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Turkish Ban Does Little To Stop Online Gambling
3/29/10 - The weekend saw the publication in the Sunday Zaman publication of an interesting article on Internet gambling, and the fight which European betting groups are waging against a government ban on the pastime imposed in 2006.
The ban included playing online gambling games and made it illegal for firms to provide these services to Turkish citizens under domestic law. Turkish banks and credit card companies were also enjoined not to facilitate transactions with Internet gambling sites.
One company resisting the ban is the publicly listed Swedish online gambling operation Betsson. Speaking to the Sunday Zaman, Turkish legal expert Gökhan Ahi said that despite the law clearly stating that it is illegal to play or provide online gambling, firms like Betsson continue to evade Web filters to provide Turkish citizens with access to games.
For Betsson, circumventing filters and continuing to provide services to Turkish residents are risks worth taking, the article points out - over 26 percent of its considerable revenues come from Turkey, according to a report by Goldman Sachs.
Swedish analyst Martin Arnell said that shutting down Turkish operations could make a serious dent in Betsson's earnings and share prices, due to the significant amount of online business that it continues to attract from the country.
The large UK online gambling company Sportingbet is another player in the Turkish online market, despite clashes in 2008 (see previous InfoPowa reports) which saw two of its employees detained by police. Although the company has scaled down its Turkish operation, it is still active in the market, claims Arnell
“They could be saying and reporting that they are leaving, but they are still there,” the analyst told Sunday Zaman, which noted that the company's SuperBahis website was still online and accepting bets for football matches.
Betsson argues that its Turkish activities are completely legal according to European Union principles of free movement of goods and services, even though sources both in the government and the gambling sector have expressed a contrary opinion.
In its year-end financial results, however, Betsson, in reference to Turkey’s anti-online gambling regulation, states, “According to legal experts, the [Turkish] law is in breach of EU law and less conformable with the association agreement between EU and Turkey.”
Arnell disputes this, claiming that Turkey is not yet an EU member, and that Betsson therefore has no legal backing for providing services to Turkish citizens. “They know that the authorities think that what they are doing is wrong,” Arnell stressed.
Fredrik Rüdén, the CFO of Betsson’s administrative office in Stockholm, argued that Betsson could provide gambling products to Turkish citizens because its gambling operations are run from Malta. He stressed several times that Betsson has no physical presence in Turkey and that what they were doing was legal.
When asked if Betsson, much like SportingBet, would gradually close up their virtual shop, Rüdén continued to affirm that what they are doing is legal. “If we had operations in Turkey, then we would consider [closing].” When reminded about the two SportingBet employees who were arrested after coming to Turkey for vacation and then asked about whether he would come to Turkey, he hesitantly replied with, “I am not sure if I would do that.”
Sunday Zaman reports that the Turkish Information Technologies and Communications Board (BTK) went after Betsson’s site and banned access, but Betsson evaded the filter by continuously changing IP addresses, making it nearly impossible for the authorities to stop access.
"At the time of writing, Betsson had added the digits 509 to the end of its URL," Zaman reports. "Ahi stated that this number would change constantly: 'When the BTK would block 310, they would default to 309, and if that was blocked, they would quickly change to another number.'
"Ahi reiterated the difficulty for the Turkish authorities to block such sites due to the complexity of the Internet and stated that companies like Betsson would do whatever is necessary to make sure that their illegal and enormous revenues are not hindered by technological barriers. Even with the banking restrictions, Ahi noted that gamblers increasingly use one-time-use debit cards that can easily be used on these Web sites without much difficulty."
Although Turkey is currently in the accession period, it is not yet a full-fledged EU member.
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