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****Canada Holds the Online Gambling Aces
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OTTAWA, ONTARIO, CANADA, 1999 FEB 25 (NB) -- By Martin Stone, Newsbytes. The booming online gaming industry has found a comfortable and winning seat in Canada, which is quickly emerging as the world's virtual gambling capital.
Many of the world's leading gaming firms are Canadian-based despite, or because of, an uncertain legal interpretation of the country's gambling laws.
By basing servers and bank transfers offshore, Canadian casino Web-site operators are enjoying the fruits of their trade while steering clear of potential legal complications.
The industry, which presently lists 280 casino Web sites and is growing at a rate of 10 new sites per month, will generate between $5 billion and $20 billion by the year 2000, observers say.
Some Canadian politicians, like Liberal Member of Parliament Dennis Mills, are working to fully legalize the industry and thereby keep the revenues at home, rather than see much of the profit realized by banks and Internet service providers in Gibraltar, Antigua, St. Kitts, Dominica, Costa Rica and elsewhere.
Mills introduced a bill in 1997 to legalize online gambling in Canada in an effort to stem the flow of cash to other countries. Canadian law stipulates that only provinces and some charities can operate gaming establishments, but virtual gambling remains an uncertainty.
Dianne Scharf, assistant to Mills, told Newsbytes today that the Mills bill "looked at bringing in some guidelines and some control because we realized that Canada is sort of a haven for this, and there's nothing at present."
She quotes Mills as saying, "Casino gambling on the Internet is currently accessible in Canada. While gambling on Internet casinos does not appear to be prohibited, it appears that an individual or group setting up an Internet casino in Canada would be in contravention of the criminal code. With gambling on the Internet now a reality, it is possible that some of this money will start going out of the country. One of the ways to stop this flow of money from leaving Canada is to set up Canadian Internet casinos."
Scharf adds that the Canadian criminal code allows for an amendment that would legalize the industry, but no further action has been taken By the government.
Many Caribbean, Central American and other emerging nations are actively luring Canadian operators with tax incentives, licenses, and an asset important to some in the industry, anonymity.
Meanwhile, taking advantage of the vague legal definitions, the online game industry is looking at some lucrative antes. "We are doing very well at it in Canada," says Alan Sneider, Canadian director of the Interactive Gaming Council, a 50-member industry association that is seriously considering moving its U.S. headquarters to Vancouver, the city that will host an online gambling expo and convention this summer.
At the same time, Canadian firms are licensing games globally to online operators, and Canada has gained recognition as a world leader in the development of online-gaming software and the technology behind the electronic cash used in virtual betting.
As a result, Canada now boasts the world's largest listing of publicly traded Internet-gambling companies, estimated at 15 and growing.
Toronto-based CryptoLogic dominates the global industry, supplying casino games and electronic commerce to online operators. The company has licensed 12 gaming operators around the world.
"We are, in effect, suppliers the same way the slot-machine manufacturer is a supplier of Las Vegas," explains CryptoLogic director of business development, Barry Shafran.
A recent Forbes magazine study called Vancouver-based Starnet, a gaming software developer and operator of online casinos, lotteries and live horse races, the "Microsoft of casino-software vendors."
Go-Call of Cambridge, Ontario offers blackjack, craps, roulette and slot machines through servers operated by subsidiaries in Antigua and Dominica. The company announced record revenues of $2.1 million for the month ended January, calling it an increase of more than 100 percent from the month previous.
Most of the wagering transactions are conducted through banks outside of Canada. "They're based offshore to protect themselves," says analyst Sebastian Sinclair. "If they were operated here, someone would find some type of law to prosecute them. But if they're offshore, they can't be prosecuted."
Reported By Newsbytes News Network, newsbytes.com
15:24 CST Reposted 15:31 CST
(19990225/MEDIA CONTACT: Dennis Mills - 613-992-7771 /WIRES ONLINE, LEGAL, BUSINESS/)
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