Online gambling firms prospering in US market


RIP Brian
Feb 22, 2001

With American online gamblers determined to keep playing, new opportunities are emerging for enterprising companies

The still evolving business situation in the United States following the enactment of the Unlawful Internet Gambling Enforcement Act last October was examined by the Evening Standard this week.

The advent of the UIGEA, which seeks to disrupt financial channels between US players and online gambling sites saw many large public companies exit the key US market, and companies who dispute the claim that online gambling is an illegal activity and have continued to operate in this lucrative sector have been enjoying growing success, which the newspaper describes as a "bonanza".

" [the UIGEA] has been a godsend to unquoted offshore companies such as Calvin Ayre's Bodog which have sucked in all the extra business," the author of the report writes. "The shift has been particularly lucrative for sites that offer online poker, which is predominantly American."

Industry experts told the reporter that a flurry of sporting results favourable to the bookies have also helped online sportsbetting groups.

Companies are taking advantage of a 270-day legislative 'window' granted by the US federal authorities to the banks and credit card companies, which have to find a way of stopping the flow of cash from customers to betting sites, but will not be penalised if this is found to be an impossible task.

Of the five currently top poker sites, four are unquoted companies operating from offshore tax havens, according to consultants Global Betting and Gaming Consultancy. And companies that track visits to websites have found that traffic has increased sharply for many online gambling sites over the past three months despite the financial transactions ban.

GBGC says the leading poker companies are now Poker Stars, Full Contact Poker, Bodog, Ultimate Bet and PKR. The first four are all unquoted companies and only PKR eschews revenues from the US.

Alexa, which monitors internet use, says Poker Stars' traffic rank - a measure-combining page hits and users - has risen by 2222 to 6905 over the past three months and Bodog by 1984 to 4177 while Paradise Poker [a Sportingbet subsidiary that exited the US market] for example, has fallen by 6574 to 27 529.

Avigur Zmora, chief executive of gambling software developer Playtech, is quoted as revealing: "There are are lots of revenues coming from the US. People are making good money today. Currently it is illegal for operators, but everyone is taking the risk and no one is doing anything to stop it."

Warwick Bartlett, chairman of the Association of British Bookmakers and founder of Midlands-based GBGC, which provides economic research into all areas of gambling, said: "Online casino gambling has not been so strongly affected by the legislation. It was one of the first internet gambling offerings so companies have built a substantial customer base outside the US.

"With poker it's a different story. There is a great deal of consolidation taking place which would not have happened without the legislation - 888 talking to Ladbrokes and Party Gaming buying Empire Online and InterContinental, for instance.

"Companies such as Poker Stars don't have to get involved in that so they are busy mopping up all the business from the US along with Bodog."

John Shepherd, communications director of Party Gaming, which was hit hard by the UIEGA, said: 'It was absolutely clear in our minds that we had to withdraw from the US, but the law is illogical, inconsistent and ill-conceived and the fact that other sites are still operating in the US is no surprise.

"It is very difficult to get real clarity because the number of private companies far outweighs the number of listed companies."
Although I have never taken Alexa to seriously it does give an indication that there is movement by webmasters and some internet users. A very nice article!

cool article, keep supporting poker, if I can play poker at my friends house, how can't I at the internet???, it's absurd!!!!, don't you think?

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