“There
is no likelihood that within the foreseeable future any
of the 15 Internet and phone-line gaming companies registered
in Gibraltar will pull up stakes and move their operations
elsewhere,” he told me at the Royal Bank of Scotland’s
recent dinner for the local gaming industry.
“There have been several senators on Capitol
Hill who have tried to introduce bills restricting
Americans’
ability to place their bets outside the US, but after making
a little headway, each time these have been turned away”
Ballester pointed out. “What they are actually attempting
to do is to deprive American citizens of their freedom of
choice.”
“Gaming was invented by man for
man and everyone should have freedom of choice about it.
In a way it’s like smoking or drinking — things
which can lead to abuse, but which people should be allowed
to make up their own minds about. “America
has been through that sort of process once before…
when it introduced Prohibition in the 1920s. That didn’t
work and in fact it led to massive organised crime in the
era of the bootleggers. Rather than attempt to shut down
on internet gaming — and, let’s face it, e-commerce
is not only here to stay but also to expand — the
US authorities should be looking at ways to regulate its
industry at home.”
Ballester — who has been involved
in gaming in Gibraltar from the nascent days of its first
bookmaking office, the establishment of the casino and the
first internet poker and sports betting operations —
is clearly as bullish as Chief Minister Peter Caruana about
the future of gaming on the Rock.
Caruana, who was guest speaker at the
RBS dinner, told the 80 guests from banks and betting that
Gibraltar had carved out an incredible niche — “on
the frontiers, the Wild West of the gaming industry”
— to become “one of the planet’s foremost
jurisdictions in an industry of the future.”
Nevertheless, the Chief Minister turned
down an invitation after the dinner to join the bankers
and gambling executives in buying £100 worth of chips
to play poker for charity… He assigned that duty to
his Deputy Chief and DT&I Minister Joe Holliday. (Surprisingly,
given the fact that Internet poker games are one of the
fastestgrowing sectors of the gaming industry, many confessed
— or at least claimed! — not to know how to
play poker. Holliday, coincidentally, acquitted himself
well).
Gibraltar’s success in attracting
and keeping major internet and telephone gaming companies
stemmed from its choosiness in the companies we allow to
register here, Caruana told the diners. Because the companies
had been “hand picked and the vast majority of applicants
turned away”, it had been possible to establish a
self-regulated industry which was not only in a notional
partnership with the Government, but shared with the Government
its desire to protect its reputation “as much as to
protect the reputation of your own companies.”
It was this which had helped the Rock
attract two of the world’s top gaming companies, Party
Gaming and 888, while the two original players, Ladbrokes
and Victor Chandler had sown the seeds of an industry which
now employed 15,000 people — or almost 10 per cent
of Gibraltar’s active labour force. It also contributed
“up to £10 million a year to the Government
in one source or another,” he added.
Refering to the local industry’s
“willingness to grasp the highest standards”
in terms of business and legislation, Caruana stressed that
the International Monetary Fund team (which left the Rock
the weekend previously after auditing our anti-money laundering
(AML) and other regulatory efforts) had been “hugely
impressed by our legislation in the Gambling Bill —
not jus
t
in terms of AML, but generally.
“It is a piece of legislation that
I am sure others [jurisdictions] will copy for it provides
the perfect balance between statutory legislation and business
being encouraged.” Again his views were echoed by
Ballester, who told me: “The IMF was more than happy
with our provisions — legislation achieved through
close cooperation between the Government and members of
the industry.”
IMF approval has particular significance
at a time when the Gaming Association has written to the
European Commission complaining about the Italian Government’s
unilateral decision to bar Internet Service Providers (ISPs)
from providing access to on-line gaming companies outside
Italy. If, at any stage, the complaint has to be taken further
it will be important that our local industry retains its
“whiter than white” image, Ballester says. “I
can speak for the local industry when I claim that we want
to be whiter than white and want the customers to get a
fair deal,” he says.
Under a new finance law which came into
force at the beginning of the year, Italian internet service
providers can be fined 180,000 Euros every time they allow
someone to bet with any of 684 ‘blacklisted’
companies.
The Association’s complaint against
this — echoed by Malta and other jurisdictions which
host Cyberspace gaming — also coincides with the EC’s
decision to initiate infringement proceedings (a form of
legal action) against seven member states in a drive to
open the betting market across the 25- nation European Union.
Most of the seven countries — Italy, Germany, Finland,
Sweden, Denmark, Hungary and the Netherlands — run
successful state-owned betting monopolies or sheltered sports
betting operations… and create obstacles to foreign
firms attempting to enter their markets.
(Betting was excluded from a recent European
directive aimed at encouraging cross-border competition
in various “fringe” financial services. But
the EU’s Internal markets Commissioner Charles McCreevy
has got round this attempted exclusion “by taking
the legal path,” I was told. States can be taken to
the European Court of Justice unless they comply with the
Commission’s requests.)
“How disappointing that countries
preaching free trade… throw up barriers when other,
smaller countries do better than them,” Caruana said
of the US and Italian moves. And he warned that: “If
countries throw up barriers a la carte it won’t stop
there. They will move into other areas of e-commerce and,
eventually, will bring about the collapse of Internet business.” But
he believed that the moves would fail because “not
even the US can swim against the tide that the Internet
is, and which is unstoppable.”
