"Relaxed" Canada a haven for unregulated on-line casino operators

Canada attracts on-line gaming industry assoc. by shrugging while US talks of regulating

By: Lanny Boutin

  VANCOUVER: Canada's relaxed rules make it so attractive to operators of on-line casinos, that the Interactive Gaming Council (www.igcouncil.org) - an industry group that promotes on-line gambling - moved its headquarters here from the US in 1999.
  On-line casinos represent a rapidly-growing and virtually unregulated way for people - especially youth - to lose money.
  Vancouver also happens to be the home of James Chu, who has built up an on-line gambling empire since opening his first site Cyberbetz (www.cyberbetz.com) in 1997. Chu's company GIC Global Intertainment Corporation reported wagering revenues of $3.9 million dollars for May, of 2000. The site is licensed in the Commonwealth of Dominica.
  There are close to 1,400 on-line Internet gambling sites up and ready to take your money. Christiansen Capital Advisors estimates Internet gambling expenditures for 2001 will top $3 billion dollars; by 2003, they will double to $6.3 billion.
 

Antigua - population 65,000, with 100 registered on-line gambling sites - charges $75-100,000 dollars to register a site

  "It is a criminal offence to run an Internet gambling site in Canada," notes David Hennig, communications director at the Alberta Ministry of Gaming. The law only effects the physical location of the website, though. A lot of Canadian firms sidestep the law by running on-line gambling sites through gambling servers outside Canada, and many others supply on-line casino equipment, especially software.
  In the US, the federal government is attempting to prohibit on-line gambling with the Internet Gambling Prohibition Act (S. 692), which would prohibit on-line gambling except for horse and dog racing or for state lotteries, Indian bands or hotel-casinos. Canadian politicians and consumer advocates appear slow to click to the dangers the industry poses, with young most at risk, and no such activities are going on - a major reason why the Interactive Gaming Council moved here.
  The Council's executive director Rick Smith, told Straight Goods in an e-mail letter that the organization moved here because "there are several IGC members in Canada, some in Vancouver... There was also the Goodlatte/Kyl attempts in the USA to prohibit this form of gambling. I would suggest that 'international' ease of access also impacted on the selection of location."
  Opponents of the US bill stress that probations have historically been ineffective. "To ignore emerging challenges is irresponsible," notes Smith, who heads the worldwide umbrella group for the on-line gambling industry. His group publicly advocates industry regulations, similar to those for land-based casinos.
 

The convenience, easy access and social acceptability of on-line gambling make it more dangerous than traditional gambling

  A review of on-line gambling in Australia, www.aph.gov.au, recommended that government and industry develop strict regulations. Great Britain's Gaming Board www.gbgb.org.uk agreed, saying "prohibiting online gambling in Britain would be neither sensible nor likely to succeed."
  Project South Africa noted, "Internet gambling is a dollar-earning export business." Antigua, a small island state southeast of Miami, with a population of 65,000, charges between $75,000 and $100,000 dollars to register an on-line gambling site. They have close to 100 registered sites.
  A recent report by The River City Group, an Internet research group that publishes the Interactive Gaming News, notes that 55 jurisdictions either regulate or tolerate Internet gambling.
  Canada's relaxed attitude was cited as one of the reasons that the Interactive Gaming Council moved its headquarters to Vancouver. Many Canadian firms run on-line gambling sites through gambling servers outside the country and many supply on-line casino equipment, notably software.
  Prince Edward Island recently opened their first on-line lottery. The Earth Future Lottery will raise money for charitable organizations and fund environmental efforts on P.E.I. Hennig knows of no provinces currently are looking into regulations for on-line sites.
  This laissez faire attitude could lead to problems. Many experts warn that the convenience, easy access and social acceptability of on-line gambling make it more dangerous than traditional gambling, especially for teens and young adults.
  Dr. Jeffery Derevensky, co-director of the Youth Gambling Research and Treatment Clinic at McGill University, found that four to eight percent of kids in the US and Canada have serious gambling problems. Another ten to fifteen are at risk of becoming pathological gamblers. Also, youth who played video games were at a higher risk of becoming problem gamblers. Most pathological gamblers start gambling before the age of fifteen, some as young as nine or ten.
  "Legal forms of gambling are prohibited for people under 21 in most states, (under 18 in Canada) but Internet sites have no way, often no will either, to check on the age of players," notes Dr. Sheila Blume, chair of the Committee on Treatment Services for Addicted Patients at the American Psychiatric Association.
  "Young people are comfortable with the Internet and the use of computers, so it is a natural medium for them," Blume says.
  The 1997 Survey of Public Participation in the Arts found that 72 percent of 18-24 year olds used computers an average of four hours per day.
  "Access to gambling is an important factor in developing problems," Blume says. A study by Dr. Peter Shizgal at Concordia University, published in the May issue of the journal Neuron, found gambling affects the same regions of the brain as cocaine or morphine.
  Experts expect the number of on-line gamblers to grow from 4 million in 1999, to 15 million by 2004. With the advance of the wireless web, some believe that figure could double.
  In the end, it might be the credit card companies who set the regulations. Gambler credit card fraud is common; many American branches of Visa and Master Card are limiting or completely banning the use of their cards on gambling sites.

Looking for more?
The 1999 National Gambling Impact Study - www.ngisc.gov.

American Psychiatric Association's advisory on Internet Gambling is available at www.psych.org

The Council on Compulsive Gambling of New Jersey - www.800gambler.org

The Interactive Gaming Council - www.igcouncil.org

Lanny Boutin is a freelance writer living in Gibbons, Alberta.

Posted: June 04, 2001

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