Jamie Wiebe, Ph.D., Factz Research & Michael D. Lipton, Q.C., Elkind & Lipton LLP August 2008
Submitted to the Ontario Problem Gambling Research Centre
1
Executive Summary
There are currently more than 2,000 Internet gambling sites worldwide (Schwartz, 2005). Revenue from these sites is estimated to reach $18 billion by the end of 2008 (Dresdner Kleinwort Wasserstein, 2005). Due to its exponential rate of growth, market impact, and the risks associated with gambling excesses, Internet gambling is a cause for apprehension from many perspectives.
Through regulation, a jurisdiction is able to protect those parties engaged in the risks of the activity. Some jurisdictions have established regulatory frameworks with supporting standards and policies, while others have not. The result is that regulatory frameworks are widely divergent. What follows is an overview of regulatory standards in jurisdictions around the world. For the purpose of this report regulatory frameworks are organized into 3 distinct tiers: Tier 1 regimes are focused on maximum player protection and compliance; Tier 2 regimes are characterized by a more flexible approach aimed at attracting a higher number of operators; and, finally, Tier 3 regimes are those that allow companies to conduct Internet gambling in an unregulated environment.
The current climate for Internet gambling is unstable, a result of both the disparity of regulation among jurisdictions and the resulting aura of public mistrust this disparity has engendered. An internationally-recognized regulatory framework would help address this instability by impartially resolving cross-border disputes and mandating a high standard of customer service and game integrity. A variety of regulatory approaches could be applied to accomplish the same goals; and such a framework would make it possible to evaluate divergent regulatory practices from a politically independent perspective.