Brave few stay in US gambling market
The Unlawful Internet Gambling Enforcement Act of 2006 amends Chapter 53 of title 31, United States Code, by adding at the end the following: "SUBCHAPTER IV PROHIBITION ON FUNDING OF UNLAWFUL INTERNET GAMBLING". Chapter 53 deals with Monetary transactions and is designed to; "increase the strength of United States measures to prevent, detect, and prosecute international money laundering and the financing of terrorism...(and) to provide a clear national mandate for subjecting to special scrutiny those foreign jurisdictions, financial institutions operating outside of the United States, and classes of international transactions or types of accounts that pose particular, identifiable opportunities for criminal abuse ." The Act makes unlawful the receipt by a gambling business of proceeds or monies in connection with unlawful internet gambling. It represents the first piece of Federal legislation to explicitly deal with online gambling, and it makes clear the US government's intention to stop the flow of funds from Americans to online gaming operators through criminal sanction. Under the Act "Restricted transaction" is taken to mean any transmittal of money involved with unlawful Internet gambling, whilst a "bet" is construed as including;
"the staking or risking by any person of something of value upon the outcome of a contest of others, a sporting event, or a game subject to chance, upon an agreement or understanding that the person or another person will receive something of value in the event of a certain outcome (and) any instruction or information pertaining to the establishment or movement of funds by the bettor or customer in, to, or from an account with the business of betting or wagering."
The term 'financial transaction provider' means a creditor, credit card issuer, financial institution, operator of a terminal at which an electronic fund transfer may be initiated, money transmitting business, or international, national, regional, or local payment network utilized to effect a credit transaction, electronic fund transfer, stored value product transaction, or money transmitting service, or a participant in such network, or other participant in a designated payment system.
In response to the passing of the Act Sportingbet and Leisure & Gaming sold off their US facing business for $1. PartyGaming, 888 and Betcorp all ceased taking bets from US citizens, whilst World Gaming went into administration. The collapse of the sector and the rapid sell off of company assets, without shareholder approval, was unprecedented in the corporate history of the UK.
Nonetheless, a number of concerns have taken a decision to stay in the US-facing online gambling market, including a number of publicly quoted companies.
International All Sports Ltd International All Sports Ltd (IAS) was formed in July 1995 by leading Australian bookmaker Mark Read, with seed capital provided by a small group of investors, including three leading Melbourne based bookmakers. The company was listed on the Australian Stock Exchange on 6 August 1999. On 6 August 2004 International All Sports Limited merged with fellow Australian bookmaker Canbet Limited, under the terms of which, Canbet shareholders received 1 IAS share for every 25 Canbet shares they held. The Northern Territory Racing Commission subsequently awarded a sports bookmaking licence to Canbet, allowing the company to operate a 24/7 internet and telephone race and sports betting service.
In response to the passing of the Act the company issued the following statement to the Australian Stock Exchange;
"The Board of International All Sports Limited is disappointed that the USA Government is passing laws to circumvent its commitment under the General Agreement of Trade and Services to the World Trade Organisation to allow free international trade in an effort to protect USA gaming companies that operate in the USA. The Board notes that USA horse racing has been exempted from the legislation and as such would not affect the business of IASbet.com. The financial effect on Canbet, the international brand of IAS that operates out of the United Kingdom is not expected to have any financial effect as to the operating profit of the group. The Board has taken legal advice and will continue to take further advice with the objective of understanding the regulations and procedures which have yet to be completed."
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