Internet casinos used to think of Australia as a safe haven for a business that is outlawed in the U.S. But during an intense six months of political roulette in Australia, the country’s online casinos have found it almost impossible to expand or open new sites. Threatened with a government moratorium on Internet gaming, casinos watched and waited.

Now, the industry’s future may be spinning on the right number. Australia’s Senate has narrowly rejected a proposed bill that would have banned new Internet gaming and wagering sites and restricted the country’s existing 22 licensed sites.

Online casino operators are watching from Europe and North America. “It’s of much interest around the world because Australia has been pointed to repeatedly as the most proactive and visionary on this matter,” says Sue Schneider, president of the River City Group, an online gaming researcher and publisher of Interactive Gaming News. “Many established gaming operators in the U.S. and Europe were exploring Australian jurisdictions as a home base for their Internet operations due to the good regulation there.”

ANTE UP

At stake is an interactive money-spinner that could generate gaming revenues of $810 million worldwide this year and $4.5 billion worldwide in 2002, according to projections from the Interactive Gaming Council , a Vancouver group that is attempting to develop a “seal of approval” for trusted gaming sites.

In the long term, gaming operators worldwide face an end to a U.S. prohibition on Internet gaming, which may introduce a flood of stateside competitors to established online gaming sites. The U.S. Senate approved an Internet gaming ban sponsored by Senator Jon Kyl (R-AZ) last November, though the U.S. House of Representatives rejected a similar ban proposed in July by Representative Robert Goodlatte (R-VA).

“There does seem to be some interest building in some key U.S. Togel gaming states to develop a regulatory structure,” says Ms. Schneider. “Operators there see their colleagues in Australasia and Europe jumping in and taking the U.S. market. But I think that developing policy in U.S. states will definitely not happen quickly.”

Gaming sites in Australia, as elsewhere, sense they have a unique window of opportunity to attract U.S. gamblers before the industry’s political barriers crumble. In early October, for instance, the Nevada Gaming Control Board approved a wagering system from Virtgame.com that will allow Nevada residents to place sports bets at Virtgame.com over a private connection that is tightly controlled and does not use the Internet.

At first sight, the Australia Senate vote ten days ago issued an all-clear sign for the gaming industry, which includes sports-wagering site Canbet and GoCorp , an online casino that went public in May. The vote was a defeat for the nation’s prime minister, John Howard, who suggested the moratorium in May but could not win the support of key independent voters in the Senate. Still, there is speculation that Mr. Howard may attempt another vote on the issue in the next few months, in order to cement his support among conservative antigaming voters.

THE CHIPS ARE DOWN

“While the vote on the moratorium was a positive sign, the relative uncertainty of whether it will be brought up again will likely keep many of those solid operators from making the investment to operate from Australia,” says Ms. Schneider. “More are heading to jurisdictions like Antigua, which is still clearly in the lead in terms of the number of licensees. Even Australian-based companies are moving to places like that as one of the few viable alternatives at this point.”

The Australian vote should make for interesting talk at this week’s World Gaming Congress in Las Vegas.

Government regulation of the sector is still uncertain in Australia, where six states and two territories impose different licensing laws despite serial attempts to draft a national code. “The regulations at the moment are a dog’s breakfast — inconsistent and uneven,” says Mr. McMillan, head of the Australian Institute for Gambling Research in Sydney. “We can’t get our states to agree on anything, but this is one case where agreement is essential.”

Critics say it’s another case of politicians meddling in a business they do not understand. And like the Australian government’s other Internet controversy — last year’s legislation to ban some pornographic Web sites — it suggests that the country’s leaders continue to overestimate their power to control what happens on the Web.

“What is amply demonstrable is that by virtue of regulation, you don’t necessarily limit people’s ability to access these sites,” says Senator Kate Lundy, an opponent of both the ban on Internet pornography and the current proposal for a gaming moratorium. But Ms. Lundy is in the minority Australian Labor Party, which lost power to Mr. Howard in 1996.

It is a restrictive system, but it may be a sign of things to come — the day when the world’s Internet gamblers can make a wager in Las Vegas rather than Australia or Antigua. With the Australian government’s moratorium out of the way for now, Australian gaming sites have a chance to make hay while the sun shines.

 

 

 

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