I-gaming

The convergence of the bricks-and-mortar and I-gaming worlds was inevitable, but who knew it would be this difficult? The European Economic Community hasn't come to terms yet with what to do with Internet gambling. Most member states want to protect their gambling monopolies by blocking foreign operators, but England wants to establish an open market across geographic borders. Betting companies, most prominently Ladbrokes, are challenging member states, particularly those in Northern Europe, and the battles have been taken to the E.U. courts. The Gambelli ruling in November confirmed that member states with legalized gambling must open up their borders, but also emphasized member states' rights to control the amount of gambling available for social reasons. Some thought the Gambelli ruling would mark the end of the border wars, but it appears to have marked the beginning.
A similar war is being fought in Australia, where the heavily populated states aren't too keen on Internet operators from less populous states chipping away at gambling revenues. Foreign operators with higher profit margins and lower tax rates, meanwhile, can offer better prices than state-licensed operators, and the states naturally haven't taken too kindly to them. Australia, thus, has championed its "Good Neighbor" policy, which calls for gambling jurisdictions to respect other jurisdictions' wishes to block foreign operators.
While "border control" is being blamed by some for stunting the growth of interactive gambling in Australia and Europe, it could be the key to opening up the U.S. markets. In all likelihood, any prohibition law passed in the United States would include a states' rights provision. The result could be legalized Internet gambling restricted to only those states that choose to authorize it.
The most effective method of keeping Internet gambling out of the United States over the last three years has been severing the flow of funds between consumers and operators. It still is, but the Department of Justice has found another strategy that has proven successful. The federal court in the Eastern District of Missouri in 2003 subpoenaed a number of Web site operators, radio stations and other media outlets carrying advertisements for I-gaming services, requiring them to turn over information related to the gambling ads dating back to 1997.
The investigations haven't led to charges filed, but they've created a panic in the industry. Major broadcasting groups, such as Clear Channel and Infinity Broadcasting, have subsequently dropped all I-gaming advertising, creating a domino effect throughout media outlets in the United States. A few small portals have folded, while some of the industry's most established portals have sold out.