A Look Back at 2001 (July - December)

31 December 2001

July 12 - Prohibition enters the spotlight again in Washington as the U.S. House Committee on Financial Services holds a hearing to gather opinions on Internet gambling from a variety of sources within the gaming and financial industries. A handful of witnesses argue that outlawing Internet gambling in the United States is not feasible. The prevailing sentiment, however, is that the prohibition effort must move forward. A second hearing with similar results will be held in 12 days.

July 12 - Ladbrokes and British Sky Broadcasting (BSkyB) announce a joint venture to develop and operate a fixed-odds and pools betting service linked to Sky channels on Sky Digital. The five-year deal gives Ladbrokes exclusive rights to offer wagering to Sky Digital viewers, who will be able to watch and bet on sports simultaneously.

July 16 - Rep. John LaFalce, D-N.Y., tells Congress that he plans to introduce an updated version of his Internet Gambling Funding Prohibition Bill (HR 4419). LaFalce's bill will differ from similar legislation introduced by Rep. James Leach, R-Iowa, in that it will not include an amendment exempting betting services that are legal under state laws.

July 17 - England positions itself to become the world's hub for interactive gambling as the British Gambling Review Body releases a highly anticipated report outlining recommendations for U.K. gambling policy. The board calls for the government to establish a regulatory system for the operating online casinos in Great Britain. The "Budd" report quickly becomes the focal point for advocates of legalized casino gambling in England.

July 19 - The U.S. Virgin Islands Senate passes a bill making it legal to operate online casinos based in the territory. Senate President Almando "Rocky" Liburd refers to those who support the bill as "pioneers in a billion-dollar industry."

July 26 - Brian Sandoval announces that he'll step from his post as chairman of the Nevada Gaming Commission chairman on Aug. 1. Sandoval, who played a vital role in the passage of Nevada's Net betting regulatory bill, is rumored to be interested in running for attorney general.

July 27 - While land-based gaming giants ease their way into dominating the online gambling business, publicly held British bookmaking firm Sportingbet solidifies its status as one of the few online-only juggernauts with its purchase of competing bookmaker SportsBook. Sportingbet gains 347,650 customers through the £35.9 million deal.

July 30 - The Hard Rock Hotel and Casino joins an expanding club by adding play-for-fun casino games to its Web site. The company says the new feature, powered by dot com Entertainment's software, is designed to help build the Hard Rock brand online. It won't speculate on whether it's preparing for real-money play upon legalization.

July 31 - A federal court turns down Internet bookmaker Jay Cohen's appeal of his conviction for violating the federal Wire Act. Cohen's legal representatives expressed in a prepared statement, "Mr. Cohen did not violate the law, and we anticipate that one day the courts will recognize the legitimacy of his position."

July 31 - TRN, the Racing Network LLC, abruptly shutters most of its operations because it's unable to attract enough customers to keep the business alive. The company states: "Despite an industry-inclusive approach which simulcast over 90 thoroughbred, harness, and greyhound racetracks, the multi-channel, direct-to-home broadcast provider was unable to achieve the subscriber growth necessary to sustain operations."


August 1 - The British island of Alderney passes a law legalizing online casino gambling and, as a result, the jurisdiction will soon play host to online casinos. The new law sets guidelines for issuing six initial three-year licenses, which will run £75,000 annually. Names of potential licensees aren't disclosed, but an official press announcement indicates that casino operators from the United Kingdom and the United States, as well as Australia and several European Union member nations, have expressed interest.

August 14 - The Arizona attorney general's office releases a statement claiming that a public-access Internet kiosk owner in Phoenix is acting illegally by providing free Internet access to and advertisements for two online gaming sites. No action is taken, but the statement sets the stage for legal battles in the future.

August 15 - California joins a growing list of states permitting telephone and Internet account wagering through the passing of a bill that will become law Jan. 1, 2002. Gov. Gray Davis vetoed a similar bill in 2000, however the new legislation addresses some of his concerns, including the protection of minors and a sunset provision of 2008, should the fallout from this bill be more damaging than expected.

August 17 - Credit card processing problems take there toll on the Internet gambling industry as stricter enforcement of policy by Visa and MasterCard have many online gaming operators scurrying for ways to better manage their credit card customers.

August 17 - The golden age of Internet gambling in Antigua is showing signs of coming to a close. A recently implemented 3 percent tax on net win has several of the country's I-gaming operators heading for friendlier territory.

August 20 - U.K. betting firm William Hill is successful in getting its ongoing court battle with the British Horseracing Board) referred to the European Court of Justice. Legal proceedings began in March 2000 when the BHB filed suit against William Hill for posting pre-race data from the group's database on its betting site. The case, according to notes British Betting Offices Association Chairman Warwick Bartlett, "is highly significant and has worldwide repercussions"

August 20 - World Gaming plc reaches a settlement with Canadian authorities regarding the three-year RCMP investigation of Starnet Communications, now a virtually defunct subsidiary of World Gaming. The company pleads guilty to one charge of keeping a device for gambling or betting. No company officials were charged with criminal activity. The settlement includes a payment of a CD$100,000 fine along with a $15,000 victim surcharge. The biggest cost, however, is the forfeiture of US$3.9 million from the company's $7.6 million funds frozen since the RCMP raided the company's offices in 1999.

August 28 - Two weeks after legalizing online account wagering, California legislators reject an attempt to prohibit Internet gambling in the Golden State. AB 1229, which would have banned Internet gambling activities in California is tabled by the state Senate Governmental Organization Committee.

August 29 - Playboy completes its assault on Internet gambling by launching its third Internet gambling site. Operated by Ladbrokes' Internet gaming division, PlayboyCasino.com joins PlayboySportsbook.com and PlayboyRacingUSA.com in establishing Playboy as a powerhouse in the Internet gambling business.


September 7 - The Indian state of Karnataka enters the I-gaming world through the creation of an Internet lottery. The lottery is expected to operate throughout the state on 10,000 Internet-capable kiosks, which will also provide residents with access to the Web.

September 10 - Partners Interactive Systems Worldwide Inc. (ISWI) and Global Interactive Gaming Ltd. (GIG) sign a pair of agreements that could put GIG's betting platform in millions of homes. Through the first deal, ISWI will provide Telewest Communications with the world's first fully interactive, play-by-play betting system for use in conjunction with its digital TV service. Through the second deal, GIG and ITV Digital will jointly develop a fully interactive, play-by-play consumer betting product, with a rollout expected for early 2002.

September 11 - No industry goes unaffected by the terrorist attacks of Sept. 11. Cantor Fitzgerald, the parent company of U.K. spread betting firm Cantor Index, is devastated as dozens of employees located between floors 101 and 105 of One World Trade Center perish.

September 12 - Based on recommendations included in the U.K. Gambling Review Body's recently released report, five British gaming companies join forces to form the Interactive Gambling, Gaming and Betting Association (iGGBA) for U.K.-registered companies in the interactive gaming industry.

September 13 - Italian police shut down five sports Web sites allegedly linked to illegal betting. The sites reportedly hosted betting services for a prominent British bookmaking firm and handled several millions of dollars in illegal bets in doing so.

September 15 - Tattersall's launches Australia's first new online casino since the passage of prohibition legislation by the federal government in June. The new site, www.tattsgames.com, offers table games and slots created by several games developers through Access Gaming System's games development kit. Based in Tasmania, the site originally had an online gaming license from the Australian Capital Territory and even briefly launched in 2000 for real-money play. But the yearlong moratorium on Internet gambling and subsequent passage of the Interactive Gambling Bill forced the site to close shop. Players from Australia, Ireland, the United States and various European nations that prohibit their citizens from gambling at Internet casinos are blocked from playing.

September 20 - The Isle of Man grants online casino licenses to land-based casino giants MGM Mirage, Littlewoods Leisure and Sun International. If all goes as planned the three licensees will be operating virtual casinos in a matter of months. Government officials in nearby England, in the meantime, predict legalized online casino gambling in the United Kingdom is still a few years away.

September 25 - Walt Disney Co. creates a new business division aimed at positioning the company as a major player in interactive gaming. Disney Interactive says the new Buena Vista Game Entertainment Studio will create "a new organization to leverage and combine new and emerging technologies, such as broadband and wireless, with video consoles, PCs, other technological innovations and online games to deliver integrated interactive entertainment for a new and exciting consumer experience."


October 1 - Peter C. Bernhard is named chairman of the Nevada Gaming Commission. Bernhard will serve the remainder of previous chairman Brian Sandoval's four-year-term, which expires Aug. 27, 2003. When asked to comment on the future of online gambling in Nevada, Bernhard tells Interactive News that he is not well versed on the issue and will have to study up.

October 3 - Internet gambling prohibition is considered in U.S. Congress as a provision under the Financial Anti-Terrorism Act. Rep. Michael Oxley backs the measure, which includes language from Rep. James Leach's, R-Iowa, Internet gambling funding bill, which has been dormant since hearings in July. Rep. LaFalce, who has drafted a similar free-standing bill, calls the Oxley provision a hindrance to the terrorism bill.

October 6 - A new era of sports betting commences in Great Britain as the long-awaited abolishment of the country's 9 percent betting duty comes into effect three months earlier than originally planned. England's heavyweight bookmakers bring their Internet gambling divisions back onshore to operate under the new policy, through which the betting duty is replaced by a 15 percent company tax on gross profits. The United Kingdom is firmly positioned as the center of the sports-betting universe.

October 11 - Offshore British betting sites may be facing a crackdown on their advertising in the United Kingdom now that the betting tax is no longer in existence. Customs and Excise will soon begin a campaign to put a stop to the £50 million a year that is lost when offshore betting Web sites advertise to the British audience.

October 16 - New Jersey Attorney General John J. Farmer Jr. targets the online gaming industry once again, this time hitting eight operations, including some of the industry's biggest players, with civil lawsuits for violating the state's law by accepting wagers from its residents. Despite Farmer's insistence that the Justice department is will follow through, none of the defendants names are served. The defendants named in the suits are: 2betdsi.com, Intercasino.com, Laythepoints.com, Sportingbet.com, Sportsbook.com, Intertops.com, BetonSports.com and Betmill.com.

October 17 - Hilton Group plc's Ladbrokes sports betting division and British Sky Broadcasting Group Plc (BSkyB) cancel a plan to offer Ladbrokes' fixed odds betting service on BSkyB's Sky Sports and other television channels. The decision to nix the deal follows the commencement of an investigation by the U.K. Competition Commission into whether the partnership violates monopoly laws.

October 17 - Australian media mogul Kerry Packer sets his sights on entering the online gambling business in coming months. An executive from Melbourne's Crown Casino, a property of Packer's Publishing and Broadcasting Limited, tells IGN that the company is aiming to go live with "Crown Online" in early 2002. The virtual casino will be licensed in and operated out of Vanuatu.

October 17 - The Financial Anti-Terrorism Act of 2001 is passed in the U.S. House of Representatives minus a provision that bans Internet gambling. Rep. Oxley emphasizes, however, that he's still committed to getting a prohibition bill passed.

October 31 - Two weeks after putting thoughts of I-gaming aside to fast-track anti-money laundering legislation a U.S. House of Representatives committee approves a reincarnated version of Rep. Leach's Unlawful Internet Gambling Funding Prohibition Act.


November 1 - Rep. Bob Goodlatte, R-Va., returns to the forefront of the prohibition movement by introducing the Combating Illegal Gambling Reform and Modernization Act. This 2001 version of his perennial Net betting bill aims to update the 1961 Federal Wire Act to include Internet gambling.

November 2 - The Finnish court in Mariehamn, the capital of the autonomous Åland Islands, rules that the Åland Islands' Slot Machine Association (PAF) is not allowed to market its online betting service in mainland Finland. PAF's senior vice president, Karl Gustaf Pietilä, says the group will appeal the decision.

November 9 - A pair of assemblymen in New Jersey introduced a bill that would allow Atlantic City casinos to carry real-time card table games via the Internet. The measure would not change existing laws against wagering on Internet casinos. It would, however, limit Internet wagering from distant locations to "real-time" play only. Nicholas Asselta, a cosponsor of the bill, tells IGN the bill has virtually no chance of passing.

November 9 - A parliamentary commission gives the Dutch government the green light to change its gambling legislation. Among several changes, Internet gambling will be allowed. The new gambling act will be prepared and discussed in Parliament in Spring 2002.

November 14 - MSN.co.uk adds to its site a gambling channel that includes fixed-odds betting, lotteries, casino games and pools from the biggest names in British bookmaking.

November 15 - Visa steps up its efforts to thwart online gambling by implementing a policy through which it audits gambling Web sites to make sure they are using the correct authorization codes when they submit transactions to member banks. The credit card company will periodically test I-gaming sites by attempting to make transactions. First time violators will be fined $25,000; for second, third and fourth transgressions, the merchant will be fined $50,000, $75,000 and $100,000 respectively.

November 23 - Not everyone in the United Kingdom is happy with the Gambling Review Body's recommendations for gambling policy in England. The British Horseracing Board counters with proposals of its own to change racing and betting rules and regulations in England. The board's "Memorandum to the Department for Culture, Media and Sport" takes aim at many issues, with person-to-person betting sites at the top of the list. The board expresses serious concern that a number of the proposals in the Budd Report would lead to significant deregulation.

November 28 - The Venetian Hotel Resort and Casino in Las Vegas becomes the latest Nevada mega-casino to offer free-play online casino games. The company inks a deal with Interactive Solutions Corporation (ISC) through which ISC will develop more than 30 casino games to reside on its Web site. Despite the company's previously expressed interest in online gambling, the Venetian's Internet marketing manager says the deal is more about marketing and promotions than it is about taking a step toward offering real-money play.


December 3 - The California Horse Racing Board formally adopts regulations that give the go-ahead for account wagering in the state by approving an advance deposit wagering system. If the board approves companies to provide the service, and the Office of Administrative Law gives the regulations the thumbs up, racing fans could be betting with the system as early as Feb. 1, 2002.

December 3 - A three-year undercover and financial federal investigation comes to a head on when two U.S. men plead guilty to a host of gambling and tax charges. The defendants, owners and operators of Gold Medal Sports, an online sports book that operates out of Curacao in the Netherlands Antilles, face sentencing in February. The various charges could bring up to five years in prison and up to $500,000 in fines.

December 4 - Ireland passes a new policy through which the country's betting duty is lowered from 5 percent to 2 percent. The new system will go into effect May 1, 2002.

December 11 - Reports from the Isle of Man indicate that the process for bringing legalized online casino gambling to the jurisdiction might not be going as smoothly as it seems. The government is accused of giving future I-gaming operators preferential treatment by not subjecting them the same money laundering laws adhered to by most of the island's other businesses.

December 18 - The mayor of Las Vegas for the second time in little more than a year explores the idea of selling the name and city seal of Las Vegas to an online casino.

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.