UK and US in gambling review row

THE British Treasury and the US government are locked in dispute ahead of a proposed Congressional review next month on legislation governing a boom in internet gambling.

The American government, which already technically bans its citizens from online gambling via a 1961 law, now wants to update legislation to help prevent what it believes could be a proliferation of money laundering and under-age gambling via the internet.

That possibility has sparked an exchange of letters between the Treasury and US legislators, revealing a fundamental disagreement between the two.

Britain considers any US law on internet gambling has no jurisdiction outside the country, arguing these apply only where the 'operator' accepting the bet is based, not where the punter is resident.

However, the American authorities are keen to clamp down on 'offshore' operators, even if they are based in a regulated British market, and are taking the opposite view.

'The Senate, in April 2004, will consider legislation banning any payment system, credit cards and electronic funds transfer for illegal internet gambling,' Congress member John Conyers Jr wrote in a letter to the Treasury.

'The purpose of this legislation is to prohibit US citizens from making internet wagers, specifically with companies outside the US and close the US market to internet gambling operators in the United Kingdom.'

In response, the Treasury replied: 'We have taken the view that online gambling can be properly regulated through the new regulatory body the Gambling Commission. The US concerns over money laundering, problem gambling, child access and fair gambling can be controlled; but we acknowledge that regulators in the United States have reached different conclusions.'

Current American legislation has left a legal vacuum. Some UK online gambling firms are unofficially tolerated, while others are reluctant to move into the market, fearing legal repercussions.

Ladbrokes does not accept internet wagers from US residents, while Alternative Investment Market-listed Sportingbet has a sizeable and increasingly profitable chunk of the US market, where events such as the Super Bowl, in January, attract hundreds of millions of dollars in wagers.