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  Tuesday, January 22, 2008

  Regulation in Asia - A Waiting Game

by Lorien Pilling

As the I-gaming industry prepares to gather in Macau for the AiG Congress 2008, the topic of regulation for the industry in the Asia-Pacific region will again be at the forefront of discussion over the three days.

Indeed, it was at this conference last year that the Macau Gaming Commission chose to announce proposals to regulate remote gaming in the former Portuguese colony. Twelve months on, it will be interesting to see if details of subsequent developments are forthcoming.

But, as anyone who has followed the process of getting the United Kingdom's new Gambling Act first onto the statute books (April 2005) and then actually into operation (September 2007) will be all too aware, developing good -- or even mediocre -- gambling regulation is a complex undertaking. It is all too easily slowed by vested interests and the winds of the political climate.

The U.K. government, however, had at least acknowledged that its existing legislation was no longer able to cope with the technological advances within gambling and the emergence of the I-gaming sector, with its implications for cross-border provision of services.

In stark contrast, many jurisdictions around the world, especially in Asia, have failed to address the issue of remote gambling. Instead, they simply point to their existing gambling legislation. This legislation, whilst often very clear that gambling is prohibited, is just too outdated to deal with the specific issues thrown up by remote operations.

The current Betting Act in Singapore, for example, prohibits what it calls "common betting-houses." A common betting-house is defined, amongst other things, as: "any place kept or used for habitual betting or wagering on any such event or contingency as aforesaid, whether the public has, or may have, access thereto or not."

The reference to whether the public have access or not would seem, therefore, to suggest that a private individual placing bets with an online sportsbook in their own home counts as a common betting-house.

The use of the phrase "habitual betting," however, throws some doubt on the matter. If it came to court, lawyers could argue for weeks as to the exact point when "infrequent" betting crosses the line into "habitual" betting.

Similar ambiguity is also found in India’s gambling laws. The Public Gambling Act of 1867 still forms the basis of the country’s gambling legislation, introduced before the telephone was in use, let alone the Internet.

The essence of the act is the prohibition of gambling in public places for profit, which again fails to address the private use of an I-gaming site that is regulated in another jurisdiction.

Within the European Union, the provision of gambling services across members’ physical borders using the Internet has been the source of long-running arguments and legal challenges between gambling operators and various governments.

This same issue arose some five years ago when Sportingbet started trying to attract customers in Taiwan. Following a "raid" by the authorities on the company’s partners in the country in 2003, Sportingbet’s founder, Mark Blandford, defended his firm by stating:

“We will be supplying the Taiwanese market from the United Kingdom, from our operations in London. Customers have to send money and open an account in the United Kingdom to do business. So, there is no aspect of gambling in Taiwan . . . Sportingbet is not setting up an office in Taiwan because this would be illegal [see footnote 1. -Ed.]."
Source: Taipei Times, 18 February 2003

Blandford also hoped at the time that the Internet would "cause the rules for gambling to change and challenge government monopolies on gambling."

But in the intervening years little obvious progress has been made on remote gambling regulation. At the start of 2008, only the Cagayan Economic Zone of the Philippines might be classed as a major issuer of interactive gambling licences in the Asian region (38 licences issued, about 50 percent operational) [see footnote 2. -Ed.].

Vietnam -- which joined the World Trade Organisation in 2007 -- however, might offer some hope to I-gaming operators. For a few years now, there have been reports claiming that the government was looking to regulate gambling, particularly football betting. The latest such report came in January 2008, which suggested proposals were being drawn up that would create legislation to permit certain gambling activities. In addition, the government would also be able to increase its tax revenues from gambling.

Whilst consumers in certain Asian countries are amongst some of the world’s most avid users of the Internet, it is not surprising that related legislation lags someway behind the pace of technological change. But, after recent experiences elsewhere, I-gaming firms would surely welcome greater regulatory certainty in the Asian region before fully committing themselves.

Notes

  • (1) From Taipei Times, Feb. 18, 2003.

  • (2) In the wider Asia-Pacific region, Australia’s Northern Territory offers remote gambling licences; Tasmania has granted an operating license to betting exchange Betfair; and Papua New Guinea passed a bill legalising online casinos in May 2007.

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About the Author
Lorien is a research analyst with Global Betting and Gaming Consultants, and currently resides on the Isle of Man. Prior to this, he spent three years at a leading United Kingdom gambling firm, providing regulatory and market research for its various international e-gaming ventures.

 

More Articles by Lorien Pilling

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