Online gamblers are shocked to learn that Nevada officials have already stated their opposition to Representative Jim McDermott’s Investing in our Human Resources Act of 2008, despite the state potential to pull over $300 million in online casino gambling taxes.
According to the Las Vegas Review-Journal, McDermott has provided statistics from a PricewaterhouseCoopers study that shows that the IHRA would generate $40 billion for the U.S. over the next ten years, the revenue from which would be put toward job training and educational assistance for foster care youth. The bill was presented as an alteration of his previously proposed bill that calls for the Department of Treasury to tax, license and regulate online casinos and other forms of internet gambling. The motivation behind the more recent proposal is invest the money into much need social security reform, and to justify the legislation to anti-gamers.
“The gamblers want it; the poker players want it because they want a system in the United States, run in the United States, governed by our laws rather than floating out there in the world of the Internet,” said McDermott. Many non-gamblers agree that the revenue could be put toward vital government aid.The Las Vegas Review-Journal reports that Nevada officials, the least expected to oppose the bill, are not supportive of this new proposal. According to Representative Jon Porter, a Republican of Nevada, the bill would “set a harmful precedent.” Porter had previously suggested that studies for online gambling legislation be conducted. Many Nevada officials agree that the legislation is a “frivolous attack on the gaming community to pay for services that local governments, states and the federal government should already be providing.” The problem with this logic, however, is that the government is already struggling to finance housing, job training and educational aid and other forms of social security. The U.S. is facing a trillion dollar deficit and is running out of much needed resources for such programs.
Democratic Nevada Representative, Shelley Berkley, who also advocates for a one-year study of internet gambling, calls the new bill “a classic case of putting the cart before the horse.” The American Gaming Association, supporting Nevada land casinos and Berkley’s bill in favor of gaming research, claim that McDermott’s bill would “seem to be at odds with one of the core principles of the AGA, which is to protect states’ rights to individually tax and regulate gambling.”
McDermott disagreed. “My experience has been that, generally, studies are a way of wasting a year,” he said, “We need the money. We know what the issue is.” He went on to explain that his proposal is meant to supplement Barney Frank’s H.R. 2046 which calls for the regulation of online casinos. “Without his bill, my bill doesn’t go anywhere.”
Because McDermott does not expect that his bill will pass through the next series of committees, he has announced that he is prepared to re-introduce the bill in 2009. While it is unlikely that officials will move to regulate online casino gambling anytime soon, it is thought that perhaps putting the revenue to practical use might sway the decision.
It would appear that there is no end in sight for the Antigua, Barbuda and World Trade Organization’s dispute against the U.S. Last year the WTO’s arbitration panel announced that trade sanctions would be dispersed among the small nations to compensate for U.S. withdrawal from overseas online casinos.Still, U.S. Trade Representatives are involved in ongoing meetings, discussions and negotiations to avoid resolution, passing many extended deadlines.
A team of six Americans lead by Deputy US Trade Representative Ambassador John Veroneau, have delayed the process even more, according to Antigua Finance Minister Dr. Errol Cort. Cort told the Antigua Sun that the negotiations might continue for another two to three months, regardless U.S. delegation’s intent to return home on Tuesday. The new set deadline for U.S. compliance is August 1st, the third rescheduling this year. U.S. Trade Reps plan to keep negotiations open for a settlement on the internet casino’s issues. The negotiation timelines set for discussion, however, are much shorter than those set for settlement.
The U.S. has made previous settlement agreements with Antigua that have gone ignored. Dr. Colt has suggested that the short deadlines are meant to keep the talks productive, but that they were also keeping matters from being resolved in a timely manner. Because several U.S. governmental agencies are involved in the negotiations, the resolution process has been slow and painful for Antigua officials. It is thought by some that the new deadlines are set as a means for the U.S. to continue to shrug off their responsibility to overseas online casinos, and to prevent revenue from leaving America.
“I am not suggesting for one moment that on August 1st, 2008 the parties would have signed off on an agreement. I won’t want it to be misunderstood and misconstrued that we set these deadlines and we are breaking these deadlines. The deadlines are really set to keep the parties at the negotiating table, but they are not set thinking that on the particular date these issues will be resolved,” said Dr. Colt.
He also mentioned that at any time during the discussions, either party involved could abandon the negotiation process and request further World Trade Organization arbitration. “If you ask me realistically how much longer I think it would take to really come to some agreement that could be signed off on both sides, to fully flesh out and ventilate the issues on the table, I would say that the period would be perhaps over the next two to three month or so, if I had to put a frame on it,” Dr. Colt continued, “Could it happen before? Yes, it’s possible, depending on how quickly certain inter-agency discussions could take place and some sort of consensus be reached, but practically and realistically, having regard to how governments function.”
Some feel that the negotiation process might continue for years down the road, based on the progress so far. The U.S. has continued to tap dance around the issue for over a year now, with little to no results seen. In the meantime, offshore online casinos continue to face discriminatory prosecution by the U.S. without consequence.
Democratic representative Jim McDermott (Washington)has made a proposal to, by amending the Social Security Act, spend $40 billion on job training and educational assistance for foster care youth over the next ten years. The new legislation would be financed via revenue generated by online gambling. The bill, known as the Investing in our Human Resources Act, or H.R. 6501, is the second written by McDermott in an attempt to regulate internet casino gambling websites.
“We have an ideal opportunity to invest billions of dollars in American workers and our struggling economy without increasing the federal deficit,” said McDermott. “IHRA would utilize a funding stream that would become available should Congress decide to legalize and regulate internet gambling, which would protect consumers and collect tax revenue that is currently offshore.”
The IHRA calls for funds from the Transitional Assistance Trust Fund, attributable to internet gambling, to be transferred and invested into job training.Additionally the legislation would require more awareness of unsafe online casino practices and responsible internet gambling behavior. Section 3 of the IHRA states that the Secretary of Health and Human Services would have to complete a national program, known as the Safe Internet Gambling Practices Program in order to implement such policies into the regulation of internet gambling. This policy has been well received by problem gambling officials.
Keith Whyte, Executive Director of the National Council on Problem Gambling said, “I believe that the McDermott bill could be a positive step to help raise awareness about the dangers of unsafe gambling practices and the availability of addiction treatment.”
The IHRA is currently co-sponsored by Representative George Miller (Democrat, California), who is the chairman of the House Democratic Policy Committee, and John B. Larson (Democrat, Connecticut), vice chairman of the Democratic Caucus. The introduction of this bill shows that there is a growing support for the online casino industry in Congress. Safe and Secure Internet Gambling Initiative spokesman, Jeffery Sandman said, “We need to change the current oath, where the prohibition of internet gambling allows for billions of dollars to be lost in an underground, uncontrolled marketplace ripe for criminal exploitation.”
Billions of dollars is right. The market is said to generate revenue of between $8.7 billion and $42.8 billion over the next ten years. This revenue would be distributed to individual states based on their population percentages.
McDermott’s previous proposal, the Internet Gambling Regulation and Tax Enforcement Act of 2007, or H.R. 2607, is currently waiting to be reviewed by the House Committee on Ways and Means. H.R. 2607 would amend the Internal Revenue Code to establish licensing requirements and fees for internet gambling operators. As such, online casino, poker and sportsbook operators would be forced to meet set criteria of safe and fair business practices, and pay the Director of the Financial Crimes Enforcement Network a monthly license fee of 2% of all bets and wagers placed.
Playtech, the world’s largest publicly traded online gaming software supplier, has released its second quarter trading update and key performance indicators this week, showing its continued growth in the industry. Playtech’s CEO More Weizer proudly announced revenues this year of over $42 million, a 75% increase from last year and 9% from the first quarter.
“The second quarter of 2008 was a further significant period of growth for Playtech. This level of performance, particularly considering the impact of the Euro 2008 football tournament and traditional seasonality, is very impressive with licensees continuing to win relative market share,” said Weizer. “For the year to date, total revenues have increased by 85 percent. The Company has had a good start to July with further continued growth in both casino and poker. With organic growth and the launch of new licensees in Q3 and beyond we look forward to a strong quarter and the Board is highly confident of the prospects for the full year.”
The report shows that internet casino gaming is responsible for most of the revenue this year. Online casino revenues saw a 77 percent increase from $27.2 million last year to $30.8 million. To show how widely used Playtech software is, the entire online casino industry this year saw a 78% increase at $58 million. Playtech makes up 52% of that revenue. Online poker revenues totaled $11 million, showing a 74% increase. Overall the industry has grown 109% at $22 million.
The online gaming developer also announced its intention to seek further acquisitions and partnerships. Playtech has signed 10 new license agreements this year. Among Playtech’s new partners are Betsson, Vista Global limited, a subsidiary of Genting International, and Paramount Digital Entertainment, allowing for Playtech licensees to host games featuring Paramount Pictures brands, “Gladiator” and “The Untouchables.” The company intends to sign 8 more license agreements, as part of its emphasis on well established and reputable online casino operators. The team has partnered with Italian operators, and is currently working on a poker network for the Italian market.
Weizer commented, “This has been another outstanding quarter for the Group. With significant new license agreements signed during the period and with the soft launch of the Asian P2P games and flash poker product, Playtech is well positioned to grow in Q3 and beyond.”
It is no coincidence that since its founding in 1999 that Playtech has become the leading software for online casinos and other gaming websites. Playtech is incorporated in the British Virgin Islands, its head office located in the Isle of Man. The group mainly operates out of Estonia, Bulgaria, the Philippines and Israel. Playtech has offered a platform in which gaming activities such as online casinos, Bingo, online poker, mobile gaming, fixed-odds games, live gaming and land based kiosk networks may function as “stand-alone applications.” Of the sea of software developers, Playtech offers the widest variety of games, most efficient random number generators and technical systems testing, and state of the art graphics, making every gaming experience enjoyable.
The struggle to regulate internet casino gambling has expanded to Canada. June Cotte has demanded that internet gaming be legalized after intensive research on the effects of online casinos. The study that she and Kathryn A. Latour completed called “Blackjack in the Kitchen: Understanding Online Versus Casino Gambling,” is due to be published in the Journal of Consumer Research late next year. Cotte, a marketing associate professor at the Richard Ivery School of Business feels that the regulation of eGaming could reduce the potentially harmful effects of gambling.
According to CNW, Cotte and Latour (University of Nevada) interviewed 20 frequent land casino gamblers and 10 frequent online casino gamblers, using images as a trigger in order to determine how gambling is received by gamers. Because online gaming is more accessible and sometimes becomes a part of one’s daily ritual, and land casinos require travel, the study shows that online gamblers play more often and more aggressively than land gamblers.
“Our potential solution is to allow legitimate corporate sponsors, like the corporations that run the major casinos in Las Vegas or the government sponsors in Canada, to enter into a newly regulated market for online gambling,” said Cotte, “Just as legalized commercial gambling in casinos allows governments to regulate it, so, too, could the legislation of online gambling allow for better regulation and attempts to reduce the growth of problem gamblers.”
Additionally, Cotte stated that although online gambling is not permitted by U.S. or Canadian law, residents can still easily access offshore gaming sites. The study shows that over $10 billion is spent by worldwide online gamblers per year. She and her colleague feel that if online gaming were put under the same scrutiny and regulation as land casinos, the counts of problem gambling may decrease.
Cotte and Latour have made several suggestions for means of regulating online gaming. The team would like to see a more efficient system to check age requirements used by internet gaming sites. They also feel that online casinos should monitor new clientele for a history of pathological gambling, make financial limitations on online gamblers, and provide pop up gambling treatment advertisements and an available gambling counselor. The duo has also suggested mandatory “cooling-off” periods that would prohibit gamers that spend and excessive amount of time and money from accessing their account for a short time. They have recommended that records of wins and losses per user be kept. Furthermore, they feel that bold and flashing graphics that show a user has won should no longer be used, in order to reduce the “emotional experience” for gamblers.
“The unregulated online environment results in a more chaotic environment with no clear social norms and rules, “ Cotte said, “The meaning of gambling changes, moving from a shared conviviality available in the casino to a no-holds-barred battle online. It brings out the gamblers’ more competitive side.”
Because Canadian law is frequently more liberal than that of the U.S., it is possible that this study may open a door for Canadian gaming regulation in the future.
Following a deal with Cantor Gaming, the $1 billion M Resort, Spa and Casino in Las Vegas may soon see on-premises mobile gaming. The server-based gaming system that would be exclusive M Resort is still subject to the approval of the Nevada Gaming Commission and Nevada Control Board.
If approved, Cantor’s mobile gaming software, complete with full “back-office” infrastructure and a wide array of games, is scheduled to be launched in the spring of 2009. The system would have an online casino feel to players, offering games like slots, blackjack, roulette, baccarat and poker. Customers can open and fund a player account straight from the mobile device. Guests will still have to play within the casino’s property, but areas outside of the casino floor like the pool, lobby, bars, restaurants and convention centers, providing for an easily accessible gaming platform. Additionally, using portable apparatus within the designated areas, players can make unique bets in M Resort’s race books and sports books.
Cantor Gaming, through years spent developing and testing this technology, and lobbying with the Nevada Gaming Commission, received a manufacturer’s license in May of 2006; the first of its kind. Cantor is largely responsible for Nevada legislation that allows wireless mobile gaming in a casino resort. They are an affiliate of Cantor Fitzgerald LP, and offer cutting-edge technology for both mobile gaming as well as online gaming. By making use of the mobile gaming platform, casinos will turn their down time into revenue.
Cantor Gaming also offers a fully outsourced, online “white label” gaming to companies outside of the U.S. wishing to “leverage consumer brands.” The online gaming solution is fully compliant with gambling laws worldwide. The online casinos that Cantor supports offer a multiplayer format, a mobile casino, online poker, a safe and secure payment interface, advanced management information reporting system, banking and accounting functions and a bonus management system.
M Resort, Spa and Casino encompass 90 acres of land on the corner of the St. Rose Parkway and Las Vegas Boulevard. It provides a superb view for guests of the Las Vegas Skyline.The resort has over 92,000 square feet of gaming space and 60,000 square feet of conference space. M Resort holds 390 guest rooms, a spa and fitness center, eight restaurants, four bars, an entertainment venue, retail outlets, a 100,000 square feet pool area, and a 63,000 square foot movie entertainment theatre with 14 screens. If the mobile gaming platform is added to the mix, it would surely make an ideal vacation area.
“We want to provide our guests with the best overall gaming experience available. Cantor Gamin is an industry leader in the mobile gaming market and shares in our commitment to provide guests with an unparalleled gaming experience,” said M Resort’s Executive Vice President, Joseph A. Magliarditi.
“We are excited to have entered into a long-term partnership with the M Resort, Spa and Casino,” said Lee Amaitis, Cantor Gaming President. “Cantor has long been committed to developing and delivering state-of-the-art technology to enhance the gaming experience. We are looking forward to bringing this advanced gaming technology to the M Resort.”
Although the Payment Systems Protection Act (H.R. 5767) failed last month, this is certainly not the end of the road for internet gambling advocates. The fight for online gaming regulation continues in the form of four other Congressional bills, H.R. 2046, H.R. 2140, H.R. 2610 and H.R. 2607.
When the Payment Systems Protection Act was presented before the House Financial Services Committee, all but four Democrats and three Republicans voiced their support. Incidentally, there were six Democrats and six Republicans absent from the voting process.It is possible that these missing votes could have launched the bill forward.
The bill would have given a more clear definition to the banks asked to enforce the UIGEA of what constitutes as illegal internet gambling. Neither the proposed rules written by the U.S. Treasury Department and Federal Reserve Board nor the UIGEA define which types of transactions the financial institutions are to stop. However, because of the scare tactics used by the opposing argument, including moral objections and “child safety,” H.R. 5767 is dead. Online casino gamblers are left wondering where we go from here.
H.R. 2046 or the Internet Gambling Regulation and Enforcement Act, proposed by Representative Barney Frank, currently has 48 cosponsors. This bill was introduced in April of 2007 and under its jurisdiction individual states would be permitted to determine what types of internet gaming they will or will not allow. It would also force online casinos or other gaming sites to be monitored and regulated under specific guidelines. H.R. 2046 was last introduced to the Subcommittee on Commerce, Trade and Consumer Protection on April 30th, 2007.
Representative Shelley Berkley proposed H.R. 2140 in May of 2007. The bill requests a comprehensive study of Internet gambling to be conducted by the National Academy of Sciences to determine the U.S. response to online gambling. With 73 cosponsors, it was last referred to the Subcommittee on Crime, Terrorism and Homeland Security in June of 2007.
H.R. 2610, proposed by Representative Robert Wexler in June of 2007, advocates for online casino games like poker, chess, bridge or mahjong that require more skill than chance. The bill would exempt certain online games from the UIGEA to the extent that “the game provides for competition only between and among participants and not against the person operating the game; the operator is in compliance with federal regulations governing games of skill.” It too remains in the Subcommittee on Crime, Terrorism and Homeland Security and has 22 cosponsors as of June 7th, 2007.
Finally, there is H.R. 2607, proposed by Representative Jim McDermott in June of 2007 with just one cosponsor. If passed it would amend the Internal Revenue Code of 1986 in order to establish licensing requirements and fees for Internet gambling operators. The latest major action taken on behalf of the bill was its introduction to the House Committee on Ways and Means.
Online casino players can watch progress on these bills at pokerplayersalliance.org or govtrack.us. It is hoped that these bills will be well received by Congress in the future.
There are several online casino websites in the industry that players should be wary of. With the industry gaining so much popularity over the years, there are dishonest companies that exist solely to swindle people out of their money. This is not something that exists only in management, as there are other online players guilty of cheating in these types of games. That is why it is crucial for internet casino gambling websites to make use of third party fraud prevention. Fraud is not uncommon in the industry by any means and players won’t have to look far to find several counts of such brought to light.
It can be a risky business gambling online, especially when there is so much personal and financial information being transferred through these online casinos. There are countless opportunities for identity theft online and online gambling provides a prime source for fraudsters to do so. Fortunately there are websites and companies dedicated to the prevention of such happenings. Recently 192.com Business Services and 3rd Man joined together to offer online gaming websites unprecedented protection for ecommerce transaction.
Each company specializes in a certain type of anti-fraud protection and with their partnership; users will see a new level of comfort and safety when gaming online. 192.com’s trump card is the prevention of identity fraud and 3rd Man in identity checks with proprietary fraud prevention technology. They make daily searches of financial transactions for patterns of fraud. Each company has been highly rated in the industry. Paul Simms, 3rd Man CEO states, “By combining our fraud prevention technologies we can now offer one integrated solution that will be even more effective in identifying and preventing fraud… Our mutual aim is to make life easier for fraud managers at ecommerce and online gambling sites.”
In addition to these prevention agencies for the casino management, there are also websites that exist to protect the users from ecommerce disasters. eCOGRA, a non-organization designed to protect user safety in the online casino industry, has recently teamed with casinos like 888.com, LuckyAceCasino.com and LuckyAcePoker.com, awarding them with the “Safe and Fair” online gambling seal.Sites that have this Seal are ideal for gamblers as they assure the most safety in gaming. Along with other anti-fraud based websites like CasinoMeister, eCOGRA provides free arbitration for users who suspect that they may be victims of dishonest activity.
With these recent additions to the safety of online gaming, players can rest well knowing that they are in good hands. When accessing gambling websites, it’s important to look for awards, seals or general association with such companies. Anyone may access eCOGRA’s website for an extensive list of approved websites that undergo annual safety testing, as well as blacklisted sites that have been reported on several occasions to be guilty of fraud. Additionally, if you feel you may be a victim of fraudulent activity, and advocate is available to answer any inquiries. There were 783 dispute mediation requests last year alone with a mere 6% found to be invalid. These sites urge users to report any questionable activity, not only to mediate but to prevent further issue.
Unfortunately for the U.S. internet gambling market, many American citizens are apathetic to legal standing of online gaming. Before any regulatory bills can be passed through Congress, the people need to show the much needed support that just is not there. Because many U.S. players began to access online casinos well after the UIGEA had gone into effect they are unaware of the current restrictions put on game play.
U.S. Trade Representatives recently negotiated a settlement with the European Union in recompense for the discriminatory actions against overseas gaming establishments. The settlement is not commonly known among the American public. Speculation now circulates that Antigua, also involved in trade disputes with the U.S., could begin to infringe on American movie and music copyrights. The majority of American citizens are oblivious to this. Without their corroboration and patronage, state and federal legislators will not see any results in the campaign for internet gaming in the U.S. Business and revenue will continue to go to overseas gambling sites. Considering all of the advancements in gaming technology, land casinos will most likely struggle to maintain its consumer base.
Even with organizations like the Poker Players Alliance, with over one million members advocating for the right to gamble online, there is only a fraction of gamers taking action against the UIGEA. With further arrests being made because of anti-gambling laws, not only on the players and websites but payment processors as well, more online casinos and gaming websites are refusing U.S. players. Since the implementation of the UIGEA, thousands of online casino users have simply vanished. Because judicial action has been taken against payment processors like NETeller, internet gambling websites that accept U.S. players can no longer accept deposits from American citizens. The gaming market for Americans is diminishing by the day, and the majority of the gaming public sits idly by.
The amount of problem gamblers amount to around 0.6% of the adult population, according to studies by the UK Gambling Commission in 1999 and 2007. Since the founding of online casino gambling, the overall rate in gambling dropped from 62% if the adult population to 58% which suggests that the growth of internet gaming has not contributed to the number of problem gamblers. The taxable land gambling market has not undergone the same scrutiny as internet gambling. The U.S. is being denied billions of dollars in revenue that could be generated by taxing online casinos. That the American gaming public does not then question why their rights are being taken away demonstrates apathy and ignorance toward the invasive legislation.
For those who wish to participate in the fight against gaming laws, the Poker Players Alliance, gaming representatives and sensible Congressmen urge players to write state legislators expressing their opinions on the state of gaming in the U.S.The players who do not show their support are willingly forfeiting their rights and do not deserve to gamble online. We urge gamers everywhere to keep informed, voice their opinions and vote on regulatory legislation. Without the support of the public, no positive changes can be made.
Those opposing internet casino gambling are in an uproar over a Harvard research team’s findings in problem gambling. The gambling industry has donated $9.1 million dollars to the research of addictive gaming habits in the U.S., and anti-gamers are not satisfied with the results.
Howard Shaffer of Harvard has put great effort into the research of addictive behavior according to an article by Oliver Staley in Bloombergs business news this week. The opposing side, however, has made accusations that his findings were biased because they were financed by the gambling industry in what is being called the “funding effect.” “The casinos love the biological research because it points to the gambler as the source of the problem, rather than pointing to things like casino policy,” said psychologist, Henry Lesieur.
Shaffer’s research had found that less than 2 percent of American citizens are compulsive gamblers, which certainly puts a damper on the support for internet casino gambling bans. He notes that his resources included peer-reviewed journals which he had fully disclosed in his studies and that the casino companies had not intervened in his project. “Good science is good science,” says Shaffer, “It is possible to do very good research independent of the funding. It is also possible to be swayed by funding. My job is to have integrity and I think we have it.” Shaffer links addictions to chemical substances and behavior with biological, psychological and environmental factors. One study showed that casino workers were more prone to gambling addictions, smoking and alcohol dependency and depression than the general public. Shaffer explains that this demonstrates the legitimacy of his research. Aside from this, mental health experts will tell you that gambling addictions are classified as an impulse control disorder that can be associated with several forms of addiction.
While claims are still made that these studies may be influenced by a pressure to appease universities that judge academics based on the amount of funding is brought in, Shaffer’s research is in complete compliance with Harvard’s guidelines for receiving such finances says David Cameron, a spokesman for Harvard.
Shaffer is an associate professor of psychology at in Harvard’s Department of Psychiatry as well as the director of the Division on Addictions. His research institute has been funded by more than $9 million from casino companies and slots-machine makers, with an additional commitment for $22 million. His research is crucial to the legalization of internet casino gambling.
The opposing side is quick to condemn Shaffer’s findings without having provided much evidence to show otherwise.Government officials who justify gaming legislation with the argument that online casinos lead to problem gambling, especially in young people, may be responsible for these claims against Shaffer. With such a small percentage or compulsive gambling in the United States, the UIGEA has lost much of its clout. Whether or not this research will hold water in further court cases in support of internet gaming is yet to be seen. It goes without saying that regardless of how the gambling industry addresses compulsive behavior, critics will continue to frown upon games of chance.
