From the Editor's Chair - v6

12 November 2003

A crowd of roughly 300 conglomerated in Barcelona this week to discuss European perspectives on interactive gambling, and there were plenty of perspectives to go around. A general observation. . . There were more new faces at this year's European I-Gaming Congress & Expo than I've seen since the first GIGSE event in Vancouver in 1999.

On the conference side, many of the highlights came from the "Small Jurisdictions" session. In a nutshell, the Isle of Man wants to get back in the game, and Alderney is looking to distance itself from the pack.

Expect Harrah's Entertainment to launch an online casino in the not-too-distance future. The company made a bit of a splash last week when it received permission from regulators in Mississippi (one of several U.S. states in which it operates land-based casinos) to offer online gambling services out of Alderney. During his presentation Tuesday, Alderney Gambling Control Commission Chairman John Godfrey acknowledged that the company's Gaming Online Ltd. unit has sought and obtained an online gaming license in the island jurisdiction. I'm hearing that they'll be moving forward soon. And don't be surprised if Venetian, which obtained an online gaming license in Alderney last year, launches shortly after that.

Godfrey also said officials in Alderney are assembling a group of European regulators to study e-gaming over the course of the next year. Could it be time to reevaluate the GREF position?

Meanwhile, the overall message from the Isle of Man's recently appointed I-gaming ambassador, John Gilmore, as well as attorney Miles Benham during the pre-conference workshop on payment processing, was short and simple: "We screwed up, but we're fixing everything." Overly stringent regulations in the jurisdiction sent the likes of MGM Mirage, Kerzner and Ritz packing, leaving the Isle of Man struggling to stop the bleeding. "Suffice to say," Gilmore said, "this exodus was a wake-up call for the government."

He added that they are committed to being a top I-gaming jurisdiction and that he will shoulder much of the responsibility in bringing them back. He also outlined the major changes in store:

  • The island will concentrate on attracting top "e-service" providers and is already working with a "known" provider in hopes of bringing in top-level licensees.
  • Efforts to make the island a premier location for sports books have been restored.
  • Software accreditation is priced more competitively.
  • Operators are no longer required to have all changes go through the certification process.
  • Online table poker is allowed.
  • Isle of Man operators can participate in progressive jackpot networks based in other jurisdictions.

Another general observation . . . The European position on self-regulation has warmed considerably. Regulators and I-gaming businesses are beginning to recognize there's a place for it in the absence of pan-jurisdictional cooperation.

Recently formed online gambling association eCOGRA, meanwhile, appears to have made a bit of a splash in the European markets. I don't see too many European entities getting in line to sign up, but their acknowledgement of the association's existence is a validation and a step in the right direction. I also notice that European businesses are beginning to point to their Caribbean counterparts--the true pioneers of this industry--as models for success. This, in the wake of land-based operators' consistent failures in the I-gaming space, is yet another step.

The interactive Gaming, Gambling and Betting Association (iGGBA) and GAMCARE jointly introduced on Tuesday a code of practice to address social responsibility issues surrounding remote gambling. The 11-point code covers age and player identification; customer protection; breaks in rapid and continuous play; free-play; and customer- and operator-imposed limits. The code was devised in anticipation of reforms in the United Kingdom, but is also intended for international adoption.

On the P2P front . . . Betting exchanges continue to be a hot topic of conversation. That's no surprise, but this week's talks centered on business strategies rather than controversy--a refreshing change. (Somehow I doubt this will be the case next March in Sydney at the Pacific Congress on Interactive Gaming.)

BetDaq's Rob Harnett says his company has solidified its position as the industry's No. 2 P2P site, and his numbers indicate that they've gained some ground on the market leader, Betfair. Harnett said BetDaq has gained 40 percent of P2P sports betting market (next to 40 percent for Betfair) and 10 percent of the P2P racing market (next to 80 percent for Betfair).

The next growth area in the P2P space, Harnett said, will be wireless.

"Mobile is going to be king when it comes to gambling," he said, adding that success will depend on who develops a functional wireless platform first. "To them," he said, "the spoils of victory will go."

BetDaq, incidentally, is developing a mobile product, which should be fully rolled out soon. If they're successful, look for them to emerge in the Asian markets, where they've already targeted bettors and where mobile devices are the medium of choice.

Peter Dean, chairman of Gambling Board of Great Britain, was on hand to discuss the status of England's new gambling law. A pre-legislative report could come by April 2004, followed by the introduction of the act later in the year and implementation in 2005. He, of course, gave no guarantees.

And yet another general observation. . . Apparently everyone is a winner in the Gambelli case. Observers on all sides of the issue are claiming that last week's ruling bodes well for them. The ruling was supposed to bring clarity to European law on Internet gambling, but it has brought more confusion. Thus the true winners, in my mind, are the gaming attorneys, who will have plenty of work on their hands. "If we thought the Gambelli decision was the end of the story, it isn't." Tony Coles of Jeffrey Green Russell said at the close of the conference. "It's clearly the beginning."

Believe it or not, the Gambelli ruling is not the big I-gaming story in the Italian press. Gaming lawyer Quirino Mancini said the headlines are focusing on "Operation Blackjack," an investigation of the operators of more than 100 Italian gaming sites. Mancini suggested that the investigation, which became public Nov. 6, could have been part of a larger investigation into organized crime and pointed out that the real issue is advertising, not gambling. Prosecuting the defendants on gambling charges, he said, could be a long shot. "It won't be easy to sustain (criminal, gambling-related) charges in court," he explained.

And finally . . . Last week I reported that things were awfully quiet in the Netherlands courts in relation to Dutch gaming operators' efforts to block foreign competition. Don't count on it staying that way. I'm hearing from a few anonymous sources that we'll see more activity soon. Don't be surprised if there are some interesting twists and turns in this one.

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.