Associate City Editor (Filed: 09/02/2004)
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2004/02/09/cnbet09.xml&menuId=242&sSheet=/money/2004/02/09/ixcity.html
Senior American politicians have canvassed the UK Treasury for its views on whether the US should ban its citizens from gambling over the internet.
Sure thing: Sportingbet took $16m of bets on the Super Bowl, including $14.8m from US punters
The move has been taken by some leading betting industry figures to signal a potential change of attitude in America, potentially opening up the $20 billion a year US online market.
With the exception of horse-racing in California, American nationals are not allowed to place internet bets. Despite this, American citizens account for half the $40 billion a year internet gambling market, betting via offshore sites.
US politicians, egged on by religious lobby groups, have repeatedly attempted to close this loophole, so far without success. In a new twist, Congressman John Conyers from the House of Representatives' Judiciary Committee recently wrote to Chancellor Gordon Brown requesting his views on banning US citizens from making internet bets with companies outside the US.
John Healey, economic secretary to the Treasury, replied, referring to the Government's new Gambling Bill, and stressing the Government did not support such a ban. He said: "Online and telephone betting is already well established as a legal activity in this country . . . In going forward we have decided that it is better to regulate and control this activity rather than seek to prohibit it." He added that "online gambling brings with it an international dimension".
Sportingbet is the only British bookie to make a major part of its income - more than 50pc - from US internet gambling. It took $16m of bets on this month's Super Bowl, up 33pc, including $14.8m from US gamblers. Some investors have shunned its shares, fearing such business is illegal. However, chief executive Nigel Payne said "it's a grey area".
He added: "If you accept that an internet transaction takes place where the individual resides rather than where the accepting business resides then gambling on the internet may be illegal under The Wire Act," which the US passed in the 1960s. Sportingbet has exploited this loophole with an offshore site in Costa Rica.
Mr Payne said some US politicians have realised that such sites are costing America billions a year in lost tax revenues. He added that he expected them to introduce "a permissive Bill in March or April".
In the meantime, he believes the Treasury is making a play for online betting tax revenues by encouraging companies to Britain, where they pay corporation and other taxes. "We believe that this is a Treasury-driven strategy because there is first-mover advantage for tax," he said.
Other bookies remain cautious. David Harding, the William Hill boss, said he would not take bets out of America until the legal situation was clear, but added: "I don't think prohibition works. There's a massive illegal gambling market in America and it's missing out on the tax revenues."
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2004/02/09/cnbet09.xml&menuId=242&sSheet=/money/2004/02/09/ixcity.html
Senior American politicians have canvassed the UK Treasury for its views on whether the US should ban its citizens from gambling over the internet.
Sure thing: Sportingbet took $16m of bets on the Super Bowl, including $14.8m from US punters
The move has been taken by some leading betting industry figures to signal a potential change of attitude in America, potentially opening up the $20 billion a year US online market.
With the exception of horse-racing in California, American nationals are not allowed to place internet bets. Despite this, American citizens account for half the $40 billion a year internet gambling market, betting via offshore sites.
US politicians, egged on by religious lobby groups, have repeatedly attempted to close this loophole, so far without success. In a new twist, Congressman John Conyers from the House of Representatives' Judiciary Committee recently wrote to Chancellor Gordon Brown requesting his views on banning US citizens from making internet bets with companies outside the US.
John Healey, economic secretary to the Treasury, replied, referring to the Government's new Gambling Bill, and stressing the Government did not support such a ban. He said: "Online and telephone betting is already well established as a legal activity in this country . . . In going forward we have decided that it is better to regulate and control this activity rather than seek to prohibit it." He added that "online gambling brings with it an international dimension".
Sportingbet is the only British bookie to make a major part of its income - more than 50pc - from US internet gambling. It took $16m of bets on this month's Super Bowl, up 33pc, including $14.8m from US gamblers. Some investors have shunned its shares, fearing such business is illegal. However, chief executive Nigel Payne said "it's a grey area".
He added: "If you accept that an internet transaction takes place where the individual resides rather than where the accepting business resides then gambling on the internet may be illegal under The Wire Act," which the US passed in the 1960s. Sportingbet has exploited this loophole with an offshore site in Costa Rica.
Mr Payne said some US politicians have realised that such sites are costing America billions a year in lost tax revenues. He added that he expected them to introduce "a permissive Bill in March or April".
In the meantime, he believes the Treasury is making a play for online betting tax revenues by encouraging companies to Britain, where they pay corporation and other taxes. "We believe that this is a Treasury-driven strategy because there is first-mover advantage for tax," he said.
Other bookies remain cautious. David Harding, the William Hill boss, said he would not take bets out of America until the legal situation was clear, but added: "I don't think prohibition works. There's a massive illegal gambling market in America and it's missing out on the tax revenues."
