|US politicians have asked the UK treasury for its opinions on Internet gambling, which to some analysts suggests a shifting of US attitudes towards legalization. US Congressman John Conyers from the House of Representatives' Judiciary Committee recently wrote to the UK Chancellor Gordon Brown asking for his opinions on outlawing US residents from gambling online with offshore sites.|
As most of our readers will know, excluding Californian horse-racing, it is illegal for US residents to gamble online. But US residents make up half the $40 billion per year online gambling market, betting via offshore sites. Numerous attempts have been made to close down illegal Internet gambling, although no new law specifically prohibiting online gambling has yet been passed.
John Healey, economic secretary to the Treasury, cited the new UK Gambling Bill in his response, emphasizing that the UK Government is against prohibition: 'Online and telephone betting is already well established as a legal activity in this country . . . In going forward we have decided that it is better to regulate and control this activity rather than seek to prohibit it.' He added that 'online gambling brings with it an international dimension'.
Sportingbet is the only UK online bookmaker to derive the majority of its revenue – over 50 percent - from US punters. It handled bets worth $16m on this month's Super Bowl, a rise of 33 percent, including $14.8m from US gamblers'.
He said: 'If you accept that an internet transaction takes place where the individual resides rather than where the accepting business resides then gambling on the internet may be illegal under The Wire Act,' which the US passed in the 1960s. Sportingbet has exploited this loophole with an offshore site in Costa Rica.
Payne said some US politicians have realized the cost to the US in lost tax revenues. He added that he anticipates the introduction of 'a permissive Bill in March or April'.
Meanwhile, Payne thinks the Treasury is trying to make the UK an attractive place to set up online casinos. 'We believe that this is a Treasury-driven strategy because there is first-mover advantage for tax,' he said.
Other bookies are still wary. William Hill boss David Harding said he would not take US bets until the legal situation is resolved, but added: 'I don't think prohibition works. There's a massive illegal gambling market in America and it's missing out on the tax revenues.'