Europe Unleashes Online Gambling to Fill Coffers

Editor’s Note: Can the United States be very far behind?

July 27, 2010: summarized from the New York Times -- PARIS — Across Europe, cash-strapped governments looking for ways to reduce yawning budget gaps are embracing online gambling, a source of revenue they once viewed with wary skepticism.

While U.S. opposition to Internet betting has centered on concerns about gambling addiction, European politicians previously objected for a different reason: liberalizing the practice, they feared, would undermine state-sponsored lottery monopolies and gambling operators.

But more and more gamblers are spurning land-based casinos anyway, and logging on to Internet poker and sports betting sites — many of them based in places that are out of reach of tax collectors. As public finances worsen, governments are trying to bring this once-shadowy business into the mainstream of Europe’s digital economy, where it can be regulated and taxed.

“What’s happened is a realization that you can’t uninvent the Internet,” said David Trunkfield, a consultant at PricewaterhouseCoopers. “People are gaming online. You either try to regulate and tax it, or people are going to go to the offshore operators, where you don’t get any revenue.”

France, which only four years ago jailed the top executives of an Austrian Internet gambling company, Bwin, when they visited France, last month permitted private companies like Bwin to start taking bets online, in competition with publicly owned gambling sites. Denmark approved legislation in June authorizing a similar shift. Greece plans within weeks to introduce a bill legalizing online gambling, which is currently banned.

Others considering liberalization include Switzerland, Spain and Germany. They are all following Britain, which in 2005 became the first big country in Europe to confer respectability on the business, and Italy, which has been phasing in legalized Internet betting over the past three years.

Meanwhile, lawmakers in several U.S. states, including New Jersey, California and Florida, have independently floated proposals for legalizing some kinds of online gambling, taking advantage of what supporters call a loophole in the 2006 federal law, potentially permitting such activity as long as it does not cross state borders. So far, however, no U.S. states have actually gone as far as British Columbia, in Canada, which has legalized some kinds of online gambling.

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