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Mon, Jun 28, 2004 - Page 12 News List

Gaming companies want legal online bets

REGIONAL PROBLEM Illegal Internet betting amounts to 80 percent of the Asian betting industry and companies want governments to curb underground bookies

AFP , SINGAPORE

As underground bookies in Asia increasingly look outside the region for online gambling licenses, big gaming companies are urging Asian governments to fully legalize Internet betting.

The Asian betting industry rakes in about US$100 billion annually, 80 percent of which comes from illegal transactions, according to the managing director of UK-based online betting company BetFair Asia, Tim Levene.

"There is absolutely no doubt that the illegal market is a hundred thousand times bigger than the existing legal market," Levene told a gaming conference in Singapore last week.

"From a governmental point of view, and I think if you spoke to authorities, it is a nightmare to manage."

The president of gaming consultancy firm Playtech's Asia Pacific division, Tom Hall, said that underground bookies in Asia are voluntarily seeking government regulation by trying to acquire licenses to set up gaming Web sites.

But because independent gambling operations have not been legalized across most of Asia, these bookies are instead looking towards countries such as Antigua, Costa Rica and Curacao for their licenses, Hall said.

"They don't have to live there to get a license. They have to set up their servers and computers and a small part of their staff in those countries, but most of the operations take place in their own countries," he said.

Online gaming is still a legal grey area in most Asian countries except Hong Kong, where legislation forbids punters to bet with anyone except the Hong Kong Jockey Club.

Hall said the Cagayan Economic Zone in the Philippines is the only jurisdiction in Asia that is allowed to publicly issue "interactive gaming licenses."

But because the legislation is still new, it has not yet begun granting licenses.

Hall and other pro-gaming advocates said that if governments do not start regulating the market soon, they will continue to lose out on tax revenue while doing little to control the explosive growth of underground sports betting.

For example, Hall said the ongoing European football championships are pulling in twice as much in underground betting revenues as the 2002 World Cup.

And on an average weekend during the European soccer season, the eight or nine major underground bookies in Asia make about US$150 million each, he added.

Asian governments are showing increasing signs that they are prepared to relax their anti-gambling attitudes, with Thailand and even Singapore's conservative government considering allowing casinos on their territories.

But BetFair Asia's Levene reflected industry sentiment in expressing frustration about the pace of change.

"Just to get governments to talk about this is the greatest challenge," he said.

"If you could tell the government they need to have no expertise in sports betting, no expertise in technology, no massive investment and you could eradicate illegal gambling overnight, you would think most governments would take it right out of your hands."

And Levene claimed that as the Asian betting industry grows, the lack of regulation in the market will prove to be an increasing problem for governments.

"There are higher incidences of problem gambling in countries where there is little regulation. The longer you leave it unregulated, the more crime becomes a problem," he said.

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