South Koreans' Credit Card Use Banned for Gambling Services
South Korea's Financial Supervisory Service (FSS) announced that South Korean citizens are now prohibited from using credit cards at foreign casinos. Gambling is illegal in the country (except at one licensed casino), and FSS director Park Chang-sup says citizens are expected to uphold the same no-tolerance policy even when they go abroad. The settling of credit card debts acquired by Internet gambling is also banned.
Enforcement and Opportunity in China
Following the revelation in January that state officials had spent about US$94 billion worth of public and private funds on foreign casinos and online gaming sites in 2004, the Chinese government has taken an aggressive approach to enforcing its gambling prohibition. It's estimated that a thorough investigative sweep had resulted in 4,000 arrests for cross-border gambling violations by February. Seven hundred sixty of those individuals were apprehended for allegedly participating in 249 different Internet gambling operations. Meanwhile, the Banking Regulatory Commission has asked the country's banks and financial institutions to monitor accounts more closely to crack down on gambling, and the General Administration of Industry and Commerce has ordered its local branches to forbid overseas gambling from opening offices in China, urging them to especially monitor online activities to eradicate online gambling.
A deputy in the National People's Congress, the country's top legislature, has presented a stand-alone bill that would explicitly prohibit government officials and executives of state-owned enterprises from gambling and impose heavier penalties for violators. The deputy's bill has met opposition from the Ministry of Public Security, which would prefer instead to revise the existing criminal code to make it more effective. An amendment to the code could provide more serious punishments for offenders and also expand its reach to include gambling done via the Internet or outside the mainland.
Despite the actions taken by the government, there are other activities taking place in China that could increase the amount of online gambling in the country. Mobile phone network operator China Unicom has formed a joint venture with South Korean mobile Internet service provider Solvix Technology that would create among other things an online lottery service in early 2006. Also, Isle of Man-based Internet-payment services provider NETeller has acquired a Macau-based debit card payment processing firm called Quick Access. The company is the operator of 1Pay, an online payment transaction system that serves a large number of online gambling operators targeting the Chinese market. Although 1Pay has reportedly stopped accepting new customers due to the government's aggressive assault on gambling, it is still facilitating transactions.
Queensland Premier Peter Beattie has confirmed that the Daubney-Rafter Inquiry into corruption in Queensland's horse racing industry will continue for another three months. The inquiry began on Feb. 6 and was planned to last only until the end of March. Beattie also stated that it would eventually end up costing tax payers more than A$3 million.
New Zealand's Comprehensive Strategy
The New Zealand government is hailing its new "Strategic Plan for Preventing and Minimizing Gambling Harm" the world's first comprehensive approach to gambling-related health issues. The NZ$54 million three-year program aims to raise public awareness of gambling risks, boost problem gambling treatment services and provide information to communities. Funding for the program will come from a new gaming levy on casinos, gaming machines, the TAB and Lotto that was introduced last September.
The New Zealand Lotteries Commission has selected GTECH Holdings Corporation as the lead bidder to begin negotiations for a complete lottery system conversion that would include a new integrated online and instant lottery system as well as new terminals. Trevor Hall, CEO of the Lotteries Commission stated, "Our new system will replace our centralized gaming system. A new gaming system is required to ensure NZ Lotteries products can continue to be sold through our retail network after the conversion of the organization's telecommunications data links to the Internet Protocol standard. An added feature will be the ability to offer games remotely, but this will only be done after strict guidelines have been developed and agreed to with government regulators. Some of the measures we will be working through with the regulators will be safe-guards such as compulsory player registration, strictly enforced age restrictions and limits on the number and/or value of any online purchase by a registered player in any given time."
EC Orders Gambling Analysis as First Step toward Harmonization
The E.U. Commission has chosen the Swiss Institute of Comparative Law to perform an analysis of the gambling laws of each of Europe's member states. The analysis will survey the various gambling regulatory structures and economies and also project market changes for the next six years. A preliminary report is due in June, and the final report is due in November.
Jersey Gives Green Light to I-gaming Regulation
Lawmakers on the island of Jersey (a U.K. dependency) have voted to draft legislation to permit online gambling. Plans to establish a casino and commercial bingo were rejected.
Gibraltar's Tax Exempt Status in Jeopardy
At the request of the European Commission, the United Kingdom has agreed to abolish the Exempt Company Tax Regime of its dependency Gibraltar by the year 2010. Under the Exempt Company Tax scheme, I-gaming operators licensed on the island have enjoyed a 0.0 percent income tax rate. They instead pay a fixed annual tax of between £225 and £300. But last month the EC threatened the United Kingdom with court action because it suspected Gibraltar's tax scheme was a form of illegal subsidy that impeded competition and violated E.C. Treaty rules. Gibraltar's government will likely introduce a new tax rate for corporations while phasing the exception out completely by 2010.
Swedish Newspapers Charged With Ad Violations
Swedish radio station Ekot reported that the editors-in-chief of three different newspapers have been charged by Sweden's National Gaming Board with breaking gaming legislation because they published advertisements for Expekt, Unibet and Ladbrokes in 2003 and 2004
Swedish newspapers Dagens Nyheter and Svenska Dagbladet have reported that Sweden's Lottery Inspection Authority (LIA) might begin investigating whether any online poker companies that are registered abroad are operating from within the country. According to LIA spokesperson Jessica Jeppsson, "We are debating whether we should report tip-offs and our own discoveries to the police." Svenska Spel, the state-run gaming operator, is the only company authorized to operate gambling games in Sweden. At the end of February, Svenska Spel applied to the government for a license to offer poker games online.
UK Operators Adopt Mobile Content Ratings System
England's Independent Mobile Classification Body (IMCB) has published its rating system for adult content. The rules classify eight categories of adult content that will be restricted to mobile users under the age of 18 through age verification processes put in place by each of the mobile phone operators. Gambling services do not fall under the scope of the classification system because they are already age-restricted by U.K. legislation. However, content that encourages or promotes gambling or other activities that are restricted to those under the age of 18 will be labeled as adult-only. Such content falls under the first category of adult-rated content, which deals with adult-only themes. The other categories are repetitive foul language, sex, nudity, violence, drugs, horror and imitable techniques (or detailed descriptions or illustrations of techniques that could be used in a criminal offense). The system does not apply to general Internet content, but in cases where the Internet is accessible via mobile phone, the operators can implement filters for protection. The IMCB is a subsidiary of the Independent Committee for the Supervision of Standards of Telephone Information Services (ICSTIS), which was appointed by mobile phone operators to oversee the self-classification of new forms of commercial content on mobile phones.
WTO Ruling Expected Soon
The World Trade Organization's Appellate Body evaluating Antigua and Barbuda's case against the United States stated on March 8 that it had not completed its report by the end of the 60-day deadline and, therefore, requested more time to reveal its decision. The report is now expected no later than April 7. . . . Following an intervention by Antigua and Barbuda Prime Minister Baldwin Spencer at 16th inter-sessional summit of the Caribbean Community (Caricom), Caribbean leaders have a resolution to support Antigua and Barbuda in its Internet gaming services dispute with the U.S. at the World Trade Organization. The Caricom resolution regards the dispute as a pioneering one that has been instructive on how small nations can defend their rights in the WTO. . . . The U.S. State Department's Bureau for International Narcotics and Law Enforcement Affairs concluded in its 2005 International Narcotics Control Strategy Report that Antigua and Barbuda is very susceptible to money laundering activity. The report states: "Antigua and Barbuda has comprehensive legislation in place to regulate its financial sector, but it remains susceptible to money laundering because of its loosely regulated offshore financial sectors and its Internet gaming industry. Money laundering in the region is related to both narcotics and fraud schemes, as well as to other crimes, but money laundering appears to occur more often in the offshore sector than in the domestic financial sector."
US State Legislators Want to Harness I-Gaming
In North Dakota, a bill that would make the state a licensing jurisdiction for Internet poker operations has passed through the House and now awaits a vote before the Senate. As expected, the U.S. Department of Justice responded by issuing a letter stating that it believes Internet gambling violates the federal Wire Act. Legal experts insist the DOJ is wrong because the Wire Act applies only to sports betting. At the moment both Illinois and Georgia have laws passing through their legislatures that would allow their state lotteries to make their games available for purchase over the Internet.