Internet gaming regulation : the need of an international approach

Abstract

Although at the moment legislation in internet gaming is predominantly in the hands of the national legislators, a number of cross-border consequences arise from the diverse nationally-oriented approaches. Mainly, the activity has posed several policy questions to legislators on what to do about internet gaming. While in these last years some states have opened their markets to internet gaming, many states proceed in creating new barriers, both at an international and at a european level. Yet, both international and regional organizations, such as the WTO and EU, deem restrictions on the principle of freedom to provide services as justified under certain conditions. This leads to the conclusion that there is no real international approach on the issue. Moreover, the geographical transcendence of the internet presents challenges to internet gaming, which is legal in some jurisdictions while illegal in others. Nevertheless, internet gaming operations circumvent restrictive domestic legislation designed to accomplish various policy goals, amongst which player protection, preventing underage gambling and money laundering. In the absence of international cooperation, the most effective measures of states with a prohibitive approach are limited to target the domestic entities, in particular financial services providers. However, the overwhelming issue of law enforcement remains, not only due to the legal difficulties encountered but also due to the advanced technological developments such as alternative payment mechanisms, which make it more difficult to track players. This study analyzes those issues leading to domestic prohibition but also the extent to which such policy is truly effective. The nature of the internet, however, mandates that any scheme, whether prohibitive or regulatory, requires to be somehow constructed in the international arena.