1 North American Gaming Regulators Association 2009 Annual Conference Washington, D.C. Hot Topics in...

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North American GamingRegulators Association

2009 Annual Conference2009 Annual ConferenceWashington, D.C.Washington, D.C.

Hot Topics in InternetGambling

Michael D. Lipton, QCJune 3, 2009

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Timeline of Growth of Internet Gambling

© 2007 Dickinson Wright PLLCAll Rights Reserved

• 1995 – first internet gambling website introduced.• 1996 – Antigua & Barbados and the Kahnawke

Territory (Canada) establish regulations authorizing i-gambling.

• 2005 – the United Kingdom Gambling Act 2005 authorizes i-gambling.

• 2006 – U.S. enacts UIGEA, ostensibly to block payments by financial institutions to i-gambling sites.

• 2008 – estimated 2,800 i-gambling websites operating.

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Economic Growth of Internet Gambling


• 1997 – estimated $300 million in revenue

• 1998 – estimated $651 million in revenue

• 2001 – 2007 – i-gambling grows from an estimated $3 billion to a $20 billion industry.

• 2009 – estimated $22 billion in revenue.

Source: Christiansen Capital Advisors, LLC.

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Regulatory Models


• Licensing and active regulatory models:– United Kingdom – robust regulation of operators and allows

residents to place online wagers.– Australia – regulation of operators, but generally prohibits

residents from placing online wagers.• Payment blocking:

– United States (UIGEA).– Norway– The Netherlands

• Criminal prohibitions– Viet Nam

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Current Developments: E.U. WTO


• Antigua awarded ~ $21 million annually as a result of its World Trade Organization challenge to UIGEA.

• European Union formally studied complaints from domestic i-gambling operators that UIGEA discriminates in favor of U.S. gaming industry.

• March 2009, European Union announces intent to commence World Trade Organization proceeding with respect to UIGEA.

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Internet Gambling in the U.S.?


• Congressman Barney Frank tries again! Introduces the "Internet Gambling Regulation, Consumer Protection, and Enforcement Act" ("IGREA") (H.R. 2267)

• IGREA already has 23 co-sponsors

• Senator Robert Menendez (D-N.J.) expected to introduce similar legislation in the Senate.

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Internet Gambling in the U.S.?


• Challenges to enacting IGREA:1. Opposition from NFL, NHL, MLB, NBA and the NCAA despite

IGREA excluding sports betting from the permissible wagering activity.2. Games of skill vs. games of chance – IGREA would authorize all

gambling games; pragmatic observers suggest that a bill authorizing only poker or card games ("games of skill") has the best chance of passing.

3. Opt-out or opt-in – IGREA creates a regulatory system requiring States and Tribes to "opt-out" if want to ban i-gambling; States and Tribes may prefer an "opt-in" approach.

4. Federal regulation vs. State regulation – IGREA establishes a federal regulatory scheme (could delegate to States, but feds can still override); States likely to push hard to have any regulation at the State level and not at the federal level.

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Contact Information


Michael D. Lipton, QC

Dickinson Wright LLP

120 Adelaide Street, Suite 2107

Toronto, Ontario M5H 1T1

e-mail: [email protected]

Tel: (416) 367-0874

mailto:[email protected]

1 North American Gaming Regulators Association 2009 Annual Conference Washington, D.C. Hot Topics in...

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