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Public companies good for online gambling?

Discussion in 'Casino Industry Discussion' started by jetset, Nov 15, 2006.

    Nov 15, 2006
  1. jetset

    jetset Ueber Meister CAG

    Senior Partner, InfoPowa News Service

    Specialist says more transparency benefits the industry

    In an interview with the publication WWMT this week Professor Bill Eadington of the Institute for the Study of Gambling and Commercial Gaming says that the publicly traded companies from the UK have become very significant players in the business and this has increased integrity and trust levels in the industry in general.

    WWMT points out that growth estimates on Internet gambling tend to be conservative, since nobody really knows how many sites are out there, how many new ones open each week across the globe, or possibly each day. Analysts are often not even sure how many people are playing, since many sites don't release statistics on players, or even money earned.

    Professor Bill Eadington can make an educated estimate, however. Eadington uses Party Gaming as an example of the potential of online gaming public companies, commenting that when the company went public over a year ago its value was estimated around $10-billion.

    "That's the same size as Harrahs or MGM - two major American companies," Eadington said adding that Party Gaming [prior to the recent clampdown through the Unlawful Internet Gambling Enforcement Act] earned $1.5 billion primarily from internet poker - 75 percent of its business originating in the United States.

    Eadington is quick to note that many countries have decided to legalise, regulate and tax online gambling sites. He says the goal is to legitimise the business and make money from it, and "....a lot of publicly traded companies from the UK have become very significant players in the game. What this has done is increase integrity levels, the trust in the game. Sites have benefited from becoming a legal regulated industry. There have been a number of publicly traded companies in the UK, Gibraltar or Malta who have a level of confidence with players especially around internet poker and sports wagering."

    Ten years ago Internet gambling sites were often viewed as shady operations, comments WWMT. Players never really knew if the games were legitimate, who was really running the site and whether they'd even get paid.

    Now with major sites running as businesses listed on Stock Exchanges around the world, many gamblers see them as trustworthy.

    But online gambling may be in jeopardy in the United States, WWMT reports, referring to the recent passage of the Unlawful Internet Gambling Enforcement Act, which seeks to disrupt financial transactions between US player and online gambling sites.

    Professor Eadington says this law may be unenforceable since almost all of the online gambling industry is located overseas, and outside U.S. jurisdiction.

    "It's very reminiscent of prohibition in the 1920s. The law is going to work in the sense it's become much more inconvenient for customers to get money into online wagering games. What the real challenge is, is a lot of subterfuge to get around the law for example establishing bank accounts in Canada or the UK or entities abroad that will facilitate."

    Eadington says the law may not signal the demise of online gambling in the USA. "Ultimately we will see legal internet gambling. And part of it is just consumer demand, and what technology brings us."

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