1. Today’s Agenda Lec Video Part 1 of 2

2. Internet Gambling: Tale of the Tape Oct 1995  Liechtenstein conducts online purchase of lottery tickets 1996-1997  Caribbean & Central American countries begin hosting online casinos &/or sports/race books: Antigua; Netherland Antilles; Turks & Caicos; Dominican Republic; Grenada; Costa Rica; Belize; Panama  Online casinos &/or sports/race books offered by a few U.K. and Australian based companies  Online lotteries conducted in Finland and Coeur d’Alene tribe in Idaho

3. Interactive Television (iTV)  iTV launched in late 1990s ( e.g., movies on demand)  Has expanded to include shopping, banking, music selection, video game playing + GAMBLING  Interactive lotteries, bingo, horse racing, sports betting  TVG 1999 in U.S. (horse race betting)  Still very small percentage of ‘remote’ gambling market  Primary penetration in Europe (U.K. & France)

4. Current Internet Gambling: 2093 Online Sites http://online.casinocity.com/ http://online.casinocity.com/

5.  Casinos http://www.freecasinogames.com/enter.html http://www.freecasinogames.com/enter.html  Poker Rooms http://www.online- gambling.com/freecasinogames/Poker.html http://www.online- gambling.com/freecasinogames/Poker.html  Sports/Race Books https://www.bwin.com/sportsbook.aspx https://www.bwin.com/sportsbook.aspx  Skill game sites http://www.king.com/ http://www.king.com/

8. Current Internet Gambling: Providers  48 jurisdictions  Major providers are:  Gibraltar (208 sites)  United Kingdom (98 sites)  Malta (314 sites)  Alderney (62 sites)  Isle of Man (14 sites)  Netherland Antilles (257 sites)  Austria (9 sites)  Costa Rica (218 sites)  Antigua (76 sites)

9. World’s 3r d Largest Provider  Canada!  Kahnawake Mohawk Territory in Quebec sites (n = 256)  http://www.canadian-casinos-online.com/kahnawake-gaming- commission.html http://www.canadian-casinos-online.com/kahnawake-gaming- commission.html  http://www.allslotscasino.com/ca/ http://www.allslotscasino.com/ca/

11. Payment Methods  150 ways to pay  Visa and MasterCard most popular, and accepted by 90% of sites (not from U.S. players)  Other popular methods: Neteller (72% of sites); Bank Wire Transfer (58% of sites); Moneybookers (50% of sites); personal cheque (25% of sites).

12. Current Internet Gambling: Market Share  $15-20 billion in 2008, with sports/race books, casinos and poker accounting for large majority  4-5% of worldwide gambling market  Patronage uncertain: North America (30-35%) Asia (11 – 49%); Europe (23-44%)  U.S., China, U.K. largest single markets within these continents

13. Past Year Gambling Participation in Canada in 2007 amongst Gamblers

14. Prevalence of Internet Gambling  0% to 7% depending on the country  7% in U.K. in 2008 (9% if include iTV)  7% Norway in 2006  1-3% U.S. in 2006/2007  2.1% in Canada in 2007  1-2% Australia in 2006/2007  1% Singapore in 2008  growing

15. Canadian Regulatory Framework  Provinces can operate all forms of Internet gambling (except horse racing) as long as patrons are residents of the province  In 2004, Atlantic LC & British Columbia LC began providing online sports betting, interactive lotteries, & lottery ticket sales  http://www.bclc.com/Default.asp http://www.bclc.com/Default.asp  Federal govt oversees horse racing, and began allowing online bets in 2003.  In 2004, Woodbine Entertainment in Ontario began taking online horse race betting for tracks around the world  http://www.horseplayerinteractive.com/ http://www.horseplayerinteractive.com/

16. Canadian Regulatory Framework  Legality of Canadians placing online bets outside their province is unclear  Certain Canadian First Nations groups: Kahnawake (QU), Ochapowace (SK), Six Nations Grand River (ON), Alexander (AB) have hosted online gambling

17. Internet Gambling: Legality 2009 Elsewhere  Total prohibition  U.S., China, Russia, Greece, Portugal, Bermuda, Pakistan, Saudi Arabia, Cambodia  All forms legal  U.K., Gibraltar, Antigua, Malta, Netherland Antilles, Panama  Some forms legal  Sweden, Finland, Germany, Hong Kong, Liechtenstein, New Zealand

18. Internet Gambling: Legality 2009  Only legal for residents  Finland, Austria, Norway, Canadian provinces  Only legal for residents and residents cannot gamble online outside the country  Czech Republic, Denmark, France, Germany, Hong Kong, Hungary, Italy, Norway, Slovakia, Sweden

19. Concerns with Internet Gambling  Unfair, Illegal, or Irresponsible Business Practices  Not paying player winnings  Unfair odds  Free-Play sections with odds that favour the player  1/3 of online players report having had a dispute with an online casino or poker website

20. Concerns with Internet Gambling  Unfair or Illegal Player Practices  Hacking sites to pay wins  Theft and fraud at skill game sites  ‘denial of service’ attacks (extortion)  Money laundering  Player collusion  Poker bots

21. Poker Bot

22. Concerns with Internet Gambling  Internet gambling by prohibited groups (underage, site employees)  50% of N.A. high school and college/university students have played on free play online gambling site (Derevensky et al., 2006)  2% - 9% of North American youth report having gambled online for money

23. Problems with Internet Gambling  Nature of Internet Gambling makes it conducive to producing Problem Gambling  24 hr immediate access  Solitary play  Immersive interface  ‘electronic cash’  Ability to play under influence of drugs or alcohol  In general, evidence suggests the prevalence of problem gambling is 3 to 4 times higher in Internet gamblers

24. Problem Gambling in Canada in 2007 Wood & Williams, 2009; n = 8,498

25. Future of Internet Gambling  Continued strong revenue growth  Particularly strong growth among the Asian market  Strong growth in Betting Exchanges and Skill Games

26. Future of Internet Gambling  Market consolidation  Growth of other forms of remote gambling

27. Future of Internet Gambling  Increasing rates of problem gambling  Movement toward legalized and regulated markets (with some later regrets?)

28. Pros of Legalized Internet Gambling  Regulatory control would ensure fair games and better player protection  Regulatory control would accrue economic benefits that are currently leaving the jurisdiction ($$$ then applied to prevention/treatment)  Govt should not be regulating people’s leisure behaviour or how they spend their money

29. Cons of Legalized Internet Gambling  Legalization will increase the rates of problem gambling  Nature of online gambling makes it inherently more problematic  Significant % of online gambling revenue comes from problem gamblers (41% in Canada; 27% internationally)  Legalizing online gambling and redirecting $ into treatment does not offset the harm caused