Anticipation Grows as US Moves Closer to Ending Online Gaming Ban

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Monday, 02 August 2010 - 17:45

After four years locked out of the lucrative US market (resulting in huge share losses for many companies) online gaming operators could be returning stateside once again. Barney Frank, chairman of the House of Representatives Financial Services Committee, has restarted his campaign to repeal the Unlawful Internet Gambling Enforcement Act, which banned all financial transactions being made to gaming sites.

Although he is not a betting man, Frank has been one of the most fervent opposers of the ban, and last week was supported by fellow lawmakers in the Financial Services Committee, who voted 41 to 22 in favour of new legislation that would legalise many forms of online gaming.

This change of view seems to mirror the growing opinion held by lawmakers and officials in different parts of the country (such as in the state of New Jersey, where they have been looking to devise a way for local casinos to provide their services online). What’s more is that many US internet users can happily participate in games on off-shore sites, highlighting the ineffectiveness of the ban as well as putting control out of reach of official regulation.

Morgan Stanley leisure analyst Vaughan Lewis said, "The overall political tide is moving firmly in favour of regulation, rather than prohibition” – a view shared by other experts in the industry.

Barclays Capital believes that, after PartyGaming’s recent announcement of a merger with bwin, they could become a key beneficiary, potentially increasing their profits by 94%. However, European and other non-US sites are concerned that it will be the home-grown operators who will be the first to receive licenses.

But whatever way the situation unfolds, there is currently a great deal of optimism and excitement within the industry – if the US market did reopen, online gaming would never be the same again.