US online gambling laws get tighter

The global online gambling industry has been dealt a severe blow by news the lucrative US market will be put even further out of reach by strict new legislation.

A law which currently bans interstate gambling has been extended to include a ban on online gambling.

In a unanimous vote, the House Judiciary committee on crime agreed to update the 1961 Wire Act, which forbids interstate wagers, so it includes the internet and other electronic forms of communication.

Bob Goodlatte, the Republican sponsor of the changes, said the legislation is required because the US needs to stop offshore gambling sites siphoning off billions of dollars from US homes.

Dan Stevenson, analyst at Jupiter MMXI, said: "This law has massive implications for online casinos. If the US enforces the revised act, bookmakers over here won't be able to take US bets."

Sportingbet, a company based on Alderney in the Channel Islands took an average of £22,000 from each of its individual US-based customers during the year ending March 2001, compared to just £5,100 from EMEA customers.

Stevenson said: "Online gambling outside the US will have to look at the Far East and other markets to make up lost revenues. It'll be tough for companies like Sportingbet as they have a heavy investment in the US already."

Charlotte Kearney, solicitor at law firm Bristows, said: "This marks a stark difference between US and UK laws. At the end of last year the UK government's Budd report looked at opening up online gambling laws in the UK, to benefit casinos by putting more deregulation in place.

The bill will allow law enforcement agencies to take sites off line if they do not comply with the revised legislation.

If sites are located outside a law agency's jurisdiction, the agency can force credit card companies and other finance organisations to stop transactions or make US ISPs bring the site down and stop advertising companies working online on the site's behalf.