The US effectively banned online gambling with a new law earlier
this year, and Caborn and Culture Secretary Tessa Jowell outlined
plans to welcome internet gambling companies to the UK and to
regulate them.
Jowell criticised the US's stance, saying that the UK will not
follow suit. "We do not support the approach the United States has
taken," she said. "The enormous risk of prohibition is that it
forces the industry underground."
Making unfavourable comparisons to the US's experience with
alcohol prohibition in the 1920s, Jowell said that the UK would
instead regulate the industry. She said that outlawing it risked
driving online betting consumers into criminal hands.
The politicians were speaking at a summit of international
delegates who agreed a framework to regulate the industry, agreeing
protection for gambling addicts and plans to stop underage
gambling.
The Department of Justice in the US had long considered the 1961
Wire Act to outlaw all internet gambling, but a new law, which was
rushed through under cover of a port security act, made it illegal
for financial institutions to process payments to gambling
sites.
The impact on UK-listed gaming companies was severe. Share
prices nosedived and Sportingbet sold its US business for one
dollar, claiming that it released the company from $27 million of
liabilities.
Speculation has mounted in recent days that 888 and PartyGaming
would merge, and Ladbrokes has also been linked to a bid for
888.
Two British senior executives of online gaming companies had
been arrested in the US prior to the passing of the new law. Though
Peter Dicks of Sportingbet was released, David Carruthers from
BetonSports still awaits trial.
Caborn said that despite attempts to attract further business to
the US, the UK would still respect extradition requests from the US
in relation to online gambling. "People have to abide by the laws
of particular countries," he said. "We will not acknowledge people
who operate illegally."
The US was said by industry sources to account for at least half
of the revenues earned by online gambling worldwide. $6.7 billion
of the $30bn spent every year is spent in Europe, according to UK
government figures.
