2011 – Unibet Q2 results
25/08/2011 – OPAP H1 results
30/08/2011 – Paddy Power interim results
31/08/2011 – 888 interim results
31/08/2011 – bwin.party interim results
06/09/2011 – Betfair IMS – TBC
15/09/2011 – Deadline for Alderney Full Tilt hearing
22/09/2011 – Gala Coral Roundtable (Places available. Contact Kate.Pike@morganstanley.com
28/09/2011 – Betfred Roundtable (Places available. Contact Kate.Pike@morganstanley.com
29-30/09/2011 Gibraltar online gambling field trip (Places available. Contact Kate.Pike@morganstanley.com
Morgan Stanley is hosting an online gambling field trip to Gibraltar on 29-30 September. Please contact email@example.com if you would like to attend.
Isildur1 (Viktor Blom) won July’s biggest pot of $165,322 on Pokerstars. It was the biggest pot since the US indictments of Pokerstars and Full Tilt.
US Regulation and Prohibition:
The American Gaming Association, which represents US land-based casinos, said it would not support Rep Joe Barton’s federal online poker. The AGA will instead push its own new bill.
US Senator Jay Rockefeller included regulation of online gambling among his 18 proposals to save $1.3 trillion for the federal government. Rockefeller estimated that regulation would save $42bn over 10 years.
Senators Harry Reid and Jon Kyl wrote a joint letter to the US Attorney General asking him to declare all forms of internet gambling illegal. Aides for the two senators have been negotiating on online gambling since the lame duck session of Congress in December. The letter itself can be found here.
New Jersey State Senator Ray Lesniak also wrote to the US Attorney General to put across the opposite view. He pointed out that UIGEA expressly permits intrastate online gambling, that 37 states already allow online betting on horseracing and that Sen Reid’s home state of Nevada allows mobile gambling.
Bodog will no longer accept bets from US customers after the end of this year. Bodog was one of the few remaining operators to continue to do so after the indictments of Pokerstars, Full Tilt and Absolute Poker.
US land-based casinos set up Fair Play USA, a coalition that is pushing for federally regulated poker in the US and the shutdown of illegal operators. The group published 10 principles it would like new legislation to address.
Washington DC’s plans for online gambling were delayed indefinitely. Concerns over the proposals were raised by the district’s Finance and Revenue committee, which DC Lottery officials plan to address.
Massachusetts is considering a plan to allow the state lottery to sell tickets over the internet. US Rep Barney Frank supports the plan.
The European Commission issued a detailed opinion against the draft Greek law that would liberalise online gambling in the country… The opinion itself has not been published, but the European Gaming & Betting Association suggested that the limit on the number of licences and requiring licensed companies to be established in Greece are among the provisions that are doubtful under European law.
… although the country has passed the bill anyway. MP’s passed the bill as part of a wide-ranging set of legislation before the arrival of an EU/IMF team due to carry out an audit on Greece’s progress on structural reforms.
Germany also received comments from the European Union on its draft online gambling legislation. The commission said the proposal from the Lander ‘appears to limit the freedom to provide services’ without providing ‘explicit reasons’ for such a restriction.
The UK government announced plans to regulate online gambling at the point of consumption rather than supply… This would mean that operators located in jurisdictions that are currently on the ‘white list’ would have to obtain a UK licence.
… and the economic secretary announced that a review of the tax regime would follow.
French online gambling regulator ARJEL followed Alderney in suspending Full Tilt’s licence. The French site has not been accessible since the Alderney suspension in any case.
The head of ARJEL also said that France’s turnover tax regime ‘does not work’. While changes to the rules are unlikely in the short-term, the regulator is working on recommendations for future regulatory reforms.
The Isle of Man Examiner reported that redundancies are likely at 188BET’s office on the island. The company said it is undergoing a strategic review, but did not mention the impact of likely tax changes in the UK.
Cash poker turnover in Italy was around €350m in the first two weeks since the product became available, versus tournament poker turnover of €150m for the month of July. Tournament poker turnover was itself down a third year on year, in part because of the introduction of cash poker.
The Alderney Gambling Control Commission’s hearing into Full Tilt’s licence suspension was adjourned until not later than 15th September. The delay is to allow Full Tilt to pursue negotiations over an investment into the company.