Issue N9, 2007
March 8, 2007
China Continues to Close in on Internet Gambling
This week, a new directive was issued by Chinese authorities that the country would not be permitting the opening of any new internet cafes in the present year. This is despite the fact that statistics show that there has been a remarkable increase in the number of Chinese who actually play and gamble online. 18 million out of the country’s 123 million internet users are under 18 years of age and out of these youth, a whopping 13% are classified internet addicts. Newspaper reports show that addicts sometimes undergo shock treatment and other unconventional forms of therapy to overcome their addictions.
China has over 100,000 regulated internet cafes within its borders, however under 18s are not allowed into these establishments. As part of an ongoing three-month crack down on internet gambling, the Chinese government has declared that it will not allow any more internet cafes to open up in 2007. China is growing continually concerned with the number of its citizens who spend much of their income on illegal gambling activities.
New Turkish Anti-Gambling Law Described as “Draconian”
Experts from around the world have come down hard on the Turkish government and have sharply criticized its recent legislation that clamps down on internet gambling. The new, long-winded law (known as the ”Bill regarding Application of Amendments on Certain Laws with Law on Arrangement of Book Making on Football Contests”) actually incorporates all forms of online gambling and also relates to companies operating within the country’s borders as well as international entities.
Some of the strongest opposition to this new law came from Dr. Ola Wikland, a leading expert on international e-gaming law from the University of Stockholm. Wikland went so far as to describe the Turkish law as “draconian” and strongly criticized the fact that companies who broke the law could face up to 5 years in prison and entail heavy fines. Even those who were affiliated or cooperated with these companies could be prosecuted and imprisoned.
Wikland was extremely critical of the fact that the Turkish law went against the natural policies of the European Union, despite the fact that Turkey has plans to eventually become a member state. “It would be deplorable if it will create an obstacle for the ongoing integration process between Turkey and Europe,” Wikland said.
Italy Loses its Internet Gambling Case Against the European Union
Italy was forced to admit defeat this week when the European Union argued that the country was not allowed to bar its citizens from partaking in gambling activities with foreign gambling companies. This ruling comes in the wake of a case where Italy prosecuted three executives from a company known as “Stanley Leisure” for accepting unauthorized bets. The Italian government charged the three for operating betting shops within its borders through the company’s home office in England.
While the European Union court admitted that there may be grounds for restricting gambling due to the moral, financial, societal and cultural factors that it may affect, the Italian government had not prepared a solid enough case and therefore, they had no choice but to rule that Italy’s steps violated the Union’s principals of freedom of choice and marketing development. The ruling of this case could force Germany and France to also make changes in its state-run gambling monopolies.
UIGEA Affects Growth of Mobile Gambling
A market research analyst group has shown that the Unlawful Internet Gambling Enforcement Act stumped the growth of a still-fragile mobile gambling industry. Nevertheless, the company predicted that by 2011, bets to the value of $16-billion would be placed on mobile phones. It was shown that just as new products started to show their potential in the mobile industry last year, the clampdown by United States authorities on their operations forced them to change directions and seek alternative markets.
The market research group, Juniper Research, noted that the Far East was the biggest untargeted mobile market and had enormous potential in future years. The group says that growth in this region could reach up to $6.7-billion by 2011 – a huge jump from the $647-million that was generated in 2006. It comes as no surprise that the European market is the most active mobile gambling hub today. The United Kingdom will probably lead the revolution in this area, which has a mobile betting value of approximately $665-million – a fair portion of the world’s total $1.35-billion expenditure on mobile gambling.
If it were not for the UIGEA laws in the United States, there is no doubt that the United States would be a major leader in the mobile gambling industry. The country has enormous customer bases and the technology to provide the services. As it stands today, however, the US mobile gambling industry is being stifled and needs to readjust its focus on alternative markets.