US risks 'behaving like China' in internet betting blitz

Harry Wallop
The Telegraph
Jul. 20, 2006

Internet experts rounded on United States legislators and law enforcers in their attempts to crack down on internet gambling, saying at best they faced an uphill struggle and at worst they were behaving like the thought police.

The Department of Justice won a major coup yesterday by forcing BetonSports to close the website to American users, following the dramatic arrest of the company's British chief executive and charges levelled at 10 other former employees of the company.

If you were a sports-mad fan of baseball and fancied a flutter on the Yankees, you would have been faced with the following message when logging on to the website:

"In light of court papers filed in the United States, the company has temporarily suspended this facility pending its ability to assess its full position. During this period no financial or wagering transactions can be executed."

The message, however, was posted by the company on the advice of its American lawyers, who are locked in negotiations with the DOJ - negotiations in which the authorities have the upper hand, thanks to the fact that it has the company's chief executive David Carruthers under lock and key.

However, if the DOJ chose to widen its investigation there is very little it can do, according to internet experts and others in the online gambling industry.

And the World Trade Organisation waded into the debate yesterday by saying it is going to examine whether the US has acted lawfully in its crackdown on internet gambling.

A source close to Partygaming, the biggest site of them all, said: "If they start doing this they risk behaving like China. And look at the backlash in the States when Google went there."

Google, Yahoo and Microsoft all came under fire earlier this year from Congress for their dealings in China. Google for instance voluntarily filters out various search terms such as Tiananmen Square, which produces 2m hits on the US site.

If you do it on the Chinese version, you get about 13,000 hits.

Jeremy Beale, the head of the CBI's e-Business group, said: "China is not a 100pc success. And look at the price they pay in terms of blocking innovation. They are a police state."

The US Congress that was appalled by Google's supine attitude is the same Congress that overwhelmingly passed an anti-online gambling Bill last week.

"It is very ironic," said one City analyst, who did not want to be named. "The US need to look to their own back yard. At the end of the day online gambling is a $12bn industry. It's fun, it's leisure."

The DOJ has so far claimed one significant scalp with its BetonSports indictments, but it is its first major victory in an eight-year campaign against online gambling.

If it was to conclusively prove that BetonSports activities and those of its rivals were illegal it would need the cooperation of the internet service providers to enforce a prohibition.

The ISPs have been instrumental in helping the UK government crack down on child pornography, for instance.

But their actions in blocking unsuitable websites is done purely on a voluntary basis and is not enshrined in any law.

A spokesman for Tiscali said: "It's a model that we've made work. But it is a moveable feast. As soon as one URL gets closed down, another springs up."

But even if ISPs were prepared to help the US government by putting in place blocking systems, if companies are determined to offer US gamblers access to betting websites, it is possible to circumvent filtering software.

One ISP provider pointed out that the US hosts 35pc of all the child pornography websites in the world and that the law enforcement agencies had got their priorities wrong with their attack on gambling. Mr Beale said: "The US is not going to be successful. It's the largest market in the world for gambling and companies want access to this market."