Issue N4, 2007

February 1, 2007

Washington Representative Challenges UIGEA Law

The first legal attempt to challenge the Unlawful Internet Gambling Enforcement Act of 2006 was set in motion this week, when Washington State Representative Chris Strow authored a house bill to try and correct the penalties associated with the UIGEA. Other house representatives, including Upthegrove, Sullivan, Appleton and Simpson, are backing Strow’s House Bill 1243.

Strow’s main complaint is that the UIGEA carries the same penalty as other major crimes in Washington, such as child pornography and making a threat to the Governor. Chris Strow feels that internet gambling should not be synonymous with other Penalty C crimes and is thus challenging the new law.

Chris Strow said that while he understood the need to protect American citizens from shady online casino sites that may be scamming innocent victims, he still considered that adults had a certain level of accountability to act and do as he or she chose in their own home. Strow’s bill is waiting for a hearing in Labor Committee and House Commerce.

Internet Gambling Barred in Israel

Foreign online gambling casinos were effectively banned from serving Israeli customers after a local judge ruled that online betting company, Victor Chandler could not operate in the country. Until recently, this online casino site was tolerated by Israeli authorities within a gray area of the law. The company waged an aggressive marketing campaign last year and its CEO, Michael Carlton noted that out of the 160 countries that his company served, Israel was its second largest market.

Gambling in Israel is controlled by a state-run monopoly, with most of the money that is brought in by lotteries going directly to social projects. Israeli authorities obviously felt threatened by the encroachment of internet gambling companies such as Victor Chandler and at the end of 2006, the State Prosecutor banned online gambling from private operators. As such, credit card companies were also warned not to process transactions that were obviously intended for foreign gambling companies.

The Israeli police continued to warn foreign companies not to advertise in the country and that taking payment from Israeli citizens was a criminal offense. The last straw came at the beginning of this month when police authorities detained Victor Chandler’s CEO, Michael Carlton for two hours before he left the country for Gibraltar. Rishon Le Zion magistrate court judge, Abraham Heiman ruled this week that "in the era of the Internet, the original location of content is marginal and negligible. The center of gravity, especially the territorial legal jurisdiction, must switch to the end point, in other words, the individual computer."

Nevertheless, Victor Chandler is not giving up on a potentially huge market and has already said that it is trying to reach an agreement through the Israeli parliament to solve the problem.

UK Super Casino Winner is Manchester

In the newest chapter of the United Kingdom’s relaxation of rules related to online gambling and traditional gambling, the country has announced which city will be home to the first super casino. Contrary to what many assumed, Manchester will have the right to build and operate a Las-Vegas style casino with 1250 unlimited jackpot games. Out of the seven bidders for the title, Manchester was placed last, while Blackpool and London’s Millennium Dome were firm favorites from day one.

Manchester will invest 265-million GB Pounds into the project that will generate some 2700 jobs in a poor area of the city. The casino will include a stunning entertainment complex, including a swimming pool, restaurants, hotel and bars.

Not everybody is pleased about the new super casino. Tony Blair’s plans for liberal laws pertaining to online and traditional gambling, were toned down by his conservative opposition. The British Police’s Gaming Unit has also issued a report that the new gambling laws will create anti social behavior and an increase in crimes. The British Culture Secretary, Tessa Jowell, however, has refuted claims that the country’s new gambling laws would be detrimental to England, and has argued that regulated internet casino gambling and brick-and-mortar institutions would actually benefit the country in the long run. Jowell has repeatedly come out against the United States’ new UIGEA law, comparing it to the country’s Prohibition Era and calling for the U.S. to follow in the United Kingdom’s footsteps towards a regulation of the industry, instead of banning it outright.