Unlawful Internet Gambling Enforcement Act – Onwards to Asia
Posted on | October 10, 2006 | No Comments
On 30th of September, US Congress passed the Unlawful Internet Gambling Enforcement Act of 2006, which will be implemented as a law, as soon as, US President George Bush signs it.
The legislation forbids Internet casino companies from accepting US financial transactions and US banks and credit card companies from processing payments from illegal online gambling.
The implementation of the Safe Port Act invites trouble for online gaming sites, financial institutions and the users.
While certain financial institutions like the online payment specialist FireOne has already declared to cease processing settlement transactions originating from US online gamblers upon enactment of legislation, other financial service companies, including US Chamber of Commerce, have shown concerns about compliance burdens that involve tracking and blocking potentially millions of transactions.
In the light of US being the major source of business to all the online casinos located abroad, the ban is bound to have momentous negative repercussions on the online casino businesses, as well as, calls for substantial restructuring of operations and cost base at the end of affected parties.
As figures reflect, 95% of the World’s Gaming business accrues from US. Party Gaming, the world’s biggest online-gambling company by market capitalization, attributes four-fifths of its sales to US. About 50% of revenue of 888 comes from US. Consequentially, the denial of access to US marketplace has triggered nosedive for the stocks of the online gambling sites located outside US. For instance, UK-listed PartyGaming’s shares have dropped by 64 per cent after the announcement, which has led the company to scrap its dividend to save about £60 million. According to analysts, the companies are unlikely to relocate market quickly enough to recover. No doubt, some online gambling companies, including PartyGaming and 888 have made up their mind to stop accepting bets from US customers if the legislation is signed by US president into law.
As for the online US gamblers, while some hope to keep playing online gambling games by using third-party payment sites like Firepay.com or Neteller – the intermediaries between financial institutions and the online gambling sites thriving in US, others feel they can continue to play, albeit more cautiously, by cashing out their winnings or deposits immediately, lest the site shuts down. The decision comes off as a serious blow, especially for those who gamble as a matter of livelihood.
With the legislation expected to turn into law within two weeks, the online gambling site operators and software companies have decided to stop cribbing about setbacks and instead explore the latent Asian markets.
The gaming software company, Playtech has ventured into exploration of Asian markets by focusing on tailor-made online games to suit Asian taste. While Playtech is already focusing on software for the Japanese game Pachinko, as well as its first version of Mahjong, online gaming software Excapsa Software has made up its mind to move in the direction.
In spite of renowned market potential, Asia has remained under exploited due to predominantly developing nature of the region rendering movement of money difficult in many countries during 1990s. With penetration of 24/7 Internet and better technology, operators of gambling web sites are now closely following developments in the Asian gambling market with eager interest.
With exceedingly reliable infrastructure and high Internet penetration rate, Japan is all set to be the next online gaming powerhouse. Japan is witnessing high popularity of sports gambling coupled with backing of the ruling government, which is apparently keen to reap the economic benefits of the lucrative entertainment industry. China and Malaysia are also highly lucrative considering the statistics claim twice as many takers in the countries for online gambling, than online shopping. Singapore is an optimistic candidate to become the online casino hub for the region, as the country is issuing problem-free online casino gaming licenses. Further, Philippines has fully legalized online gambling, rendering it fertile ground for the industry.
Internet gambling has taken a new turn – west to east. Will it change this budding industry all together or give it a new fertile ground, lets keep our fingers crossed.
Related posts:
- How does the Internet Gambling Prohibition and Enforcement Act affect US gamblers?
- Congress Passes Online Gambling Ban – UK Shares Fall
- How does the Internet Gambling Prohibition and Enforcement Act affect Sports Betting operators?
- Major League Sports and Gambling
- Sports betting for US players
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