Tuesday, October 10, 2006

Ministers want to make Britain the world centre of internet gambling,
documents released by Whitehall showed today. The records showed that
ministers and officials have met internet gambling tycoons and their
representatives no less than 26 times over the past two years. The details
suggest that the Government is engaged in a campaign of cosying up to online
gambling concerns as intense as the effort to attract casino firms to set up
large-scale new gaming resorts in Britain.
Labour's aim is that 'Britain should become a world leader in the field of
online gambling', the papers said. The closeness of ministers to gambling
interests has brought the role of Deputy Prime Minister John Prescott in
particular under scrutiny. Mr Prescott has been criticised since failing to
register hospitality and the gift of a cowboy outfit from Philip Anschutz,
the tycoon hoping to open the country's first supercasino in the Millennium
Dome. The release of evidence of links between ministers and online gambling
interests comes just as the internet gaming firms have run into deep trouble
in the United States, where arrests of British internet gambling executives
have been followed by a new law which would stop American punters from using
their credit cards on line. Among recent meetings attended by ministers are
talks between gambling minister Richard Caborn and heads of the Party Gaming
and 888.com group in Gibraltar. Mr Caborn flew to the Rock at taxpayers'
expense in July. Culture Secretary Tessa Jowell is scheduled to run a
gathering of politicians from around the world at Ascot racecourse at the
end of the month which will discuss regulation of the internet industry. The
papers released under Freedom of Information rules show that the
Government's aspirations were set out in a briefing note written for Mr
Caborn before a meeting with Mark Davies, managing director of the Betfair
firm, last July.

The briefing said: 'It is a government-wide policy, and that includes Her
Majesty's Treasury, that Britain should become a world leader in the field
of on-line gambling, in order to provide our citizens with the opportunity
to gamble in a safe, well-regulated environment.'

The safety of internet gambling sites has been under question in the wake of
a number of trials in which internet gamblers have mounted up massive
losses.

In August, gaming addict Bryan Benjafield was jailed for stealing £1 million
from his bosses to use for internet bets.

Benjafield, a 23-year-old bookkeeper, was losing as much as £17,000 a day on
horse racing, football matches and casino games while earning £16,000 a
year.

Jailing him for five years, Judge Andrew Langdon said: 'It says something
for the power of your addiction to gambling that despite the low rate of
return on your mindless betting, you carried on despite the obvious
consequences.'

The judge added: 'The ease with which a desperate man addicted to gambling
could spend enormous sums is bluntly staggering. Internet or online gambling
has made it much easier, regretfully, for enormous sums to be spent
unthinkingly.'

Internet betting firms lost more than £4 billion off the value of their
share prices last week after the legislation from Congress meant an
effective shutdown of US operations. Exile from America - where sports
betting has always been viewed with much deeper suspicion than in Britain -
would mean the firms must concentrate more strongly on the British market in
order to keep profits flowing.

Online firms which rely on payment by credit card must currently operate
from offshore. But from next September they will be allowed to operate from
British bases under British regulation.

The Government's attempt to lure the firms into Britain has already meant
they will face a tax of 15 per cent on gross profits, the same taxation
applied to traditional bookmakers, and a rate regarded by bookmakers as
extremely generous to the internet firms.

Shadow Culture Secretary Hugo Swire accused ministers of favouring the
gambling industry over the interests of the public.

'Making Britain the world capital of on-line gambling is a strange
objective,' he said. 'The whole point is to make sure we have regulations to
prevent problems with gambling.

'Tessa Jowell and her department have been asleep to the problems of on-line
gambling.'

Mr Swire added: 'Yet again Miss Jowell and her officials appear to be
working for the benefit of the gambling industry.'