The world of slots gaming is evolving and that inevitably means that some companies aren’t going to last for very much longer. Namely it is the areas that are seeing huge developments that will experience the most change. For example, if a city area has one large casino then they are not splitting the area’s population at all. One-hundred percent of what gamers bring in goes directly to that one casino. If the city opens the door to two other slots parlors, then that gambling population is now cut into three. Plus add to the mix that a lot of states have online gambling and that thins out the revenue even more. Overall the shift in the market is making problems for some casino operators. They are realizing that their markets are no longer protected. They have to rethink their business models because of the overwhelming amount of competition coming into the market. If a company cannot improve and regain their customer base, they are at risk of having to close down.

Because competition is steep, more and more casino operating companies are being less than supportive of a growth market. It is happening all over Europe. Smaller states are trying to protect their own monopolies and pushing other companies out of the state. The problem is that the European Union however has longstanding free trade laws that have to be adhered to. According to the EU, states cannot form monopolies and have to allow competitors to move in on their territories. This goes for other forms of business and was well before the gambling world blew up, but now that it has, it includes gambling. A lot of states are hoping to change things. They would like to protect their gaming monopolies, but it isn’t being allowed. The same thing is happening in the US. There are open markets and gaming companies are pushing for their own markets. The only thing they can reasonably do though is to create the best casinos possible. If they do, they can stand up to the competition and gain a bigger market share in the process.

The European Court of Justice ruled that any country in the EU can restrict private players from internet slots and gambling if the rationale was to “safeguard the interests of the citizens.”  The parties involved in the dispute were BWin.com and Portuguese gambling monopoly. The debate began over Bwin.com’s sponsorship of the Portuguese soccer club Liga.  The BWin.com logo was placed on the soccer club’s website and the players’ uniforms. The state charity that possessed the rights to online betting and lottery gambling believed this to be a violation of their territorial property. The monopoly in turn fined Liga and BWin.com.

Previously, the European Court of Justice mandated that free trade could be restricted by a state if its purpose was to protect the public.  This rule was applicable in the case of BWin.com and the Portuguese because the Court deemed online gambling to involve a large risk of potential criminal activity or fraud within the society.  The winnings of players was substantial, therefore the likelihood of unscrupulous activities were heightened. 

In a press release BWin.com stated, “It is difficult for us to understand the rationale that crime is more difficult off-line than online.” The company affirmed their position that their consumer protection and fraud prevention programs were one of the best in the industry and held up well to any competitors’ programs. The Secretary General of the European Gaming and Betting Association, or EGBA, stated, “Several jurisdictions in the EU already prove that it is possible to guarantee a high level of consumer protection and have a well regulated and competitive online gaming market at the same time.”

Despite the decision, BWin.com believes that there is no evidence to substantiate the claim that online slots and online gambling are more susceptible to fraud. They issued a statement that read in part, “This judgment denigrates the online gambling industry.” The online slots industry does have some concern that the European Commission’s decision may force them to change their online policies for gambling in Europe. However, Remote Gaming Association CEO Clive Hawkswood stated, that he believes that though the court made “careless and inflammatory comments” in the ruling, nothing in it should stop the EC from dealing with future improprieties in online slots and gambling.

The European Commission, or EU, is taking a stand against countries against countries that are trying to introduce legislation on online gambling and slots play.  There are many European countries in the position of moving to legalizing gambling as a way of bringing in much-needed revenues. The online gambling market is a billion-dollar one and deficits are high globally.  With the possibility of legalizing and regulating online gambling and slots play, many countries see a way to solve their financial problems and balance their budgets.

Denmark is a country that is having some problems introducing legislations to its country. The EU is already accusing the country of having a “protectionist online gambling policy.” Dansk Spil is the name of the online gambling company that the EC was accusing of having a monopoly. They believed that the company was being given permission to limit online gambling and slots to their company.  It was not allowing fair competition for other online gambling casino and online slots operators to enter the market.

In response, Denmark revisited its legislation and has recrafted rules for online gambling and slots legalization. The country has new laws that permit other operators to compete against Dansk Spill in the market.  Ladbrokes has been one of the most vocal supporters of the new regulations and the company has made its own moves to seek licensing in Denmark once the protocols were laid out on how to do so. Lasse Dilschmann, CEO of Ladbrokes Scandinavia, stated, “While the Swedish Government has chosen to put forth arguments for a gambling market inconsistent with the demands of consumers, Denmark now chooses another way.”

That is good news for Ladbrokes and other online casinos that are looking to come into the country.  Although it may take some time for the new rules to be passed because the EU still has to review new legislation, it is expected that everything will go according to plan. The EU has not yet said when it will review the new proposed laws or when a decision will be made but analysts are hopeful that the new bills will pass with relative ease.

The British Department of Culture, Media and Sport, or DCMS, announced recently that it will not be adding any gaming operators to its White List until 2010. Customers who registered on the list were informed that their applications will be held until that time.  Included on the list are various internet gaming operators that are approved and given permission to promote in Britain.  These companies are hoping to gain a market share of the industry as the gaming world grows to include more and more customers.

Part of the freeze on White List additions is due to Britain wanting to reexamine their British Gambling Act. Mainly the act of 2005 focuses on three things:

1. Preventing gambling to be a source of crime or disorder; or being associated with crime or disorder, or being used to support crime;
2. Ensuring that gambling is conducted in a pure and open manner;
3. Protecting children and other vulnerable citizens from harm or exploitation.

The review of the act will begin immediately and should conclude by the end of the year. The beginning of 2010 will be when it is scheduled to pick up where it left off.

Part of the problems began when bookmakers in the UK reported that offshore operators had an advantage. Consistently more were complaining and demanding something be done to safeguard organizations. This is what spurred the review of procedure and caused the immediate freeze. British operators are hoping the review will level ground and give all operators, from every region, the same advantages. In a highly competitive market, it is understandable that companies were complaining and wanting a competitive edge. The British government boasts transparency and would like that to remain. They are hoping to create an egalitarian gaming platform so the internet gambling companies all have equality.  Complicating the issue is the fact that European Union members are not following EU directives. These directives include opening up the world of internet gambling to countries within the EU umbrella. For example, as of this time neither France nor Italy are permitted to allow their British-based gambling companies to access their jurisdictions. This is causing much tension within the world of gambling entities.

Hopefully, by reviewing the issue Britain will be able to fix the situation. They want to make the market welcoming to all gambling companies who are willing to follow the rules and regulations they put forth. This is a difficult situation however, because of the sheer size of revenues at stake. Online gambling is a billion dollar industry and that alone makes it a hard topic to tackle for any government.

The question of legalizing gambling will be taken to new heights as the European Union starts its investigation into the US gambling ban. Many pundits believe that once investigations begin, the EU will be offended by the ban on gambling and will translate the ban into a free world trade issue.  The US ban on internet gambling stands due to the UIGEA of 2006. This ban, the Unlawful Internet Gambling Enforcement Act, cites the transfer of funds from a financial institution to an internet gambling website as illegal. The only exceptions are fantasy sports, online lotteries and horse racing.

The EU will take notice of this ban due to the free trade agreement. This is a trade policy that allows countries to act and transact without interference from the government. This includes trading partners with mutual gains when trading goods and services.  Under the free trade policy, partners are protected and required to act fairly. The ban of online gambling, could be considered a violation of the free trade agreement.

Many believe that the EU will drag the World Trade Organization into the debates over the US ban of online gambling.  This would be much like the tactic Antigua used to gain access to the US. Antigua is a recognized hub for online internet gambling companies, mostly because it was one of the first countries to legalize, license and regulate online gambling. It was the US that argued that because the gaming transaction was initiated on US soil, the act of online wagering is still illegal. Antigua, along with help from the World Trade Organization, managed to debate this. The issue is still in arbitration, but the panel is citing US is failing to comply with World Trade Organization rules and it will be facing a $21 million fine. The debate is far from over, but many believe the Antigua issue will be instrumental in toppling the US ban on online gambling.

EU Trade Commissioner stated, “It is for the US to decide how best to regulate internet gambling in its market, but this must be done in a way that fully respects WTO obligations. I am hopeful that we can find a swift, negotiated solution to this issue.”

The US and European Union are in a sharp debate over the legalization of online gambling.  The European Union, or EU, is an international organization that holds the interests of various countries in mind. Their job is to conglomerate the 27 member states involved. They are committed to regional integration and they were established in 1993. The EU has been instrumental in creating a single market that works with a standardized system of operations, applying to all 27 member states.  This system of operations is set to ensure the freedom of “movement of people, goods, services and capital.”  It also notes common policies on trade among various countries.  The EU was initially set up to go head to head with the Soviet Union and the US. Due to changes in the Soviet Union, the EU has remained strong and now represents a wide variety of countries but it is only facing the US as an opponent.

The EU is continuing its plight for fairness in trading when it comes to the industry of online gambling. Many websites that offer online casinos are housed in EU-based areas. The US is blocking citizens from participating in these websites and the EU is seeing this as a problem.  Due to the UIGEA, or Unlawful Internet Gambling Enforcement Act of 2006, legislation prohibits online gambling companies from marketing directly to US citizens.  The UIGEA effectively renders online gambling illegal and people who participate in it can be taken to court and prosecuted. Their winnings can be frozen and seized by the government. 

The EU is claiming, however, that the US is unfairly targeting European countries in the ban.  Most online gambling companies are not based in the US and therefore they are suffering as a result of the UIGEA law. A recent study by the EU decided that the law was unfair and broke an ongoing trade agreement between the US and the EU.  They are wanting to resolve the matter with the US, but finding solutions are proving to be difficult. Fortunately, as the US moves towards legalization and regulation of online gambling, the door will be opened for more companies to provide the online gaming service.  These companies are based in Europe and will have the ability to work with free trade laws as already dictated by both entities.