With online gambling sweeping across Asia, legislators from Singapore visited France to study the European nation’s established online gambling regulations and consider how to apply them to a largely unregulated Asian market. Asian countries such as Japan, China, Korea and Singapore have a burgeoning source of revenue that is currently being tapped by illegal markets as much as legitimate ones.
Last week, Singaporean online gambling officials consulted with Charles Coppolani, France’s president of ARJEL, the country’s Internet casino regulator that declared the online gambling “fad” to be on the wane in the west. However, Singapore’s interest in regulated tax revenue indicates a stronger market in the east.
An official delegation headed by S Iswaran of Singapore’s Ministry of Home Affairs and Ministry of Trade and Industry met with the ARJEL president as well as the Singaporean ambassador to France, Tan York Chor. The group discussed official methods of collecting taxes on the Internet gambling craze currently growing in Asia. The Singaporeans want to capitalize on the trend before it goes the way of New Jersey’s fading online gambling industry, which is predicted to fall about $170 million short of its goal of $180 million in tax revenue earnings for 2014. In France, where the industry has been more successful, the Singaporeans hope to learn how Coppolani managed to bring so many Euros to the French government.
Online gambling supporters criticize Coppolani for burdening the fledgling industry with excessive regulations, causing the decline in government revenue, they argue. French online gambling regulations created the model for the rest of the world to follow when they implemented the legislation in 2010, three years before New Jersey, Delaware and Nevada joined the movement. Now Asian countries are looking to emulate the French success and avoid its failures before black market websites can steal their tax revenue.
In Hong Kong, the illegal gambling market generates billions of dollars per year. Bookmakers offer horse betting, sports gambling and online casinos of growing sophistication. They stay one step ahead of the government by moving to various Web servers hidden throughout the country. Chinese gamblers not content with high-risk investments in foreign currency can up the ante by betting on FOREX and derivatives markets with online bookmakers. In Doha, Qatar, the International Center for Sport Security reported that 80 percent of worldwide sports betting was illegal. The ICSS has faced challenges to its legitimacy due to its location in Doha, the center of a scandal involving bidding corruption in the 2022 World Cup tournament.
The illegal online gambling market extends beyond Hong Kong to the Philippines, Indonesia, Malaysia and Singapore. These get-rich-quick operations are made possible by the current lack of regulations in Asia, according to an independent investigation conducted by the Hong Kong-based ICSS chapter. The investigation also uncovered links between the widespread problem of match fixing in soccer and illegal online gambling, but it concluded that betting fraud is the main problem facing authorities, not match fixing. These problems are concentrated in southeast Asia, according to the report.
But websites taking the straight and narrow path to online gambling success are also proliferating in the region. In South Korea, online casinos are accepting the controversial Bitcoin currency, which in itself has been a form of online gambling for investors. Brave Koreans can invest in Bitcoins and then wager fractions of the digital currency on poker games, online slots and other popular casino games. Over the past 18 months, Bitcoin prices have fluctuated from around $160 per Bitcoin to a nail-biting market bubble of over $1,000 per Bitcoin. The majority of gamblers losing money in online casinos have no idea if their Bitcoin investment would have lost them even more than their decision to play video poker.
The developing market for legitimate online gambling is causing entrepreneurs to strive for a squeaky clean professional image. In an effort to attract gamblers of all nationalities, Asian online casinos are putting the emphasis on fair game play, accountability and reasonable exchange fees. Many gamblers will also be attracted by the anonymity provided by Bitcoin as well as how easy it is to acquire and use. Casinos prefer it because the currency exchange software is easy to implement in a casino website. Bitcoin advocates are hoping the adoption of the digital currency by the emerging Asian online casino market will add credibility to Bitcoin’s image, tarnished by the illegal online drug trade in the U.S. Legitimate online gambling sites have chosen a difficult path, considering the lower overhead of operating illegally and avoiding tax payments. Currently, the illegal online gambling market is about three and a half times the size of the legal market. As savvy gamblers begin to appreciate not being robbed by black market casino operators, these figures could change.