GPWA Times Magazine - Issue 11 - January 2010

Additionally, the politics surrounding gambling are also lining up behind a re- strictive nation-by-nation approach. The European Court of Justice has ruled in favor of protecting state-runmonopolies, and theEUparliament has voiced its ob- jection toaone-market philosophy. As a result, the costs of doing business in Europe are going up – and are likely to increase – and the possibility that only a handful of bigplayerswill beable tooffer their services throughoutEurope isgrow- ing. One of the few ways to fight this trend is through the EU. And an organization calledRight2bet is leading that charge. Right2bet describes itself as an “orga- nization compris- ing consumers from across the European Union who believe in a citizen’s right to choose. “Right2bet’s mission is to ensure that the principles of eco- nomic freedom in the European Union are applied as fairly to betting and gaming as theyare toanyother sector. “Ultimately, wewant all EU citizens to be able to bet with whichever EU-licensed betting company they wish, regardless of in which member state that company is based.” Right2bet is tryingsomepretty innovative things tomake theirgoalsa reality.But to betterunderstandwhyRight2bet isdoing this, it helps to lookat thepast first. When the Unlawful Internet Gambling EnforcementActwaspassedandadopted in the fall of 2006, the online gambling industry shifted its focus to Europe. The expectations were that by focusing on growth in Europe, it would help offset losses in theU.S.market. And the business strategy has been suc- cessful. According toH2Gambling Capi- tal, interactive gambling in Europe gen- erated €6.80 billion in revenue in 2008. And H2 Gambling Capital expects rev- enue to reach €8.31 billion in 2009 and €12.30billionby2012. In December, Mangas Gaming bought 60% of Everest Poker from GigaMedia for $100 million upfront and a second payment with price to be determined in 2012. Everest specializes in hyper-local- izedmarketing–particularly inEurope. “We are thrilled to have Everest Poker join the Mangas Gaming family,” said GigaMedia CEO Arthur Wang after the sale. “By partnering with Mangas, we can realize the full valueof ourpoker and casino software business and share the enormous upside of this powerful com- bination in the large European commu- nity.” “Everest expands our presence in the world of poker . . . strengthening our po- sitionasamajorEuropeanplayer,”added MangasCEO IsabelleParize. Oneof thekeys to thesuccessful growthof theEuropeanmarkethasbeena favorable political and regulatoryenvironment. In 2005, the British parliament passed one of theworld’smost progressive gam- bling reform acts. In it, Great Britain set up a regulatory environment for online gaming companies that wanted a British license AND a way for non-British juris- dictions togainaccess to theBritishmar- ket, creating thepossibility fora true “one market” inonlinegambling services. TheBritishmodel,whichwent into effect in 2007, relied on “white lists.” In order to offer and advertise online gambling services in the U.K., gaming sites had to have a license from a “white-listed” juris- diction. EU nations, along with Iceland, Liechtenstein, Norway, Gibraltar, Isle of Man and Alderney, were automatically placed on the “white list.” Tasmania and AntiguaandBarbuda–afterdemonstrat- ing that their regulatory structures met British standards – were added to the “white list” later on. The result of the “white list” was Brit- ish residents had a substantial number of licensed and regu- lated gaming sites to choose from if they wanted togambleon- line. While the British model provided a vir- tual “onemarket” for its residents, European Commissioner CharlieMcCreevywaspushing fora simi- lar result throughoutEurope. McCreevy, who is the outgoing commis- sioner overseeing the EU’s internal mar- kets and services, has a fairly simple phi- losophywhen it comes to trade. “Trade is one of the main pillars of our prosperity and the major driver of eco- nomicgrowth,”hesays. “AsCommission- er for the Internal Market and Services I want to ensure that remainingbarriers to trade withinEurope are dismantled over time.” McCreevy vigorously applied that philos- ophy toonlinegambling services. 38 GamblingWithout Borders