LIBERALISED U.S. ONLINE GAMBLING UNLIKELY TO BE AN EASY MARKET

Top online gambling executives made some sobering comments in discussions at the Gaming Executive Summit in Madrid this week which examined the possibilities of a liberated American online gambling market.
 
888’s CEO Gigi Levy predicted that the US will remain protectionist and restrict Internet gambling licences to US companies in the event that the country changes course to a more enlightened and regulated online gambling policy.
 
“The US will be protectionist even if it regulates, and its withdrawal from its GATS (General Agreement of Trade and Services) commitments means it doesn’t have to conform to any World Trade Organisation regulation on internet gambling," he opined.
 
Referring to moves at individual state level in the US aimed at liberating online poker, Levy added: “There are five other states we know of that are considering regulating online poker, and we know the licences will go to US companies,” without elaborating further.
 
Bwin co-chief executive Norbert Teufelberger, Playtech chief executive Mor Weizer and PartyGaming chief executive Jim Ryan all took part in a wide-ranging discussion that covered global issues impacting the online gambling industry.

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Ryan predicted that regulated online gambling will see major media companies and state monopolies becoming a significant competitive threat in the industry, perhaps more so than traditional corporate rivals.
 
He said: "The world is changing as regulation takes different shape in different markets. But upcoming regulation means new entrants and competition in the market, and I worry less about direct competitors such as those sitting on this panel than I do about government-licensed operators and major media firms targeting their power markets in the future.”
 
That said, Ryan commented further on direct competitors in online poker, observing that those rivals who still accepted US business presented formidable competition as they ploughed back huge profits into marketing elsewhere in the world,  and benefited from the significant player liquidity that the US market provided. He described this as a "humbling experience" for his company, but one which had motivated it to "improve our products and offers and to really up our game."
 
The high-powered panel seemed to agree that the global Internet regulatory model in the industry has been supplanted by a more regional-national approach as individual nations, especially in Europe, draw up protectionist regulations aimed primarily at keeping their markets to themselves.
 
Playtech's Mor Weizer said that this more restrictive and insular approach had enabled Playtech to become the number three poker network in Italy, filling the regulatory requirement for an Italians-only online venue.
 
Bwin co-CEO Norbert Teufelberger discussed the line between b2b and b2c models, emphasising Bwin’s commitment to the business-to-consumer approach.
 
“We believe the b2c model is what operators should be striving for," he said. "We will only do b2b agreements with select partners, and we do this through our sports content, which is unrivalled in the industry."