BT's Land of Opportunity

With England's new Gambling Bill going to Parliament perhaps as early as this week, British Telecommunications plc is positioning itself to capitalize on a burgeoning industry.

The Gambling Bill, which could be passed as early as the spring of 2005 (but more than likely not before 2006), will overhaul the gambling industry in the United Kingdom.

The new regulations are sure to attract a bevy of foreign companies. The London Observer reported Monday that U.S. and South African companies will invest more than a combined £3.5 billion in the U.K. gaming market over the next couple of years.

The new regulations are expected to bring Las Vegas-style casinos to cities throughout England and will create a framework for the licensing of remote wagering.

The implementation of the law will take months--maybe years---but companies are preparing for what's to come.

Leading the way in the land-based sector has been MGM Mirage, which confirmed last week that it could invest as much as £1 billion in building casinos in the United Kingdom. Meanwhile, Isle of Capri, another Vegas operator, said it has agreed to "six or so confidential agreements" with sports clubs and landowners and will spend roughly £350 million on U.K. expansion.

Those are just a few examples. So with the North American invasion imminent, officials from British Telecommunications (BT), a global IT and networking services company, were in Las Vegas last week for the Global Gaming Expo, where they met with representatives from a growing number of North American companies eying expansion into the U.K. market.

BT has inked several deals with gaming suppliers in the last year--deals that John Campbell, the company's vice president of global inward investment, says were a long time coming.

"We have been looking at this industry for nearly 10 years now," Campbell said. "Europe in general has undergone a lot of change in the gambling space, and we have been gearing up for this for a long time."

BT announced a pair of deals in the land-based sector at the Global Gaming Expo. A deal with Switch Communications Group calls for BT to develop a local networking hub in Las Vegas, its first in the North American gambling hotbed. The partnership will enable BT to provide local hosting solutions, managed services and global networking services for Las Vegas-based gaming companies.

BT also announced a partnership with WhiteSand Consulting through which the two companies will offer strategic consultancy services to the gambling industry.

Campbell said the agreements are key in laying a foundation for companies looking to expand in either market and for BT to keep on top of emerging trends.

"Whether it be in their home territory or partnering them into the U.K., BT can now offer a complete, secure, local and global networking solution to major gaming companies," Campbell said. "Exciting times lie ahead for the gaming industry both in the U.S. and overseas, and we look forward to being a significant player in the sector."

He also said BT is watching the interactive gaming sector closely.

"There are a lot of limits for the interactive gaming industry in terms of what we can provide since so much of it is offshore," he said. "Our infrastructure won't help them out, but there is a potential for blue-chip centers being built up in the U.K., and we could bring something to the table and have significant input for the industry."

The company is already involved in the development of mobile platforms that are being tested for the gambling industry.