A Glance at 2001

31 December 2000
Following is a rundown of important issues to keep an eye on in the coming year, as well as a few predictions.

Prohibition 2001 - Will the moratorium in Australia lead to a ban on Internet gambling? How far will the prohibition effort in the United States go in 2001? Will Hong Kong extend its ban on offshore wagering to include Internet services? How will Internet gambling be assessed in the Philippines once political order is restored?

The 'Race' - It's only a matter of time before the United States recognizes the need for Internet gambling regulation rather than prohibition. But how much time? Nevada and New Jersey are on the verge of turning the corner, with legislators in both states preparing to introduce regulatory legislation in 2001. Are the two states ready to embrace the inevitable? If so, which state will welcome online gambling first? Will other states follow?

The United Kingdom - The U.K. Gambling Review Body is scheduled to make recommendations this summer for modernizing Great Britain's antiquated gaming policies, and Internet gambling is on the agenda. Will the panel recommend the legalization of online casinos? If so, will there be a sizeable opposition such as that in Australia?

The Payment Crisis - The hottest, most crucial issue for Internet gaming entering the new year is payment processing. MasterCard, Visa and several card-issuing banks made it clear in 2000 that they don't want Americans gambling on the Internet with credit cards. Thanks to new policies, some online gambling sites have lost as much as 75 percent of their business. Will a new payment system replace the credit card as the preferred method of payment? Will financial institutions call the dogs off? Will their U.S. policies become international policies?

The Market - Dot-coms have been getting murdered in the stock markets since March, and interactive gambling companies, particularly in the North American markets, have fallen victim to the trend. How will the i-gaming stocks perform in 2001? How many companies will fold? What effect will activity in U.S. Congress have on the market?

The Caribbean - As the First World pussyfoots with Internet policy, will jurisdictions in the Caribbean capitalize as the window of opportunity steadily closes? Will Antigua tighten up its money laundering laws to the liking of the U.S., the U.K. and the United Nations? Will Costa Rica emerge as a leader? Will the country's online gambling companies bail if and when strict regulations are introduced?

South Africa - South Africa has been on the verge of establishing a federal regulatory system for online gambling for more than a year, but the front has been very quiet for months. Is progress under wraps or has the country lost its interest in getting in on the action?

The Exodus - In 2000, Great Britain's treasury was faced with the choice of either lowering the betting duty for its bookmakers or losing their business all together. It chose to maintain the status quo, and its biggest bookmakers have relocated to offshore jurisdictions with friendlier tax rates. Betting companies continue to plead with the government to set the tax rates at a competitive level, but the government hasn't budged, and the exodus continues. Most expect the treasury to eventually figure it out, but will it be too late? Is it already too late?

The Business - Will Internet gambling revenues continue to rise at the same rate? What will happen to the many relatively unknown i-gaming operators as larger companies continue to get involved in the industry? Will they sell? Will they compete? Will they fold?

New Technologies - In 2000, we realized that interactive gambling goes far beyond the Internet. Betting via alternative media such as interactive TV and wireless devices arrived and promises to undergo tremendous growth in 2001. Will these new media overtake the Internet in popularity? How many gambling businesses will invest in new technologies like these? Will the new media be up to speed in terms of security?

Additional News and Issues to Watch:

  • The Jay Cohen appeal.
  • Stock market volatility.
  • The fate of the U.K. National Lottery.
  • Money laundering in the Caribbean.
  • The American Gaming Association's position on Internet gambling.
  • Possible legal action by Australian gaming companies against the federal government.
  • Pending credit betting lawsuits in the U.S.
  • The rising popularity of online person-to-person betting.

    Finally, a few predictions for the coming year:

  • Australia's federal government will enact a moratorium on discussions about whether it will enact a moratorium on the enactment of a new moratorium that will extend the original moratorium so that it can conduct 450 more government inquiries into the feasibility of banning Internet gambling. Tax money to fund these very important studies will be drawn by quadrupling the amount of poker machines in New South Wales. At the eleventh hour, media mogul/casino owner Kerry Packer will save the day--sort of--by purchasing the entire country. His first order of action will be the removal of all gambling-related moratoriums, which by this time will have extended retroactively to the birth of Christ. Weeks later, Packer will lose the country in a poker game in Las Vegas with an unnamed casino executive. The unnamed casino exec, in hopes of squashing competition in Australia, will restore political order back to the way it was before the Packer purchase. He will then give the country to his wife and announce one month later that he will have the country imploded and build a bigger, more glamorous Australia in its place.

  • Arizona Senator Jon Kyl will finally get his Internet Gambling Prohibition Act passed as part of a budget bill. The slightly modified Kyl bill will include exemptions for casino games, bingo, lotteries, sports betting, dog betting, horse betting, jai alai, person-to-person betting, fantasy sports and all wagering based in churches or on Indian lands. President Bush will veto the legislation, however, citing that the penalty should be execution rather than the $2.5 billion fine proposed by Kyl. With the collective understanding that Kyl will never go away, along with the fear of sacrificing multiple happy hours to debate the legislation, Congress will unanimously vote to override the veto. On a side note, I predict that the mystery of just who the heck is behind the persistent jai alai lobby in the U.S. will be revealed in the coming year.

  • A United States federal court decision early in the year will establish the precedent that Internet gambling services offered via closed-loop, private networks is definitively legal under current U.S. law. A month later, a savvy businessman will be taken to court for operating an Internet casino out of Kansas and will argue in his defense that the World Wide Web qualifies as "one big closed-loop network." The businessman will shortly thereafter obtain a patent which gives him exclusive rights to offer gambling services through such a network. He'll make several hundred million dollars, but will blow it all on questionable investments, including purchasing the rights to use the name and logo of the city of Wichita for a Kansas-themed online casino as well as dropping venture capital into a startup that manufactures electronic toothbrushes which also serve as mobile betting devices.

  • A well established sportsbook will take wagers on the outcome of the next season of "Survivor," the immensely popular TV show. A camera man on the set, with knowledge of who wins, will open 50 accounts under various user names, all of which are permutations of the nickname "Spanky," using 50 credit card numbers he purchased on eBay. Each version of "Spanky" will bet the max on the show and each will win a big fat heap of money. Before he's able to collect, however, the sportsbook will catch on to his scam and tell him to take a hike. Spanky will then initiate a hate campaign targeted at the sportsbook through various online bulletin boards. The battle of words will persist for several months until Spanky dies of malaria while filming on the set of Survivor 3.

  • Lottery operator Camelot will commences sales of U.K. National Lottery tickets over the Internet in October. To celebrate the venture, the group will make good with its promise to award one lucky winner with a trip to the moon. Amazingly, four people will hit the jackpot on the first drawing. Camelot unfortunately will have reserved seats on the moon shuttle for only one winner and a guest. In an ironic twist of fate, the only commercial airline flying people to the moon will be Richard Branson's Virgin Airlines. Camelot, needing to reserve six more seats, will plead its case to Virgin to no avail. Branson will be regretfully unable to accommodate because all flights, he'll say, are fully booked through the end of the decade. The four disgruntled winners will sue Camelot and its principals will be forced to sell off a majority interest in the group. Branson will purchase the group and take control of the lottery. The lawsuit filed by the four disgruntled winners will drag on until Branson finally strikes a deal to pay them with lifetime supplies of Virgin Cola.

  • Mark Balestra

    Mark Balestra is the Managing Director at BolaVerde Media Group. He previously worked at Clarion Gaming and the River City Group where he was the publisher of iGamingNews. He lives in St. Louis, Missouri.