Canada's punters calling on bluff

[johnny1212]

No folding in face of U.S. gaming law
Gamblers wagered $12 million online
MORGAN CAMPBELL


While U.S. Congress is trying to stifle the online gaming industry south of the border, Canadian Internet gamblers have nothing to worry about.

Except losing their shirts.

Over the weekend, Congress passed a law that would make it a crime to use a credit card issued by a U.S. bank to pay for any online gambling transactions, including casino games and sports bets. Worldwide, it is estimated that gamblers spent more than $12 billion last year on online gaming.

In reaction to the proposed new law, stock prices for publicly traded, foreign-based Internet gaming companies that do business in the U.S. tumbled.

But Michael Linton, a Toronto lawyer and expert on online gaming, said the new U.S. law will have little effect in Canada.

"My first reaction is that this law won't have a significant effect, if at all," Linton said. "Canada is still not part of the U.S. A lot of what we clear doesn't necessarily go through the Republic Bank of New York."

The law, which will become official 270 days after U.S. President George W. Bush signs it, doesn't prohibit online betting on horse racing.

Bill Rutsey, president of the Canadian Gaming Association, thinks the new law might only affect Canadian bettors if gaming companies based in Europe or the Caribbean view the U.S. and Canada as one bloc.

"To the extent that these companies will not be making games available to U.S. residents, they will probably do the same for Canadians, just because it's easier," Rutsey said.

Department of Justice spokesperson Paula Creighan says the Canadian government has no plans to change the current laws, which prohibit all forms of Internet gambling except for:

#
Lotteries in provinces that allow online ticket sales.

#
Bettors who have telephone accounts at horse racing tracks.

#
Private bets between individuals.

Rutsey and Linton spoke to the Star from Montreal, where they were attending the Mobile Gambling, Gaming and Lotteries Summit, which focused on ways to promote gaming over mobile phones. He said that type of gaming would also be illegal here.

Rutsey estimates that Canadians spend between $600 million and $1 billion a year on gambling websites.

Most of those sites are based outside of Canada, but many of them — both foreign and Canadian — operate from a huge server on a First Nations reserve near Montreal.

Linton says the computer complex belongs to a group of Kahnawake Mohawks who run the operation protected by section 35 of the Canada Constitution Act, which exempts them from federal laws that infringe on First Nations traditions.

A broad interpretation of that law allows a group of people on the reserve to grant gaming licences and rent computer space to online gambling sites from around the world, Linton said.

The problem, Rutsey said, is that among the roughly 3,000 online gambling sites currently running, only about 200 are publicly traded. With many of those sites already announcing they will stop doing business with Americans and concentrate on Asian markets once the new U.S. law becomes official, Rutsey fears Canadian gamers will resort to gambling on underground web sites with less than impeccable credentials.

"(Publicly traded companies) didn't risk arrest and prosecution in the U.S., so they're going to stay within the law," Rutsey said. "(The new law has) has turned Internet gamers over to the most unsavoury element on the net — people who are willing to risk prosecution."

[Gerk]

Interesting that the lawyer stated this

Canada is still not part of the U.S

Wondering when that will happen, anyone know?