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Major Nations Now Debating Online Poker Legislation

Major Nations Now Debating Online Poker Legislation 0001

An old adage states that 'as the U.S. goes, so goes the world.' While the saying itself is increasingly untrue, the wake left by the America's passage of the Unlawful Internet Gambling Enforcement Act [UIGEA], finds several important countries now taking up the issue, in addition to those reported in recent weeks. Germany, South Africa, Spain and Italy have each seen developments connected to the regulation of online poker; Germany has been exploring the banning of Internet gaming in a manner similar to that of the U.S, while the other countries listed above have opened the door to online poker and similar pursuits, seeking to regulate and generate lawful revenue.

Representatives of German federal states met this past week to discuss the possibility of banning online gaming throughout Germany, broadening a ban already instituted in three states --- Saxony, Hesse and Bavaria. Reports indicate that blatant protectionism is the basis for the push, as it has been in other countries; these states run government-sponsored lotteries and are seeking to insulate those revenue streams from other gambling-related challenges.

However, the push runs contrary to the free-trade provisions agreed upon by member nations of the European Union, and countries where online poker is legalized and regulated have strong grounds to protest against these measures. Several large online-poker firms are incorporated in the United Kingdom, and other EU member countries, such as Austria and Sweden, also house online-poker concerns.

Yesterday, news also broke that EU member Spain will follow Italy's lead in loosening restrictions on online gaming. Italy's recent flip-flop from an early attempt to ban rather than regulate has already brought a boost to the Italian economy, with firms such as Ladbrokes and William Hill now in active application for Italian licenses. Spain has just announced that it will allow gaming in regulated locations, specifically including online ones, with the licenses good for five years and subject to regulation and renewal. Most of the largest Euro online-poker concerns are expected to apply for an official Spanish license.

While not part of the EU, South Africa is also considering legislation that will legalize online gambling companies. A version of that bill has just been approved by South Africa's Cabinet, and includes provisions attempting to license both online companies and online gamblers themselves, to ensure that both sides of the tax and regulatory equation are covered. South Africa had previously banned online gambling in a 2004 bill that included a time lag for enforcement and regulatory review, and it is out of that law that the recent bill has grown.

While every country in the world will likely be forced to address the issue of Internet gaming in the near future, and while the U.S. remains a giant in terms of market force and power, it may well be that the European Union member nations play the key role in deciding online poker's ultimate fate. Already, the European Commission, an EU regulatory body, is examining the restrictive measures posed by the German legislation above and by such actions as France's recent arrest of two executives of Austrian gambling company BWin. Many belive the BWin arrests to be an action that flies in the face of EU trade provisions.

Even though the measures were enacted before the rise of online gambling, EU regulations forbid state-sponsored monopolies and restrictive trade practices. In that sense, the struggle for control of online gaming threatens the very structure of EU trade agreements themselves.

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