INTERNET GAMING MRS. AMINA MAKNOON

DIRECTOR OF LEGAL SERVICES BETTING GAMING AND LOTTERIES COMMISSION

What is Internet Gaming?

‘The term internet gaming is often used interchangeably with internet or online gambling and refers to all forms of gambling (including wagering) via the Internet, including gambling using computers, mobiles or wireless devices connected to the Internet. Interactive gambling is a slightly broader term, although again often used interchangeably with Internet gambling, and includes other forms of remote gambling generally conducted via digital means such as digital television.’

‘Gamblers typically upload funds to the online gambling Web sites via electronic payment services or wire transfers, play games either with each other (poker, sports betting) or against the house (blackjack, roulette), and withdraw any winnings by check or online payment service.’

GLOBAL STATISTICS

• ‘the online gaming market represents one of the fastest

growing segments of the gambling industry’

• Despite the political and legislative restrictions, in 2009 the market

already produced more than US$20 billion in worldwide

revenue and is projected to grow to over US$40 billion by 2015.

Sources:

KPMG International, ‘Online Gaming A Gamble or a Sure Bet?’ 2010

H2 Gambling Capital, eGaming report, July 2009

Statista 2014

Internet Gaming

To be or not to be?

Factors Contributing to the Expansion

The legalisation of internet gambling in several countries worldwide eg: the UK;

The inherent and increasingly apparent difficulties in its prohibition;

The opening of new potentially lucrative markets in Asia;

Further advances in technology and increasing accessibility of the internet;

Increased confidence in online financial transactions;

The economic crisis - governments of both developed and developing countries have started to consider the potential of internet gambling to bring in much needed revenue into their coffers.

Technology Intensive

The Internet gambling industry now creates the greatest demand for technology such as software development and broadband access. Every advancement in technology invariably reflects itself in the Internet gambling environment. ‘The high resolution 3D graphics, text messaging and chat features, realistic depictions of natural and man made features, are very important…for the realistic look and feel of virtual casinos, card games and horse races’.

Source: I. Nelson Rose and Martin D. Owens Jr., Internet Gaming Law, at page 103

Types of Internet Gambling

Internet Gambling includes a number of different types of games, each with its own business models and technology

online bingo

online lottery

sports betting

online poker

online casino games including slot machines and traditional casino games

Policy Considerations

Problem gambling;

Protection of minors;

Anti-money laundering;

Cybercrime and cyber-security;

Jurisdictional and taxation issues

Problem Gambling

The convenience and accessibility of internet gambling as well as the detached nature of the internet may leave gamblers with no tangible representation of the amount of money they are gambling.

The evidence “does not support the speculation that Internet gambling has an inherent propensity to encourage excessive gambling among a large proportion of players.” However, it is widely accepted that, whilst the increase in gambling opportunities may not create more pathological gamblers, it does exacerbate pre-existing pathological issues.

Technology, provides operators with more sophisticated methods to track individual transactions … therefore allows for studies of players’ real behaviour and the effective monitoring and control of problem gambling

Protection of Minors

Age Verification Software

Additional level of verification by financial

institutions

Controls on marketing and broadcasting of internet

gaming

Anti-Money Laundering

The realities of Internet technology make it highly unlikely that Internet gambling sites increase the risks of large scale money laundering

Layering and integration is extremely challenging in an environment where records of wagers, bets, results and payouts must be kept for business purposes or compliance with regulations in those jurisdictions where Internet gambling is licensed

Collusion between player and operator

Cybercrime and Cyber-security

Operator

The house can manipulate its internet gambling software to change the odds associated with the game.

Player

The online gambler can commit cybercrime in the internet gambling world in two main ways: either by manipulating the odds in the player’s favour or by targeting the assets of the online venue itself by stealing the credit card information of its customers

Jurisdictional Issues

Locally licensed internet gambling operators

offering their services to residents of other

jurisdictions

Overseas licensed internet gambling operators

offering their services to local residents

Taxation How ?

Whom ?

What Rate ?

UK Model Taxation based on point of

consumption

15% of gross profits

The Legal Framework in Jamaica

BGL (Amendment) Act 2010 incorporated the following definitions:

‘Electronic’

‘Electronic ticket’

‘Electronic betting’ and ‘online betting’

Amended definition of ‘lottery’ to include ‘any electronic game, method or device’

The Legal Framework in Jamaica

However, apart from the sale of bets and lottery tickets over the Internet, the BGLA does not specifically sanction other forms of Internet gaming such as Internet poker, traditional casino type games or electronic gaming (slot) machines (‘EGMs’).

Next Steps (1)

Effective regulatory framework for Internet gambling in the limited form of online betting and online lottery sales

Sample Requirements for Operators:

Dedicated player accounts;

Measures to promote responsible gambling by players

Measures to protect minors

Compliance with AML/ CFT requirements

Compliance with technical standards

Compliance with cyber-security standards

Next Steps (2)

Research and consultation process into other forms of internet gambling products, such as online bingo, poker, traditional casino games and EGMs to make policy recommendations to the Minister.

BGLC and CGC integral to this process

PARTING THOUGHTS

Prohibitionist stance on internet gaming is:

Unworkable

Anomalous

Leaves players and vulnerable groups unprotected

Loses a significant source of revenue

Internet Gaming To be continued…