Editorial: Those Who Favor 'Unfettered' Gambling Are a Minority

30 June 2003

I enjoyed reading "Dispelling the Border-Control Myth." The only thing I thought was missing was "Dear Tim" as a salutation... :)

Seriously though, I (as you would probably expect) disagree with some of your logic. Perhaps though our own environments give rise to our personal perspectives. The United States, with its lingering bans on certain forms of organized (and I mean state-licensed as against crime-run) gambling, most notably sports betting, in spite of its widespread social acceptance despite its illegality, is poles apart from Australia, which colours (colors) my thinking (and even spelling).

Encapsulated in my arguments for jurisdictional integrity is an expectation that (some) gambling will be permitted within a jurisdiction, but on terms (including responsible gambling, taxation etc.) that are acceptable to the regulatory authorities in that jurisdiction. These two things combine, like the "perfect storm," starving offshore operators of users where its legal (as they can't get any traction due to bans on non-licensed operators advertising vis-a-vis the United Kingdom) and leaving them only to fight for users where its not (with increasing controls against them).

The United States is in the latter, but somewhat uniquely (because of the sports betting factor), it is an enormous and willing market. The psyche of Americans where personal rights are held high and the undercurrent of suspicion of "big" government runs deep; it makes it a fertile fallow ground for offshore operators and at the same time a rock hard environment restricting the ability of those who would place local impediments (e.g. blocking via US ISPs).

To continue the "agricultural" analogy one step further, the best way to keep weeds out of fallow ground is to put something in it--a crop or pasture that will starve the weeds out. This is what most jurisdictions will do.

The Australian IGA is portrayed as "prohibitionist." This is simply not true; all forms of gambling that are restricted from being provided online are available physically in (most) Australian jurisdictions. Contrary to reports suggesting the failure of the Act, the fact the matter is that offshore online gaming has a miserable share of the Australian gaming market.

One point you gloss over is that these stories are appearing in "the world's prominent business publications." This is key to understanding that these issues are moving in broader business, political and community spheres rather then the rarefied environment of "industry professionals."

Your editorial is playing to a home crowd, but my view, and the view now being expressed in the wider press, reflects community sentiment, which almost universally is that gambling is a "social evil" that, if permitted, must be regulated. The point that I try and make is that governments are only concerned with the majority opinion, and unfortunately, those in favor of unfettered gambling are in the distinct minority.

There is nothing new in this move to order and regulation; from an historical perspective this is a cycle we have seen before. I suggest you obtain (from Amazon for about $11 no sales tax ... yet) a copy of "Ruling the Waves - From Compass to the Internet, a History of Business and Politics along the Technology Frontier" by (Harvard Professor) Debora L. Spar, published by Harvest/Harcourt. The current U.K. perspective isn't much different from the days of Elizabeth I and Sir Francis Drake: state sponsored piracy. Well, there isn't much piracy on the high seas any more! I will even go so far as to say that the Caribbean's last cycle peaked in the 17th and 18th centuries when it was the home of piracy--Blackbeard and all manner of colorful characters.

The other issue is, and to Americans, where "The First Amendment" are almost their first spoken words, is that control will come via Internet services providers, who are in the some jurisdiction as the punters and subject to coercive force of the police powers of that jurisdiction.

My argument is simple: If an illegal gambling operator doesn't target a jurisdiction (by not accepting clients in that jurisdiction) then it will be left alone. But, if they target the jurisdiction, they can expect to have their domain sequestrated in the jurisdiction and all of there Web site traffic redirected as well as have outgoing and incoming e-mail either blocked or redirected to government authorities.

Technically this is not difficult to do - the Internet DNS 'domain name system' has a presumption of trust - if you put a "false" record in the DNS of an ISP then and then any user requesting a lookup (as they must because of the TTL 'time to live' expiry in their local case) is simply given the "wrong" IP of the website, mail server etc.

Additionally, again an anathema to Americans, is the use of publishing restrictions to limit the access to illegal material promoting illegal services. I understand that the U.S. Supreme Court is expected to hand down a decision on "commercial speech" (in the context of the First Amendment) this week. I wonder if it will go the same way as the judgment last week requiring U.S. libraries to install Internet filters.

Anti-spam legislation, which has huge, if not unprecedented, public support, is also expected to include the explicit bans on sending illegal content, which would include solicitations to use illegal services, or material that is otherwise banned under statute (such as the publishing of betting information unless you are licensed in the jurisdiction).

As to Mark Roberts' arse, well that sort of crap may get to air live, but only fleetingly. The Australian Interactive Gambling Act bans such material with the only exemption being for inadvertent broadcasting (live). I understand that warnings were sent to broadcasters after the French Open when the streak was included in highlight packages in morning news programs. Certainly some more informed broadcasters rushed to edit it out of the imported packages and then turned their less attentive competitors in to the Australian Broadcasting Authority.

My final assessment is that all we are seeing is legislative and regulatory lag. Make hay while the sun shines if you want, but if you want to be in this business for the long haul, start working with governments now.

Tim Ryan is a graduate of Agricultural Science, though he is probably best described as an innovator. He has worked in consumer online information and transaction systems since their inception and was the Australian pioneer of television data broadcast and is still the Consultant General Manager of the Seven Network’s teletext and datacast services – the principal provider of real time wagering information in Australia. Tim was an innovator of integrated wagering information and transaction systems. He has also consulted to a number of wagering system developers on the internationalisation of their systems. Tim became a NSW licensed bookmaker early in 2000 for regulatory reasons associated with the development of wagering systems. Despite not being a ‘working’ bookmaker Tim was appointed to the Australian Registered Bookmakers Advisory Council, Australia’s peak body representing all its 800 bookmakers. In this capacity he was instrumental in lobbying the independent Senators and the Government to ensure the exclusion of wagering from the Interactive Gambling Act.