"Yahoo!" cried the regulator, when passed the news that Yahoo! was dropping interactive gambling advertising. Actually, he was somewhat more restrained: "Good news for us regulators... might make our lives a little easier."
Why easier? Because they would be able to stop chasing down at least one publisher of illegal material.
 |
One has to delve a little bit deeper into both the regulator's and Yahoo's thinking to come to grips with the greater import of this announcement.
|
|
One has to delve a little bit deeper into both the regulator's and Yahoo's thinking to come to grips with the greater import of this announcement.
The "bottom line" (pun intended): No one walks from revenue when the cost basis is nil, and inventory (space to insert ads) is plentiful.
That means only one thing: A "hidden" cost or risk/liability may outweigh the potential revenue.
The only liability (I know of) is legislative/regulatory prosecution--that as a publisher, Yahoo! is contravening legislation in jurisdictions where the information (advertisements) is accessed. Obviously, Yahoo! is not going to admit to those grounds as the basis of its business reasoning; to do so would be an acknowledgment of liability to date.
Traditionally, or is that historically for traditional media, the most effective legislative measure for implementing public policy has been to impose severe restrictions on the publishing or advertising of material deemed contrary to public policy. I know, I know... If you are American, grab the nearest soap box and scream "the First Amendment!" But if you aren't American, and fortunately or unfortunately most citizens of the world aren't, this is a very effective tool, particularly when it comes to gambling services.
Broadly speaking, in most jurisdictions where gambling is permitted, only operators licensed by that jurisdiction are able to advertise their services, and in the case of wagering, only the odds of that jurisdiction's licensed wagering operators can be published (by any publisher). Where gambling is prohibited, so is the advertising. Period.
And there's the rub: Where is it published?
For a long time (well, the last five years), the self-serving argument has been that the Web server is the publisher and the user accessed the information on the Web server, but not any more. As cases work their way through the court systems, the developing line of authority is that something is published where it is read and comprehended, that is, where the user is.
On June 14, IGN reported comprehensively on the Dow Jones v. Gutnick case, which is under appeal to the High Court of Australia on this very issue--at least it was about this issue until the "publishers" conceded before the Full Bench that the offending material was published where the user was (Victoria), not where the server was (New Jersey), and headed off down a slippery slope that jurisdiction (or convenient forum) for defamation was better where the Web server was. But forum is not an issue for criminal prosecution.
|
Yahoo! is the first chink in the armor, and we have seen with the success of the New York attorney general's campaign on the payments front. The threat of prosecution is often enough to get the "right" result.
|
|
Given recent developments, the argument, in respect to electronically delivered services (in particular gambling), that the Internet makes borders porous is at best fallacious and at worst downright deceptive and self serving. Certainly such a premise (that technology has permanently compromised existing wagering legislation) would be a flawed or unsustainable foundation on which to build a real business.
It may have been the case during the early wave of Internet technology innovation that holding back the Internet was seen to be an impossible task, but realistically it is a challenge no greater that the reclamation of land from the sea in the Netherlands.
Current Internet and m-commerce technology has swung the pendulum back, and dramatically so, such that any operator can, with relative ease, identify the jurisdiction of the customer.
Instead of "porous borders," the appropriate analogy now is probably closer to a "force shield," and if an operator in a foreign jurisdiction reaches into the regulated jurisdiction, he will leave a veritable raft of electronic "fingerprints" against which there would be no (legal) defense.
The problem, then, becomes one of enforcement and extradition, but realistically (and this is why the regulator was happy), the big legitimate Internet operators will play ball. It won't happen overnight, but it will be harder and harder for illegal operators to access jurisdictions. Yahoo! is the first chink in the armor, and we have seen with the success of the New York attorney general's campaign on the payments front. The threat of prosecution is often enough to get the "right" result.
Therefore, in my opinion, online gambling operators are about to get caught in a pincer movement on the payment front and the publishing front.
In the meantime, make hay while the sun shines.
The views expressed in this editorial do not necessarily reflect the views of Interactive Gaming News.