Fortune favours e-brave

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GAMING software tester Steve Toneguzzo leans back in his Sydney boardroom and conjures up with his hands how world internet gaming will look in five years.

 

He draws three large blobs in the air but none represents Australia. They are Las Vegas in Nevada, South Africa and Britain.

“Once these three areas build up the trust of the internet gaming market, I don’t see them losing it,” he says.

 

Ironically, all of them will have used Australian expertise or gambling models to achieve their world internet gaming power.

 

Toneguzzo has been rebuilding his business, Global Gaming Services, since the federal Government clamped down on interactive gaming in this country. The Government’s Interactive Gambling Bill prevents Australian operators offering online gambling services to Australian citizens or residents of countries where online gambling is prohibited.

 

GGS tests gaming software and regulation compliance and helped launch Australia’s only internet casino, Lasseter’s. Toneguzzo’s company is one of many forced to scour the world for new business. Luckily, there is plenty of work out there.

 

Today, he will represent GGS at one of the most important meetings held by the Nevada Gaming Commission as it considers whether to licence internet gaming in Nevada.

 

Although the commission has indicated it will move slowly, the word from Nevada is that regulation could come sooner rather than later. Many Las Vegas casinos already offer non-cash internet gaming.

 

The big Nevada casinos in Las Vegas such as MGM and Bellagio will do nothing to jeopardise their live casino licences and will be interested in the advice Toneguzzo gives the public hearing about how a proper internet regulatory environment can be established. Regulation is the key to the future of internet gaming, he says.

 

“Self-regulation or no regulation doesn’t work,” he says. Regulation is a hot issue, especially for operators in the Caribbean who have been threatened with OECD sanctions if they do not address their no-regulation environment.

 

Some of the Caribbean operators are just pinpricks on the world map and very few have a regulatory regime. Senior US legislators allege that drug money is laundered at some internet casino sites and one US legislator recently claimed the Hell’s Angels bikie gang ran some of the sites.

 

But some islands are simply trying to survive in a world where commodity exports have dried up and the internet provides one of the few avenues for expansion.

 

St Kitt’s and Nevis Minister Dwyer Astaphan puts his island’s position simply: “We do not offer red tape. We offer red carpet to appropriate players. It means opportunity for us. The internet is a juggernaut. The feigned morality of bigger countries is very harmful.”

 

St Kitt’s has issued about 27 internet gaming licences and about half of them are operating. There are about 1400 internet casino sites in the world run by about 400 companies.

 

A new player is the island of Curacao, just north of Venezuela. PWC’s office there sees gaming as a new money-spinner.

 

It is the place where the original Crocodile Dundee movie was financed. “When we saw the appraisal for the movie, we thought, `Mmm, that looks risky’,” says a Curacao official.

 

“It made Mr Hogan a very wealthy man. We hope internet gaming can also do this for us in Curacao.”

 

While Nevada debates regulation, South Africa is moving to legalise internet gaming. Sfiso Buthelezi, the nephew of the former chief of the Inkatha Freedom Party, heads the National Gambling Board of South Africa and sees internet gambling as a form of liberation which the big powers of the world shouldn’t be scared about.

 

Toneguzzo’s GGS beat five accountancy firms to win the contract to help South Africa put together a regulatory framework for the board. The legislation is expected to be put before the South African Government later this year.

 

Buthelezi was jailed for seven years on the infamous Robben Island for his political activity during the apartheid years – the same place Nelson Mandela was jailed – so it is ironic that now he is fighting for freedom on the internet.

 

Buthelezi is not shy about tackling the chiefs of the live casinos. “Why is this a big deal?” he asked the recent world interactive gaming conference in Toronto, Canada. “This is e-commerce. We think it is irresponsible to believe internet gaming will disappear into thin air. We should encourage human innovation.”

 

Meanwhile, a report in Britain conducted for the Home Office by Sir Alan Budd recommends internet gaming be approved. The British looked at all the material and reports the Australian Government used to ban internet gaming before deciding to recommend its approval in the UK.

 

“We are clear,” says the Budd report, which was released last week, “that it would not be right to try to ban online gambling in the UK and it would not, in any case, be feasible to do that. Online gambling should be seen as just another way of delivering a service.”

 

Frank Fahrenkopf is the casinos’ main man in Washington. The former Republican party chairman is the director of the American Gaming Association.

 

The US will consider banning internet gaming later this year in a new bill to go before the US Senate. Fahrenkopf says at this stage his association will support the bill.

 

“Internet gambling’s time has not come to move into the front yards of America’s people,” he told the world expo.

 

He says what ruined it for the internet gaming industry in Australia was the Federal Government’s Productivity Commission report into gambling industries.

 

“The Australian industry should never have let that come out first. That will knock things on the head for years,” Fahrenkopf says.

 

He doesn’t mention that the commission said the internet was one of the best mediums to regulate gambling.

 

So, while countries around the world are debating their internet gaming Pengeluaran SGP 
policies, who is running the industry said to have brought in $2 billion in 1999-2000 and which will reap $6 billion in four years? Pretty much it’s a lot of Americans betting on Canadian-run and marketed casino sites in hosting countries in the Caribbean.

 

Toronto-based software supplier Cryptologic is the major winner. It runs two of the most profitable sites on the web from the Caribbean and its share price jumped 16 per cent one day in early June when the Nevada legislature moved to approve internet gaming.

 

Toneguzzo believes Nevada will approve intranet gaming in the state before it approves world licences.

 

He doesn’t believe Australia will ever resurrect its industry and says interactive gaming will eventually be swallowed up by five large companies who will dominate the world.

 

“In five years, I believe, there will be a handful of global brands that will offer all the forms of interactive entertainment. Their power and influence will even call into question the sovereignty of nations.”