The Swiss government announced it is considering licensing Internet gambling sites. Like many countries, Switzerland is concerned with unregulated online casinos which are growing in popularity, but pay no taxes and represent potential dangers to consumers.
The Swiss response, apparently, will be to license an as-yet-undetermined number of online gaming sites, while cracking down on the black market operators that persist in doing business with Swiss citizens. The Swiss Ministry of Justice says it will craft a proposal licensing legal online gambling sites.
Economists predict proper regulation of Internet gambling could bring in as much as $22 million annually for the small Alpine country.
Swiss legislators say they want to continue to keep gambling using telephones or interactive television illegal. Online lotteries and Internet sports betting are already legal in Switzerland.
OCA gaming analyst Sherman Bradley says,"It makes sense for Switzerland to control its burgeoning online gaming industry with licensing and regulation. The Swiss are too logical a people to follow the prohibition mistakes that have failed in other countries."
In a significant victory, the European Commission has persuaded Denmark to end its state monopoly and open its borders to foreign Internet casinos. The Copenhagen Post is reporting that the Danish government will announce deregulation this week, submitting to pressure from the EU to comply with open trade in services including online gambling.
Danske Spil, the national gaming organization that has monopolized gambling in Denmark for sixty years, will lose its exclusive rights in all areas except lottery and scratch-off games, the article said.
With the opening of the market, outside gaming operators will be able to advertise and legally conduct gambling operations. Licenses will be sold to acquire legal status, and Internet gambling sites will be required to take precautions against problem gambling.
European gaming observer Horst Knutsson says,"The Danish opening shows that the EC can get countries to comply. We can expect to see more EU member nations honoring their commitments to free and open trade, and revenues previously being lost to unregulated online casinos will now help national treasuries."
The national Danish expenditure last year on gambling approached $2 billion dollars. The country's take of that was almost $500 million.
Belgium has decided to comply with EU free trade rules and permit online gambling to compete with the country's licensed land-based gaming industry. But the new Belgian regulations are so strict, an EC ruling in favor of the new online casino rules is hardly a sure thing.
Legislation proposed to legalize Internet gambling in Belgium has been prepared by the country's gambling minister, Carl Devlies, and advanced to the EC and Belgium's judicial review branch.
The suggested regulations would legalize online casinos, but would place strict requirements on licensing. Perhaps the most significant stumbling block is a rule that all licensees have a permit for casino gambling, slot machine operation, or bookmaking in Belgium.
“This close link between online and offline licences presents quite a problem with regards EU law, and also in terms of market realities in the gambling sector,” said Brussels attorney Perrine Pelletier to Gambling Compliance. "We question whether the requirement to have a physical presence in Belgium constitutes a restriction on the freedom of establishment guaranteed by European law.”
Each land-based license would only allow the holder to offer similar Internet services. The Proposal states, "...a casino operator in possession of a supplementary licence would be able to offer only casino games via the Internet and not, for example, sports betting.”
Foreign online gambling operators without licenses would be blacklisted, and attempts at setting up blocks through Internet service providers would be made, despite the failure of such moves in the US, Australia, and elsewhere..
Australia continues to struggle to find a workable and responsible method for addressing online casino operations. After failing to find a prohibitory means for blocking Internet gambling, the country's Productivity Commission is considering turning to licensing and regulation, a plan strongly advanced by online casino operator Betfair.
Australia passed its Interactive Gambling Act in 2001, establishing a ban on Internet casinos and poker rooms. But, as has been the case worldwide, the block has proved unenforceable.
Australian leaders began working toward a plan to censor the Internet to prevent the reception of "unwanted content," such as online gaming and pornography. But the plan imploded, rejected by Internet providers, civil liberty guardians, and even anti-gambling crusader Senator Nick Xenophon.
Betfair is urging that the commission recommend a regulating framework for licensed online gambling sites, saying that over $300 million leaves the country untaxed each year under current law.
"Furthermore, players are gambling in a largely unregulated environment, with little protection offered to players in terms of fraud, security or harm minimization. The ban on offering interactive gaming to Australians has had very little effect on curtailing the enormous growth of that sector of the market in Australia," says Betfair's submission to the commission, noting the unsolved problem of protecting the public.
Betfair also made remark on Australia's allowing of online sports gambling, which forbids in-play wagering. The company asserts there is no increased danger from betting during a match, but not permitting it sends the revenue elsewhere.
An expert in Internet gambling law says he doesn't see much hope for Barney Frank's repeal of the UIGEA passing. Pat O'Brien, of the firm Greenberg Traurig, thinks the odds against Frank's online casino measure make it a long shot to pass Congress.
O'Brien addressed the International Masters of Gaming Law Spring Conference in Windsor, Canada, yesterday. He asserted that state regulation and legalization of online gambling will probably precede any federal changes.
“I see [legalization of online gaming] happening state-by-state, with one or two states then getting together and saying let’s share poker players and let’s share lottery players,” O'Brien told the gathered gambling observers.
O'Brien says state lotteries will continue to expand products, with each state deciding what Internet action to allow inside its borders.
“What already exists offline is what will be allowed to exist online. If people currently offshore think that they’re going to come onshore then they’re dreaming,” said the gaming lawyer.
O'Brien did not address the issues of UIGEA interference in state transactions, as is occurring with the New Hampshire and North Dakota lotteries, or of the EU complaint against protectionist US policies.
