Introduction

History

Types of online gambling

Market share and Statistics

Risks and Benefits

Legalities

Youth, Adults and Online Gambling

6 thesis

Providers and Payment Methods

Future of Online Gaming

Pros and Cons

Conclusion

What is Gambling?

Gambling is the wagering of money or

something of material value on an event with

an uncertain outcome with the primary intent

of winning additional money and/or material

goods.

Gambling is also a major international

commercial activity, with the legal gambling

market totaling an estimated $535 billion in

2013.

Internet gambling is, generally a means of

using the internet to place bets on casino

games, sports games, etc. Bets are usually

placed through credit card accounts and

wins or losses are paid or collected

accordingly.

Online gambling, also known as Internet

gambling and eGambling, is a general term

for gambling using the Internet.

• In 1994 the Caribbean nation of Antigua and Barbuda passed the Free Trade & Processing act, allowing licenses to be granted to organizations applying to open online casinos

• In the late 1990s, online gambling gained popularity. Internet gambling websites had increased from just 15 websites in 1996, to 200 websites in 1997

The Internet has made way for new types of

gambling to form online. Following are

different types of online gambling games:

1. POKER

2. BINGO

3. LOTTERIES

4. SPORTS BETTING

5. ONLINE CASINOS

6. HORSE RACING BETTING

21%

7%

7%

9%38%

18%

Casino

Bingo

Skill Games

Lotteries

Wagering

Poker

Youth Gambling

Pathological Gambling

familiarity anonymity

high level

of privacyeasy access

24 hours

Criminal Use

1. Lack of Accountability

3. Money Laundry

2. Computer Hacker

Jobs

Investment

Tax revenue

Contribution to society and

economy

PROBLEM: difficult to compare

risks and benefits due to lack

of information

• Problem gambling & addiction

• Harm for individual and society

• Minors

• Crime associated with (some) gambling operations

(fraud, money laundering)

• Consumer protection

• Ensuring gambling is conducted fairly and openly

• —India has recently become a potential gold mine

for online gambling operators. This is mainly due

to the current financial growth of their middle

classes and the exponential increase in the

number of people in the country who now have

access to the internet.

• According to gambling statistics, 40% of the

indian population that have a computer and

internet, visit online gambling websites.

• Online teen patti

• Cricket betting and satta

• Online lotteries issued by state government

“It is impossible to stop people gambling on the Internet, all you can

do is to make it harder.”

(The Economist 1999)

“The government has as much of a chance of banning internet

gambling as the FAA has of banning migrating ducks flying

through commercial air space.“ (Posting in a gambling newsgroup)

40 countries worldwide which allow gambling

Australia, Austria, Germany, Finland...

Off-shore countries (tax haven)

USA struggles bet regulation and banning

$ 40 billion tax revenue by state-run lottery

But is it possible to stop internet gambling without

a worldwide uniform law?

FAA: Federal Aviation

Administration

Betting or gambling is illegal in most of India. But there is

no law that makes online gambling an illegal activity.

Of f shore betting companies are apparently using this

loophole to lure Indians to bet on pretty much every

thing.

According to The Public Gambling Act 1867, all kind of

gambling are illegal in India.

On 4th March 2009 the government of Sikkim issued a

memorandum know as Sikkim Online Gaming Rules 2009,

this outlines the rules and regulations for online gambling

licensing within the state.

• www.topbet.eu

• www.bovada.lv

• www.betonline.com

• www.casinotitan.im

• www.winpalace.com

• www.onlinebetting.com

• www.indiabet.com

• www.cricketbetting.com

Around the world: In India

• Outright prohibition of online Gambling Workable?• US Unlawful Internet Gambling Enforcement

Act 2006

• State operator monopoly • Eg Svenska Spel or Norsk Tipping (games);

Norsk Rikstoto (horse race betting)

• Single private operator• Eg Pari Mutuel Urbain in France

• Restricted licensing system

• Open licensing system• Eg UK Gambling Act 2005

Divergent laws, no harmonisation, no country of

origin rule

Excluded from scope of Services Directive, E-

commerce Directive etc

The internet & cross-border access

EU Treaty, Arts 43 and 49 (freedom to provide

services & establishment)

Direct effect => lever for harmonisation??

Role of the courts in the absence of

harmonisation?

• Case C-275/92 Schindler

• Case C-124/97 Lärää

• Case C-67/98 Zenatti

--------------------------------------------------

• Case C-234/01 Gambelli

• Case C-338/04 Placanica (6. March 2007)

• Case E-1/06 Re Amendment to Game & Lottery Law (14. March 2007)

• Case E-3/06 Ladbrokes v Norway (30. May 2007)

• Jurisprudence under Art 234 (Prelim Ref)

• Commission infringement procedure Art 226

• Notification against Denmark, Germany, Finland, Italy, the Netherlands, Sweden and Hungary (April 2006)

• Austria and Luxembourg (December 2006)

• Commission expressing concerns on the German Inter-State Treaty in March 2007

• Internet prohibition for sports bets and lotteries

• The PMU v Zeturf case as an example

• Situation following Gambelli & Placanica:

• PMU v Zeturf : Court of Appeal, Paris: (1) ordering

cessation of operations; (2) quantifying the penalty

amount due by Zeturf

• Maltese courts refuse enforcement

• French Cour de Cassation: Reversed to CA (13. July

2007)

- The prevalence of youth online gambling has risen noticeably in recent years (2003/04: 2 %; 2007/08:

24 %).

- 4 % of the sample participate at least weekly in Internet gambling (mostly boys).

- Almost all adolescents with online gambling experience gamble offline simultaneously.

- A relatively large number of Internet gamblers are problem gamblers (Internet gamblers: 7.7 %; non-Internet gamblers: 1.1 %)

Online Survey (worldwide)

n = 12,521

Internet gambling

(yes)

Internet gambling

(no)

Non-problem

gambling (%)39.9 82.1

At-risk gambling

(%)43.4 12.3

Moderate gambling

problems (%)12.8 4.0

Severe gambling

problems (%)3.8 1.7

The theoretical analysis of structural characteristics of Internet

gambling implies a high addictive potential.

But: Differences between gambling forms are necessary!

Online surveys with self-selected samples suggest that online

gamblers are significantly more often problem gamblers.

But: Generalizations are illegitimate based on self-selected samples!

First epidemiological studies seem to confirm the high

addictive potential associated with Internet gambling.

But: Small number of cases/ cause and effect is unknown!

The longitudinal analysis of actual online gambling behavior

(bwin subscribers) indicates that only a small fraction of the

cohort shows excessive gambling patterns.

But: Analysis is restricted to a single provider of online

gambling!

Economics (time, effort, costs), temporal precision, large

sample, objectivity of acquisition, longitudinal study

Lack of representativeness of sample and

behavior, lack of data validity (missing information on use of

other forms, on gambling motivation, on gambling-related

problems etc.), prediction of behavior on restricted data base

is limited

Analysis of gambling behavior (Behavior Tracking Tools)

Comparison with versions that cover characteristics of problem

gamblers

Implicates low threshold measures

Useful, innovative measures of player protection

Integration in corporate culture, no lip service

Politics must demand early detection and control it

1. Growing turnover figures of online gambling are to be expected, independent of prevailing regulatory frameworks!

2. The enforcement of a total ban of online gambling seems unrealistic and cost-intensive. Obviously, the prohibitive approach doesn‘t fulfill the function of averting risk!

3. The impact of smartphones in the acceleration of online gambling servives will increase!

4. A growing number of persons is going to develop problems related to online gambling!

5. The Internet confronts addiciton prevention with new challenges. At the same time, however, it offers promising approaches for player protection such as early detection of at-risk behavior based on actual gambling behavior!

6. An independent evaluation of implementations of social concepts is necessary as gambling providers get a significant proportion of revenues from gambling addicts (up to 56 %, depending on type of gambling)!

• Casinos

http://www.freecasinogames.com/enter.html

• Poker Rooms http://www.online-

gambling.com/freecasinogames/Poker.html

• Sports/Race Books

https://www.bwin.com/sportsbook.aspx

• Skill game sites http://www.king.com/

• 48 jurisdictions

• Major providers are:

• Gibraltar (208 sites)

• United Kingdom (98 sites)

• Malta (314 sites)

• Alderney (62 sites)

• Isle of Man (14 sites)

• Netherland Antilles (257 sites)

• Austria (9 sites)

• Costa Rica (218 sites)

• Antigua (76 sites)

• 150 ways to pay

• Visa and MasterCard most popular, and accepted by 90% of sites (not from U.S. players)

• Other popular methods: Neteller (72% of sites); Bank Wire Transfer (58% of sites); Moneybookers (50% of sites); personal cheque (25% of sites).

$15-20 billion in 2008, with sports/race books, casinos and poker accounting for large majority

4-5% of worldwide gambling market

Patronage uncertain: North America (30-35%) Asia (11 – 49%); Europe (23-44%)

U.S., China, U.K. largest single markets within these continents

Unfair, Illegal, or Irresponsible Business Practices

Not paying player winnings

Unfair odds

Free-Play sections with odds that favour the

player

1/3 of online players report having had a dispute

with an online casino or poker website

Unfair or Illegal Player Practices

Hacking sites to pay wins

Theft and fraud at skill game sites

‘denial of service’ attacks (extortion)

Money laundering

Player collusion

Poker bots

Nature of Internet Gambling makes it conducive to

producing Problem Gambling

24 hrs immediate access

Solitary play

Immersive interface

‘electronic cash’

Ability to play under influence of drugs or alcohol

In general, evidence suggests the prevalence of

problem gambling is 3 to 4 times higher in Internet

gamblers

Continued strong revenue growth

Particularly strong growth among the

Asian market

Strong growth in Betting Exchanges and

Skill Games

• Market consolidation

• Growth of other forms of remote gambling

• Increasing rates of problem gambling

• Movement toward legalized and regulated

markets (with some later regrets?)

• Increasing rates of problem gambling

• Movement toward legalized and regulated

markets (with some later regrets?)

REGULATORY CONTROL WOULD ENSURE FAIR GAMES

AND BETTER PLAYER PROTECTION

REGULATORY CONTROL WOULD ACCRUE ECONOMIC

BENEFITS THAT ARE CURRENTLY LEAVING THE JURISDICTION

(THEN APPLIED TO PREVENTION/TREATMENT)

GOVT SHOULD NOT BE REGULATING PEOPLE’S LEISURE

BEHAVIOUR OR HOW THEY SPEND THEIR MONEY

Legalization will increase the rates of problem gambling

Nature of online gambling makes it inherently more

problematic

Significant % of online gambling revenue comes from

problem gamblers (41% in canada; 27% internationally)

Legalizing online gambling and redirecting $ into treatment

does not offset the harm caused

2. Trends toward regulation instead of banning

Regulation (mostly through licensing) is the only way to

generate budget to cover the social costs following from excess gambling

These social costs occur independent from any regulation

1. Internet Gambling will not substitute off-line industry:

Betting will be mostly conducted via Internet

But casinos and lotteries will hold a big market share Overall growth

3. Social Problems will sharply increase

Youth gambling and pathological gambling due to features

of Internet

• ONLINE GAMBLING GROWTH SECTOR => PRESSURE TO

LIBERALISE CROSS-BORDER PROVISION

• POTENTIAL FOR SOCIAL & INDIVIDUAL HARM => RISK

ASSESSMENT SPECIFIC TO ONLINE GAMBLING

• ENFORCEMENT ISSUES PERTAINING TO NATIONAL REGULATION

(ARRESTS; PAYMENT PROVIDERS)

• HARMONISATION UNLIKELY

• ROLE OF THE ECJ/WTO IN DETERMINING THE LIMITS OF SOCIAL

POLICY

• PROPORTIONALITY TEST

• BUT APPLICATION BY THE NATIONAL COURTS?

• RESULT: LITIGATION BATTLE

20SEARCH

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