From egamingstocks.com
<<Uncertainty about the U.S. banning of online gaming is another major
concern that keeps investors at arm's length. Last week, the House Judiciary
Committee voted 21-8 to send the legislation to the full House. The measure
would make most online betting illegal. It would impose a fine equal to the
value of the bet or $20,000, whichever is greater, and a maximum four-year
prison sentence. This is on the heels of the passage of the infamous Kyl
Bill sponsored by Senator John Kyl (R-AZ), which passed the Senate last fall.
On the surface, this looks quite discouraging to any investor having any
thoughts about putting their money into this industry. Certainly, concerns
are warranted, however, let us take a deeper look at what is actually
happening here.
Under the language of the House legislation, the bill seeks to ban online
casinos, as opposed to online gambling. Furthermore, the prohibition seeks to
ban online gaming establishments in the U.S., but does not and cannot ban
their establishment outside of U.S. borders. Currently, the overwhelming
majority of online casinos are NOT housed in the U.S., but are located in
foreign jurisdictions such as Antiqua, Australia and other countries and
states that license eGaming. The previous version of the bill sought to
penalize gamblers with criminal prosecution, as well as hold Internet Service
Providers liable for policing their hosted sites that promote or handle any
gaming activity. This is not so under the recent House bill. What's more,
fantasy league sports betting, pari-mutuel and state lotteries are not
affected by this law. It is a bill as useless and as futile as 1920's
Prohibition in that it is basically unenforceable. Last year, upon review of
the Kyl Bill, the Justice Department stated that the provisions of the bill
were unenforceable and that they did not think it wise to legislate in such a
way concerning a medium as new and as far reaching as the Internet.
Provisions of the Kyl Bill were seen as a threat to the development of the
Internet.
So, what does the law mean? It means that the eGaming companies will continue
to operate as they are, namely, outside of U.S. jurisdiction. They are out
of the reach of U.S. law. Furthermore, since the new bill takes the liability
off of the ISP's to police their sites, online wagering will continue to
grow- even with new people placing wagers from the U.S. It is the height of
fallacious thinking to assume that anything related to the Internet will not
grow. It is even further absurdity to think that the U.S. ban will effect an
industry that is becoming worldwide. What will happen is that growth will be
slowed and U.S. companies will lose out on the revenues. But if the money
cannot come to them, they will go to where the money is. So, the potential
market for eGaming may be stifled in the short term, but its current revenues
will grow as other countries license and regulate it.
Rep. Bob Goodlatte (R-Va.), the chief sponsor of the U.S. House bill has
defended the legislation as a solid approach to "the serious and growing
problem of online gambling". I must respectfully disagree with Rep.
Goodlatte. This bill will do nothing to reduce the seriousness of
unregulated gaming. Regardless, eGaming will continue and the real threat
that will keep it a serious problem is that this seeks to negate the process
of regulation and only allows the unscrupulous gaming operators to continue
without detection. After all, the U.S. can do nothing to an off shore gaming
site- especially if the off shore company is licensed to accept wagers in its
jurisdiction. What is needed is regulation. This will protect the gamblers,
the investors and will benefit states and governments with an enormous source
of revenue.
What's the real issue here? The real issue is, in fact, regulation. Due to
the uncharted and untested waters of the Internet, too much money is at stake
and there is no way for the government to regulate it in a way to guarantee
its share of the revenue. There is no universal regulatory and
accountability method that can be relied upon by the government- whereby they
can get their share.
Organizations such as the Interactive Gaming Council (IGC) and others are an
enormous first step in an industry that is actually seeking to working
amicably with governments. The legitimate gaming operators, that comprise a
majority of the Internet Gaming companies, strongly desire to work with the
governments. It is in their best interest to do so. The issue at hand is
that the technology has surpassed the government's ability to regulate it.
This is obvious when we look at the differences between the Kyl bill and the
Goodlatte bill. When the Kyl bill was first drawn, it proposed a sweeping ban
across the board for almost all Internet wagering. Since then, more than a
year has passed since its birth. In that time, states and other gaming
mediums have grown to where they can harness the technology necessary to
assure a safe and regulated wagering process. Now, the legislation has caught
up with the technology and we find that lotteries, pari-mutuels and other
forms of wagering are excepted. It is this author's opinion that at the
current rate, a comprehensive regulatory technology will soon be at hand
allowing the government to switch its debate from prohibition to regulation.>> |
