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Internet Gambling: European Firms Should Gain Access to US Again

Written by:
Jenny Woo
Published on:
Jun/30/2009

Continuing my lengthy conversation with iMEGA chief, Joe Brennan, Jr., I asked about the potential for European Internet gambling firms, the likes of Paddy Power, William Hill, Ladbrokes, etc.., to break into the US market should online gambling one day be legalized.  

JENNY:  Do you see an environment where the US Government shuts out European i-Gaming firms, whereby they might want to allow the guys in Costa Rica to take U.S. customers knowing they can collect taxes from a number of those operations?  Overall, can you see the US Government setting up a licensing arm to ensure most of the monies derived from i-Gaming stay in the U.S. as opposed to going to Europe?  Could iMEGA ultimately become a licensing arm similar to the Kahnawake?

JOE:  Well two things:  I think you will see - if Congressman Frank's legislation is successful - the establishment of a U.S. based and U.S. licensed online gaming industry.  And I think that that's entirely appropriate.  Now, how that may affect European gaming companies?  More than likely they would open U.S. based and owned subsidiaries.  I imagine that this has been part of their game plan for a long long time; so that will come as no surprise to anybody.  But also, you'll see the U.S. gaming companies building for the future in online gaming because they think that they can potentially dominate in that field.  Now, right now they have Mr. Garber set up in Montreal but it's a relatively cheap plane ride to Las Vegas (haha) from Montreal to establishing their divisions headquarters here.  So absolutely - I do not think that you'll see operators being granted a license without having a corporate interest in presence here in the United States. 

JENNY:  What's your prediction as to where we will be exactly 12 months from now on20both the federal front and the state front, assuming also the recession stays as is or worsens.  

 JOE:  So now I'm looking into my crystal ball? (Haha)

JENNY:  Yes!  Come on, I thought you had one of those Joe.  (Haha)  Doesn't everybody?

JOE:  No.  I have one of those 8 balls that you shake up and the little diamond thing in there says, "This will be so."  "Yes it is true."  Or "Give it up buddy.  It 's a lost cause."    (Haha)

JENNY:  We're in a recession right now.  In your opinion, where do you see this going both on the federal and state front 12 months from now?

JOE:  Two separate issues obviously because the state of the recession and the state of the economy will not determine the outcome of our challenges in federal court.  And again, that's why we've gone the court route because that's where all the external factors are blocked out and there's only focus on the law.  It's funny - I always find that the Europeans don't really understand the nature of our government because they just don't seem to be able to get or accept the power of our court system; where yes - Congress can pass a law but if they pass a bad law and the courts judge it to be so - the courts void the law.  I remember a lot of people saying to me (with British accents), "Oh yeah sure.  That works until George Bush picks up the phone and calls the judge or Congress tells the judge you can't do that."  And I have to try and explain to them, "Well every one of those are a violation of  "separation of powers" and they would never do that.  Even if they did, a judge would tell them to go get stuffed."  But that philosophy - the three parts of our government and how they all check and balance each other just does not seem to register with our European counterparts because their court systems are relatively weak. 

Now having said that, it's my hope that a year from now that legislatively Congressman Frank has either won, found enough support for his existing bills and move forward.  Or number two:  has the opportunity to amend his bill - rewrite his bill to reflect the fact that the "Unlawful Internet Gambling and Enforcement Act" was overturned by the U.S. 3rd Circuit Court of Appeals.  That would significantly - I think - strengthen his hand and the hands of those in Congress who would push for a firmer legislation that legalizes it and creates a licensing structure and a taxing structure.  And probably most importantly for all of this is consumer protection structure because at the end of the day we agree with an awful lot of what the people on the other side of this issue feel strongly about.  I'm a father and I don't think kids should be gambling online or offline.  The number of kids I saw in the casino last night to me was utterly frightening.  (Haha) We think that people who have problems with gambling should be helped - they should be monitored.  Perhaps the best way of doing that is to have them doing it online in a way where they can be tracked and their financial status can be monitored and constantly updated so we know whether these people are overextending themselves; they can cut them off.

Jenny Woo, Gambling911.com Senior International Correspondent 

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