U.K. unveils plans to regulate online gaming

/ Source: Reuters

Britain unveiled plans on Tuesday to regulate Internet gambling and said it opposed the U.S. government’s banning of the industry.

However, sports minister Richard Caborn told a news conference that the government would not protect UK online gaming executives from extradition requests if they took Internet bets from countries in which they were illegal.

“People have to abide by the laws of particular countries,” he said. “We will not acknowledge people who operate illegally.”

Caborn was speaking at Ascot racecourse west of London at a summit of 32 international delegates, which aims to agree a framework of regulation to protect consumers, prevent underage gambling and gambling addiction.

The United States declined to attend, having effectively banned online gaming at the end of September in a move that wiped billions of pounds off the share prices of Internet gaming companies such as PartyGaming and 888.

Prior to passing the new legislation, U.S. authorities had arrested gaming executives from two UK-listed online gaming companies — David Carruthers from BETonSPORTS and Peter Dicks from Sportingbet — during visits to the country.

Culture Secretary Tessa Jowell said Britain opposed the U.S. ban, which risked driving the industry into criminal hands.

“We do not support the approach the United States has taken,” she said at the summit.

“The enormous risk of prohibition is that it forces the industry underground,” she said, likening the move to the U.S. ban on alcohol sales in the 1920s.

Caborn said Britain was sympathetic to a complaint made by Antigua to the World Trade Organization (WTO) over the U.S. ban, but he stopped short of saying Britain would support the complaint that the U.S. was acting in a protectionist manner.

“It will be a landmark decision ... We sympathize in the sense we want the WTO to clear up this area,” Caborn said. “Antigua has made it very clear it welcomes the support of the EU in this. We will find out the WTO’s position in 2007.”

Caborn said online gaming firms were willing to back initiatives proposed by the government, which include having a “social responsibility” clause written into contracts.

“This morning the vast majority indicated they would sign up. There was no dissention at all on the direction of travel politically.”

According to government figures, Europe’s regular gamblers stake nearly $6.7 billion (3.5 billion pounds) a year, an average of 1,000 pounds each. The worldwide Internet gambling market is put at more than $30 billion.