Issue N16, 2007

April 26, 2007

Moves to Legalize Online Gambling in South Africa

The Chief Director of the South African Trade and Industry Department, Fungayi Sibanda, has told a local newspaper that he intends submitting a bill to parliament in July 2007 that will eventually legalize online gambling in his country. The bill is based on a draft that was written up after the South African National Gambling Board indicated a need to regulate the industry and take steps to deal with problematic areas.

Sibanda told “The Herald” that legislation regulating the internet gambling industry could be published as early as December, 2007. This would effectively bring an end to a ban that South Africa carries on this kind of gambling. Already, there are opponents to this new law, including the South African National Responsible Gambling Program (NRGP). This organization has indicated that it does not believe that online gambling can be controlled in any effective way. However, Sibanda has made it clear that this bill would include steps to counter problem gambling and underage access to gambling site.

Ladbrokes and 888.com end Buyout Negotiations

It was learned this week that the negotiations between the gambling bookmaker business, Ladbrokes and the online gambling giant, 888.com have halted, putting an end to the chances of a possible buyout. Since October 2006, the two have been discussing the possibility that Ladbrokes would take over 888.com; however, due to the fluctuating state of the online gambling industry, the deal never materialized.

888.com, although trading on the London Stock Exchange, had the bulk of its business invested in the United States in pre-UIGEA days. When the bill was signed last year, 888.com, like many of its counterparts, was forced to close its business to U.S. gamblers. The company fared better than most since it had already established a firm non-U.S. client base for itself. However, rumors soon began circulating that the company was looking to sell and it entered into negotiations with Ladbrokes. As a result of the failed buyout negotiations, share prices for 888.com fell by 4% on the LSE at 117.75 p.

Washington State Says Online Gambling is not a Felony

Until last month, any citizen of Washington State who was found guilty of online gambling within the privacy of his or her own home could be charged with a Class C felony – essentially on par with other serious crimes such as threatening the State’s governor or being in the possession of child pornography. This law was overturned this week when the State passed Bill 1243, presented by the politician, Chris Strow. Strow has been a vocal promoter of a change to what he called "an inappropriate penalty for an activity responsible adults should be allowed to do in the privacy of their home."

The gist of the new law states that citizens who gamble within their own home for recreation (ie. not for organized profit) will no longer be considered Class C felons. The bill passed very successfully in the Senate on April 3 (45:2) and the House also pulled through in support for the reform with 62:36 on April 17th. There is – of course – a twist of irony to this story: It is perfectly legal to gamble for recreation in Washington State; but it is illegal to operate the gambling sites…

U.S Gamblers Urged to Support Republican Barney Frank’s New Bill

In March of this year, it was heard via the industry grapevine that Republican representative, Barney Frank, would be proposing a new bill, effectively demanding a repeal of the Unlawful Internet Gambling Enforcement Act. The UIGEA was signed into law last year, throwing the online gambling industry into turmoil and essentially blocking this pastime to millions to U.S. gamblers literally overnight.

Frank has been an active opponent to the UIGEA, even going so far as to call it ‘one of the stupidest’ laws ever passed in U.S. history. Rumors have been flying since March that Frank would present his bill in coming weeks and, as things stand, it is due to be introduced on Thursday April 26th. As a result, the American gambling public has been drafted into showing Frank its fullest support as history has shown that introducing legislation does not necessarily mean that it will pass.

Gamblers have been flocking to online message boards and sites in a bid to find out how they can support Frank’s efforts. The Poker Player’s Alliance has been a leader in this struggle and has shown how the gambling public can pull its weight in various ways. For example, members of the public are encouraged to write letters to their local congressmen and women, or make their views known in the local media through letters to the editor, etc. It is generally felt that if more people were vocal about their opinions regarding online gambling, the bill would have a better chance of being passed. Watch this space…