Case Study
In April 2005, a 25 year old from Brechin used the computer at his family home to access internet gambling sites while his parents were away. Using their credit cards he created 13 accounts by typing in the numbers which he had got from his parents' bank statements. He won £90,000 in the first hour, but continued to bet and started losing money. In a desperate attempt to recover, he kept gambling, not only losing his winnings, but ending up £68,000 in debt. When he realised the extent of his gambling he took about 170 painkillers and cut his wrists.
Internet gambling is, essentially, using the internet to place bets, through credit, on casino games, sports games, or whatever the particular “casino” offers. Wins or losses are paid or collected accordingly. Until recently it was thought that about one million people in Britain gambled regularly online, (representing about a third of the 3.3m across the whole of Europe), but more recent estimates have suggested that the UK figure could be as high as 3.8m. In Autumn 2005, GamCare, (a UK organisation which works for the provision of proper care for those who have been harmed by gambling dependency), reported the existence of 1,700 gambling websites in addition to interactive television channels and mobile phones offering gambling services. GamCare says that the average online gambling debt in 2004 was £25,676, an increase of £5,000 from the previous year.
In April 2006, online gaming site Partygaming saw its first quarter revenues rise by 54% to £193.6m following a record number of people signing up to play poker online. The number of the group’s poker players leapt by over 20% to 263,254, of which 39% were from outside the USA. Anyone using the Internet will find themselves being offered enticements to visit internet gaming sites, including starting “kitties”. The UK is seen as a hub for on-line betting. Ladbrokes has 13 foreign-language websites and William Hill has online clients in 197 countries.
Internet gambling has a number of features which make it particularly dangerous for those with a tendency to problem, or addictive, gambling. It is essentially a private activity, rather than a social one; it promotes repetitive and continuous play; it is highly available and accessible and there is relatively low public awareness of the dangers. Devoid of the traditional stigma associated with betting shops, it is perhaps not surprising that women represent an increasingly large part of the online gambling market, accounting for 30% of visits to UK sites during the World Cup.
Paradoxically, it is easier to attach safety features to online gambling than any other form of gaming. Self checking can be made easily available; patterns of play can be monitored and codes of practice enforced. However, this can only be enforced on those companies which choose to submit to regulation; and therein lies one of the most serious problems, since the particular challenge posed by the internet lies in its disrespect for territorial boundaries. The Gambling Commission cannot regulate off-shore or overseas companies, and it is very difficult to see how any real protection from these can be afforded to those who are not able or willing to protect themselves.
In the USA, Congress passed legislation which makes it illegal for banks to process online gambling transactions in an attempt to stop the money flow from this form of gambling. However, the legislation has been likened to the alcohol prohibition of the 1920s. It does not prevent Americans from gambling online, so they are still free to search for potential websites. It only prevents the companies from making credit card transactions with US citizens. The likelihood is that it will be the more "legitimate" online companies who "play by the rules" that will exit the market, while other companies will operate and thrive in the underground economy. New companies will enter the market using techniques to get around the legislation.
The UK Government is seeking international agreement on the regulation of e-gambling which would secure agreement to shared regulatory principles. However, given the potential sums to be made, some companies will always be reluctant to operate under tight regulatory structures. It seems reasonable to expect these sites to remain a persistent and pernicious feature of the online landscape.
From 2007 the UK is to be the first major country to offer online gaming licences. The Gambling Commission’s licensing and regulation of UK operators must be effective in fulfilling its three objectives. Given the enhanced protection that this is capable of offering in comparison with unregulated, off-shore sites, it is not unreasonable for the Government to encourage existing online poker and casino operators to relocate to the UK and thereby to come under the Commission’s sway. However, the Government’s motives appear at best muddled; the Council deplores the terms of the aspiration articulated by Richard Caborn, Minister in the Department of Culture, Media and Sport in a memorandum to Mark Davies, Managing Director of Betfair (quoted in the Observer 27 January 2007) that, “Britain should become a world leader in the field of online gambling.” In reality, the UK tax regime is likely to be the determining factor in whether operators decide to relocate their business to this country: current wisdom suggests that the Chancellor would either have to tax the sites like any other gambling company - which would attract very few to the UK - or offer tax breaks.
A significant “carrot” in the Commission’s gift is the regulation of advertising (and the “stick”, a UK media advertising ban on offshore sites). However, the position in relation to the internet is not clear; and in any case the ban cannot be enforced in the European Economic Area, which includes offshore havens Gibraltar and Malta.
Bookmark this on Delicious
Posts
No comments:
Post a Comment