RGA did not support anti-UIGEA bill

[jetset]

RGA DENIES SUPPORT FOR U.S. INITIATIVE TO AMEND THE UIGEA


UK trade association more interested in Europe, it appears


The US market for online gambling may be worth billions, but it is not worth fighting for seems to be the conclusion reached by the British trade association the Remote Gaming Association this week.

According to a report in E-Gaming Review, the Association has admitted that it refused to put its weight behind the moves this week by Congressman Barney Frank to put forward legislation to regulate online gaming in the United States.

EGR claims the refusal came despite meetings and discussions taking place in the months running up to this weeks announcement on the introduction of Frank's Internet Gambling Regulation and Enforcement Act of 2007.

Clive Hawkswood, chief executive at the RGA, told EGR that the organisation and its members were not interested in becoming heavily involved in the recent lobbying effort.

He added: That is for a mix of reasons. Some companies have never been involved in the US. Others meanwhile have left the US alone and are concentrating elsewhere. Some are worried about what their share price reaction would be.

The RGA represents the majority of major online operators in the UK.

Hawkswood was responding to accusations from sources close to the lobbying effort in the US that the RGA had failed to show any enthusiasm for this weeks moves. These guys have got to come to the table, said the source. There is a lot of upside here if they do.

However, Hawkswood suggested the suspicion was that any regulation would effectively be in favour of US casino operators. He added: Do we think our involvement could tip the scales? No. Look at it from the opposite angle. Did US involvement in the lobbying effort for the UK supercasino help at all? Or was it rather a hindrance?

A spokesperson at Ladbrokes said of the consensus against getting involved: Its a question of priorities and resources. There is movement in Europe at the moment, with the EU behind us, so that is what we are concentrating on.

Another spokesperson at a leading operator added: There may come a time to step on the gas once again in the US but that time is not now.

Perhaps it is this sort of negative approach that helped create the right climate for Senator Bill Frist to manouevre the UIGEA into being in the first place....

 

[tennis_balls]

are these companies paying any tax on revenues in Europe?

maybe they are afraid that if they back Frank's bill they would soon face similar taxes/licensing fees in there current areas of operation?

 

[jetset]

That's a thought with possibilities, I think.

Other than Ladbrokes the piece is not too specific on what companies are involved, but I would imagine that at least some of them are registered in European tax havens like the Isle of Man, Gibraltar, Alderney and Malta, with others elsewhere in the world where the tax bite is lighter than the UK.

And we don't know yet how tempting they have found Chancellor Brown's proposed 15 percent on online gambling operations moving into the UK in terms of the new gambling dispensation that kicks in this September.

Those tax havens are unlikely to risk losing the business from these large companies I would surmise, so the liklihood of them upping their tax ante is not high no matter what the US or UK does.

I would think that in the balance is the chance of getting a breakthrough in the massive US market and the long term rewards that could flow from that vs. the risk of the Frank bill failing, or more legal and tax complications and costs on the often confusing US scene.

The RGA guy also referred obliquely to the possibility of US companies being favoured, but I think that may be a tough one to sell if companies set up taxable corporations in America in compliance with any regulations for licensing - and this calibre of company will be quick to take action on any discrimination imo.

Going by the remarks made by Ladbrokes on the RGA decision, it seems to me almost as if they've just grown weary of the ambivalent political attitudes among US politicians and have given up on the US market, deciding instead to focus on the replacement possibilities in Europe and Asia. They may also be a little nervous about competing head on with giant American betting groups if Frank gets his way in the States.

I think that could be a short-sighted mistake, but then again this is just a reaction piece and not a business announcement of intent given after a considered look at all the possibilities. The reality in what these major groups do may be different.

Nevertheless, I think it's a great pity that this sort of defeatist and negative approach is being taken to an opportunity to actually try and do something about improving the situation in America. Maybe it was this sort of attitude that contributed toward an environment in which Frist and company were able to ram the UIGEA through last year.

 

[lojo]

The thought plickens.

 

[lots0]

I can't say as I blame the RGA for not getting involved. As a matter of fact I think the folks at the RGA were very polite, considering all the money their members lost. Not to mention, many US politicians have called their members terrorists and terrorist supporters... Who wants to get called names and be set up again to lose millions and millions and millions...

And I do believe that they are also correct in this respect, if this new regulation passes the companies outside the US are gonna have a very tough time doing business inside the US. You can lay odds (I'll give 2-1) that the regulations will be stacked against all non-US Online Casinos.

A lot of us saw this coming once the UIGEA had passed... Drive out all 'foreign' (non-USA) competition with the UGIEA then make it legal and heavily regulate online gambling, so the US ground Based Casinos can move into the Online Business in the US without having to compete with established non-US Online Casinos.

I have also stopped promoting the petition to repeal the UGIEA, because obviously the powers that be (Even Barney Frank) only want to set up the new law so only US companies are going to be able to compete in the US market. I am not the only person to stop supporting the petition... The petition went from gaining 100 signatures an hour to 100 signatures in the last 24 hours... and I expect that the petition to repeal the UIGEA will soon die of neglect.

I think if Frank had come out with a true repeal, he would have a lot more support from the non-US Online Casinos... And others like myself.

But now Barney Frank has the poker lobby, the ground based casinos lobby and the Banking lobby on his side and I think that is all he is gonna need to pass this regulation bill. With the added sweetener of more Taxes to collect and spend and adding more government control of the internet... I'll say for the record I think this bill is a "Slam Dunk"...

 

[jetset]

There are 6 billion, one dollar reasons (and more in the years ahead) for offshore groups to support the Frank Internet Gambling Regulation and Enforcement Act of 2007.

It will need both player and operator support to win through and introduce genuinely regulated online gambling in the United States, again giving US players their choice.

 

[dominique]

The bill leaves much to interpretation, and I am going to be supportive of it until proven otherwise.

I agree with Lotso's take here:

A lot of us saw this coming once the UIGEA had passed... Drive out all 'foreign' (non-USA) competition with the UGIEA then make it legal and heavily regulate online gambling, so the US ground Based Casinos can move into the Online Business in the US without having to compete with established non-US Online Casinos

That was the intention of UIGEA, I agree.

However, I am not convinced this new bill is going that direction. So far the qualifications for obtaining a licence look to be financial stability, safeguards against play by juveniles and anti money laundering measures.

No mention of exclusion of anyone. Excluding non-US companies would raise hell with the WTO again, and I think the WTO ruling will have some effect on having this bill become law.

Also, in the current version (and once interest rises you can bet there will be new versions) much power is given to the financial powers that be as far as implementation goes. I trust the banks to have more common sense than the DOJ.

Much has not yet been interpreted, and the bill is rather nonspecific and a lot of details will have to be worked out.

IMO it has potential, and I will be supportive. If and when legal opinions surface that point out huge problems, or it becomes obvious non-US firms will be excluded, I will revise my opinion.

 

[lots0]

Don't get me wrong, I will support Frank's Bill.

The petition was too Repeal the UIGEA, not to regulate online gambling. Lets be honest, once Frank introduced this new Bill of his all attempts to Repeal the UIGEA were dead on arrival... So why continue to support a petition that will go nowhere and never be seen by the people in power?

That said, I don't like the direction Frank's Bill takes. I would have much rather seen a true and full repeal of the UIGEA, but that is not gonna happen.

I don't believe that any law like this is going to forbid non-US companies from doing business inside the US. What I do believe will happen is that the Regulations that the US will put in place will make it very difficult, maybe even near impossible for a non-US casino company to do business inside the US.

Interesting note... If you read Frank's Bill, it does require all non-US Casinos companies to to open an office in the USA and effectively become US Business, subject to ALL American laws.

 

[dominique]

A plain repeal of UIGEA would not have stood a chance in hell of passing.

Throwing regulation in the mix makes it a lot more palatable to politicians. It should quiet the concerns about money laundering and under age gambling that are so often used to support a complete ban.

Being able to levy US taxes by making them have an office in the US further sweetens the deal for politicians. There is likely many a senator who has visions of dollar bills floating in his head and is thinking of what it would be like to have such an office in their state.

The banks seem perfectly willing to carry the burden of sorting legal transactions from illegal ones - probably they would love to see their credit cards used in this way.

All these things contribute to the effort of having the bill looked at closely by the powers that be.

How it would actually look if it passed is totally unpredictable, since everyone who may want to support it will want to add items that they think will make it more palatable to their constituents and make them look more like pro law and order than pro gambling.

This bill is a money oriented bill at the core, it is backed by the banks. Everything in this issue always has and will continue to revolve around money.

Who has a stronger lobby, the Indian casinos or the banks? Where will the Vegas groups land? How many states will want to go for the tax money?

I think the bill will have people think about the practical aspects of this, and that is a good thing.