Online gaming – and those all-American values

Well, I knew stuff all about gaming companies as I’m not the world’s biggest gambler.

My experience of gambling/gaming has been:

1) Paying £1 a week into a lottery syndicate at work – it was more of an insurance policy than anything else – I would have hated to have missed out on the win, and see my colleagues resign and leave me glued to my desk for ever and a day….

2) Playing poker or gin/seven card rummy or dominoes with Partner for money – we sit down with a bag of silver threepences, share them out, and when we have finished playing, they all go back in the bag.

3) I did play dominoes for a wager a few years ago. Me, Partner and his at-the-time arsey Spanish mate. We agreed the loser would buy the next round. I won. He bought the drinks. Ha!

Anyway onto some comments about gaming after I wrote last month about a favourable court decision for Gibraltar regarding autonomous tax laws.

This was basically where Gibraltar and the UK successfully fought an EU decision saying that Gib could not set its own tax regime, and would have significantly affected investment in Gibraltar had the decision been upheld. We enjoyed an extra bank holiday on Monday to celebrate this.

So, I decided to look up some stuff about gaming. Let’s start with PartyGaming. According to Wiki, it is best known for its online poker room –

And prior to the passage of anti-online gambling legislation by the US Congress, PartyGaming was the world’s biggest online poker brand. Ooops – almost forgot to add, it is headquartered in Gibraltar.

Founded in 1997, PartyGaming went public on the London Stock Exchange in 2005. In that year it made it into the FTSE 100 and profits before tax were $325 million.

A success story. Nice. The fly in the ointment?

On September 29, 2006, the US Congress passed the Safe Port Act. Passed incidentally, at midnight, the day Congress adjourned for the 2006 elections. What, might anyone with half a brain ask, has online gambling got to do with anti-terrorist legislation?

Well according to Wiki – there is no relationship. “Unrelated anti-gambling language” was added to the act, and it is called the Unlawful Internet Gambling Enforcement Act.

After that, PartyGaming then suspended offering real-money games to US players. Free games and non-US players were not affected. PartyGaming’s publicly traded stock dropped almost 60% in 24 hours. The company was moved from the FTSE 100 to the FTSE 250 Index.

Back to the Safe Port Act. What does the US web site say about it?

“To improve maritime and cargo security through enhanced layered defenses, and for other purposes.”

Really? That is just so relevant to online gambling. Full text of the gambling amendment here.

And here is some more insight into this bizarre legislation.

Apparently I can’t reproduce from that site so I can’t quote the par that says the Safe Port Act is an absurdity that attempted to placate the religious right element of the Republican Party….etc etc. It’s short though and worth a read to get a bit more insight into this odd situation..

Basically the act is not an online gambling ban. But it does ban the transfer of funds by US banks, credit card companies and payment processors between gamblers and online operators. (With, for some reason, the exception of fantasy sports, online lotteries, and horse racing).

This story of gaming + poker + Gib + America is not complete without mentioning Anurag Dikshit, an Indian-born billionaire who lives in Gibraltar.

Mr Dikshit was one of the founding members of PartyGaming, with Ruth Parasol, although he stepped down from the board in 2006.

Before Christmas 2008, he pleaded guilty in a US court to offering illegal gambling services in the United States and agreed to pay $300 million (£192 million) under the terms of his plea bargain. He is due to be sentenced in two years time, December 2010. Source TimesOnline.

And from the same source:

“Online gambling firms have run into trouble in the US after America made it illegal to gamble on the internet. In 2006, Washington passed the Unlawful Internet Gambling Enforcement Act and since then the DoJ under the Bush Administration has taken a hard line with foreign gambling firms. Washington has been accused of caving in to pressure from Las Vegas and of trying to protect America’s substantial horse racing betting businesses.”

Now why did I think there might be a little tiny bit of self-interest in this legislation? It seems I am not the only one. So is this act about family values and helping gambling addicts? Haha. Is it fuck. It is about money, American money, and anyone who thinks otherwise probably believed in WMD too.

The classic quote to sum it all up comes from Senator Robert Goodlatte, a long-term proponent for banning – foreign – internet gambling.

“Virtual betting parlors have attempted to avoid the application of the United States law by locating themselves offshore and out of jurisdictional reach.

“These offshore, fly-by-night Internet gambling operators are unlicensed, untaxed, un-regulatable and are sucking billions of dollars out of the United States.”

That says it all doesn’t it? If it ain’t taxed, licensed and regulated by the good old US of A, it’s illegal. Such arrogance.

But – the ones based in Gibraltar may be offshore – but they are neither unlicensed, untaxed, and un-regulatable.

From the Gibraltar government website:

Internet Gaming


All gaming operations in Gibraltar require licensing under the Gambling Act 2005.

The Licensing Authority will only consider licensing blue chip companies with a proven track record in gaming, licensed in a reputable jurisdiction, of good financial standing and with a realistic business plan. Licences are generally difficult to obtain. As at 1st September 2008 there were twenty licensed operators…

But offshore companies may well be – or rather have been – sucking billions of dollars out of the US. And do I care? No. And clearly neither did US online gamblers.

Ah America. The land of the free. Probition. Protectionism. Advocate of entrepreneurial success, the free market economy, and globalisation until it comes down to other countries sucking up your bucks.

Still, no doubt when you have raked in the dollars by prosecuting the likes of Mr Dikshit and others, I am sure you will be putting the money into your sparkling health service to help gambling addicts and their families.

Because rather than messing around prosecuting offshore companies that are running legal, regulated, and taxable businesses, I suggest you look to your health service. The stories I have read on the internet about American health care are beyond belief. In fact, they would drive one to gamble just to fund the insurance premiums.

And if anyone is naive enough to believe that Barack Obama will reverse the legislation, you are making the wrong bet. What government ever reverses legislation when it has been of financial benefit to the country?

To end – here is a link to a great YouTube vid looking at online gambling, morals, and …. money.

Sources – among others – Times Online, Washington Post, Gibraltar Government, various gaming sites, various right-wing family values hypocritical American sites. See, I don’t have to be neutral on my blog, but at least I do read the stuff I disagree with before I say what hypocritical garbage it is.

About roughseasinthemed

I write about my life as an English person living in Spain and Gibraltar, on Roughseas, subjects range from politics and current developments in Gib to book reviews, cooking and getting on with life. My views and thoughts on a variety of topics - depending on my mood of the day - can be found over on Clouds. A few pix are over on Everypic - although it is not a photoblog. And of course my dog had his own blog, but most of you knew that anyway. Pippadogblog etc
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3 Responses to Online gaming – and those all-American values

  1. Anna says:

    oh this is quite detailed, and I have no more time up here on the computer for various reasons, will come back tomorrow for in depth reading.Anna


  2. wow, this took some reading and probably going to have to re read it again, however, very thought provoking. The video was most interesting.Letty ;0)


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