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Don't Bet On It!

Jeremy Hetherington-Gore Unleashed
26 July, 2009

The French are the latest nation to try to carve up the succulent carcass of on-line gambling in a way that keeps as many of the juiciest morsels for their own treasury while accepting the inevitability that they will lose control over most aspects of the gaming process, which increasingly no longer takes place on a country's own territory. And as with other countries that have trodden the same route, notably the UK and the USA, the French have brought a mixture of piousness, hypocrisy and greed to the party.

The Janus-faced relationship between the State and its citizens is nowhere more glaringly exposed than in betting and gaming. On the one hand, there are always strong moral pressures to control gambling because of the damage it can do to families and individuals, even to communities, and its propensity to attract criminal involvement. But on the other hand, in history the State has almost never been able to resist the temptation to raise revenue from gambling. Prior to the advent of the Internet, the result in most countries was an uneasy balance in which sanitized State lotteries tried to satisfy people's need to gamble while hard-core gaming was relegated to distant territories or conducted within clubs or casinos which can exclude vulnerable individuals. This dichotomy is still alive and well - the Chinese go to Macau to gamble, and the Russians have just exiled casinos to Northern Siberia - but of course it is being overtaken by the Internet.

Inside the European Union, countries which try to limit the provision of on-line gaming to their own territory find themselves fixed with the steely gaze of the Commission. Unwillingly, the British government had to allow operators to be based anywhere in the Union when it brought in new rules in 2005, although they are bound by stiff codes of practice. It also felt obliged to include its dependent territories - Alderney (part of Guernsey), Gibraltar and the Isle of Man already had thriving on-line gaming sectors which it could hardly abolish overnight. The French don't have that problem, exactly, other perhaps than with Monaco, but they are sitting ducks for web-sites in other member states, and in practice are just trying to make the best of a bad job by creating an on-line gaming regime of their own. Other EU countries have already done the same, or will shortly follow along.

Needless to say, countries that introduce on-line gaming regimes are doing it for the money. The British apply a 15% gross profit tax, and the French are going to apply a 7.5% turnover tax. What chance do they have though when Malta for instance, itself inside the EU and free to compete, charges 0.5% of turnover?

The US, not hobbled by EU rules, has had the freedom to do as it chooses, and displays a particularly blatant contrast between protectionist morality and pragmatic revenue-raising, the latter admittedly mostly at the level of the individual States. Many people were outraged by the hypocrisy of the various pieces of US legislation between 2003 and 2006 which outlawed non-US gaming sites while doing little or nothing to control burgeoning domestic gaming.

So what is going to happen? Well, you can be sure that at least in what is called hopefully 'the free world' the State will not be able to stop people using on-line gaming sites, controlled or otherwise. People will just not accept that degree of interference. The State stands a better chance of being able to control the flow of monies that are involved - the placing of stakes and the remittance of winnings - although the US experience so far in trying to do just that is not hopeful. The banks say that in practice it is impossible for them to identify suspect payments, and for every Pay-Pal that has its wings clipped by an e-Bay, there are another half dozen Internet payment services ready and willing to take its place.

If countries were sincere about protecting their populations, then rather than flogging a dead horse, to introduce a relevant metaphor, surely it would be more honourable to ban gaming altogether on your territory, and concentrate on educating people to avoid or temper it on-line? That would give the State the moral authority it so patently lacks in the present situation. But don't hold your breath!


About the Author

Jeremy Hetherington-Gore Unleashed

Jeremy tackles the difficult issues head on!


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