CasinoCityTimes.com

Gurus
News
Newsletter
Author Home Author Archives Search Articles Subscribe
Stay informed with the
NEW Casino City Times newsletter!
Newsletter Signup
Stay informed with the
NEW Casino City Times newsletter!
Arjan van't Veer Archives
More Strategy Experts

Arjan van't Veer Gaming Guru

Arjan van't Veer
 

Holland Explores Internet Gaming

20 August 1998

By Arjan van't Veer

IGN's European correspondent, Arjan van't Veer, offers IGN this little tidbit from Holland. The country is exploring how they may want to evolve their gaming products into interactive media. Below is the Executive Summary which gives you a sense of where they may be headed.

Management Summary

Since 1 May 1997, research has been carried out into interactive gaming in the Netherlands, which was commissioned by the members of the Nederlands Kansspel Platform (NKP: Stichting Exploitatie Nederlandse Staatsloterij SENS, De Lotto, Holland Casino and the Stichting Nationale Postcode Loterij NPL) and the Gaming Control Board. This research included a study of the consequences of technological developments (information technology, telecommunications, Internet etc.) for the existing Dutch market for games of chance. Besides the threats associated with such developments, the opportunities for the existing organizations operating games of chance were also examined. The research was conducted during the period from May 1997 to May 1998.

The actual research activities were assigned to a researcher attached to Erasmus University Rotterdam. The researcher, Mr A. van 't Veer, was assisted in his activities (compiling information, analysing information, making an inventory of points of view, writing interim and final reports) by a supervisory committee, which was not merely concerned with monitoring the progress of the study. It was already clear at the beginning of the study that the chairman and the members of the supervisory committee, under the leadership of Mr J.J. Borking (deputy chairman of the Registration Board)*, were also prepared to discuss the significance, developments and (im)possibilities of the issue, without taking up a particular position. During the study, therefore, it is fair to say that there was an (informal) research group.

Interactive games include those games in which the player can participate at any time and at any place without the intervention of a third party, not completely free of charge, which are provided with the aid of information technology and means of telecommunication beyond the scope of the traditional supply structure and which give the player, at the discretion of the provider, the opportunity to perform all actions necessary for participation such that he is able to win prizes. With respect to the investigation of the interactive playing field it appears from the study that there is currently growing interest in the (im)possibilities of e-commerce, the provision of or the use of services or products which are provided by means of new telecommunication and information technologies. More and more companies are going 'online', in the same way that more and more households have an Internet connection. Studies also indicate that more and more applications of the new technologies are being offered; however, it is striking that one of the most important aspects - electronic funds transfer - is developing less rapidly. Experience shows that the provision of interactive services requires considerable attention (attractive, innovative) and is thus accompanied by considerable costs and efforts. The relatively new material means that it is difficult to formulate a clear profile of the user. Both the (characteristics of the) Internet user in general and the interactive player in particular are rather difficult to identify.

The Internet gaming sites - telephone games (e.g. premium lines) are not included here - are divided into three categories. First of all, there are the Internet pages of companies or organizations which only want to present themselves. This group includes, for example, the sites of the existing Dutch providers of games of chance. Information is given, for example, about draws, good causes or future campaigns. Other 'foreign' examples illustrate that such a site can be a step towards a serious supply of games. The 'real gambling sites' therefore form the second group. In less than a year the number of such Internet sites on which it is actually possible to play for money has grown by one hundred percent to more than 150 in number and new virtual casinos and Internet lotteries are being opened all the time. The games include virtual casinos, Internet draws and lotteries, bingo games and sport betting (bookmakers). The supply of games is not confined to traditional forms of gaming; besides betting on all kinds of events, it is, for instance, also possible to gamble on the result of (various stock and option) exchanges. A final group is formed by the organizations and institutions that only provide gambling related information; articles, experiences etc. A trend is increasingly visible with the establishment of top-10 and top-100 sites that point the player towards the 'reliable' gaming sites. The trade in attractive, suitable domain names (such as www.luckycasino.com or www.winlotto.com) is also increasing in intensity.

Discussions about the desirability or possibility of regulations in the area under discussion concentrate on three models; models that take account of the uncertain, difficult nature of the problem in question. Incidentally, it appears that countries or (to a certain extent independent) territories such as Antigua, CuraƧao, the Dominican Republic, Liechtenstein are not too worried about such problems; they allow the new developments. The U.S. model, however, assumes the general undesirability of online, interactive forms of gaming. The shortcomings in existing regulations (including Wire Act, Decency Act) are currently being attended to in the so-called Kyl Bill. This legislation penalizes both the provision of as well as (in some cases) the participation in interactive (Internet) games of chance. Various U.S. Internet casino providers have already fiercely objected to such regulations. Australia and New Zealand have responded to the developments in a more pragmatic manner. The focus is on the levying (and payment) of taxation, as well as on protecting the interactive player. The idea is that a legal supply will automatically generate income and will operate reliably and safely of its own accord. Finally, the European model always takes account of the fact that policy on games of chance is a national affair and that in any case no international activities must be developed. Furthermore, the number of providers in many countries has been limited since time immemorial and games of chance have only been allowed on a commercial basis if they are for a good cause or serve the common good. Many of these points of departure, however, are under fire within Europe; in this respect the developments on the electronic highway represent a not to be underestimated catalyst. The recent to-do about the Liechtenstein Internet lottery Millions 2000 is a good example of this. Within the outlined limits the Finnish and (recently) the Swedish governments, for example, have also granted permission for existing (national, own) providers of games of chance to offer their products via the Internet. The provision of services via information and telecommunication networks also has the attention of the European Union. Countless reports point to the available opportunities as well as the threats posed by these. Availability and accessibility should always be guaranteed in a broad context. Attention has also been given to the protection of the privacy of the users. In the Netherlands, various reports and studies have appeared on the subject of the (un)desirability of a 'digital' economy within the scope of the 'Nationale Actieprogramma Elektronische Snelweg' (national electronic highway action programme). In this respect, the Netherlands has always indicated that it wants to lead the way, certainly within Europe. Incidentally, not only the possibilities for the business community, for example, have been examined in this context. The legal aspects are also discussed. In general, the assumption appears to be that what applies offline should also apply online. The interactive gaming study has indicated it may be difficult to maintain such a point of view. After all, there are hardly any clear boundaries (no home and abroad), nor is there a clear time or place at which a particular transaction is entered into. Nor is it clear which parties play a role, which are showing their true character or which parties are 'watching' (unobserved). However, this does not in any way mean that it should be concluded that rules on the electronic highway should not be upheld; excesses and obvious wrongdoing should be counteracted using the existing instruments and with wide-ranging international consultation. It should be pointed out in this respect that the new technologies may also be of use here. It is emphasized that such forms of technological prevention therefore also deserve a lot of attention.

The question now is how the developments and bottlenecks that have been described in the field should be dealt with. Before answering this question some attention should be paid in the report to a number of important questions. One of the questions to be answered is whether (the use of) the electronic highway will really take off. This question is answered in the affirmative. Numerous projects, pilot studies and reports indicate that this is slowly but surely the case. Far-reaching internationalization and globalization is taking place; borders are fading away. Numerous new actors are now entering the (games of chance) market and are attempting to capture a piece of the existing market with a simple game. And even if the use grows less rapidly than is anticipated by some, it still would seem to be desirable to consider the material in question in advance. Another question concerns fund-raising in an (increasingly) digital society. New, young generations of players appear to be increasingly drawn by a mix of excitement and fun, rather than by the good causes for which a particular game is provided. In other words, where the raising of funds was an important starting point in the traditional policy, it is now increasingly developing into a possible marketing instrument. Furthermore, new, unaffiliated (Internet) game providers have no or virtually no obligation to hand over the money they have raised. They are thus able to pay out much higher prize money (with a small own profit margin). All of this means that the providers must adopt an entirely different and new approach towards the playing public.

Where the protection of the privacy of the online players is concerned, the study examines the discussions about Trusted Third Parties (TTP) and Privacy Enhanced Technologies (PET). Such new possibilities with a considerable degree of security and meticulousness can join battle with the well-nigh-unlimited privacy violations. A TTP can be of assistance with the validation and safeguarding of transactions, for example, and PET can filter the personal information that may be incriminating for the player. The possibilities provided by these techniques, making use of powerful encryption keys, protect the players and discharge providers from many administrative duties.

The study also considered the various models and scenarios which can be used to deal with the developments described in the report. With the scenarios it is generally possible to explore the near future. This is not a prediction, but an elaboration of future possibilities. An examination is made of the (social) costs that are incurred and efforts that are made to attain a particular goal (in the field of games of chance). Where important, these scenarios consider the developments in the traditional market for games of chance. From the various scenarios it appears that it is undesirable to impose a total ban. Equally, a totally free market should also be feared, certainly in the light of the position of the existing government-controlled game providers. In the first scenario (total ban) the essential enforcement costs would be (too) high, while in the second instance (complete freedom) the fear is that the existing organizations operating games of chance will be unable to withstand the aggressive, unregulated competition. In both cases, existing fund-raising activities, for instance, are at issue. Moreover, neither scenario does justice to the embedding of the existing national policy on games of chance in a wider European legal perspective. Between these extremes are numerous other scenarios. Descriptions will be given of the consequences of a more fiscally oriented model, a Government Controlled model that includes variations such as a Governmental Partnership or Remote supervision and a European model.

The analysis of the existing situation, the scenarios described as well as the fact that new technologies and their possible applications have still not been completely fashioned, indicates that the existing market for games of chance is going through a transition phase. Numerous old, trusted points of departure will slowly but surely 'disappear'. All this prompts the parties involved to reconsider certain points of departure so that, in particular, fund-raising and the position of the existing organizations operating games of chance do not get pushed aside. A trend is perceptible whereby new, sometimes very wealthy, parties enter the interactive gaming field; their unaffiliated nature produces numerous uncertainties and problems with respect to, for instance, (the degree of) controllability, supervision and guarantees for fair game-play. Super-fast technological developments, far-reaching liberalization and a high degree of globalization threaten the position of the existing organizations operating games of chance.

It is justifiable to conclude that, in view of the rapid developments and the interests which go hand in hand with them, it is (more than) desirable that the existing licence-holders in the Netherlands are in any case given the opportunity to provide interactive games. For the time being, gaming should be confined to this group of providers, on the one hand because they have already been providing standardized games for many years and, on the other hand, because it is not yet entirely clear what the consequences of the new developments will and could be. Existing legislation will therefore have to be reviewed in the short term in order to give the respective licence-holders the possibility of providing (legal) games. At the same time, consideration will have to be given to determine the extent to which the existing gaming policy and legislation should be 'recalibrated'.

Naturally following on from the general (policy) discussion it is also desirable to examine in which cases and under which circumstances, and above all also by whom and if there is reason to do so, where and when intervention in the gaming process is permitted. The use of technological possibilities, on the one hand to properly protect the privacy of the player and on the other hand to relieve the games provider from numerous administrative operations is desirable in this respect. The so-called Privacy Enhancing Technologies (PET) may provide the necessary protection. In general, the contribution made by technology to both the provision of interactive games as well as to the setting up of protective (technological-preventative) measures will be indispensable. In other words, an interactive gaming policy is impossible without the contribution (knowledge, know-how) of specialists in the field of information and telecommunication technology.

Holland Explores Internet Gaming is republished from iGamingNews.com.
 

Internet Gambling in Europe: State of the Art (I)

2 April 1998
Sometimes, it appears that the developments in the field of Internet gambling, nambling or interactive (home) gambling seem to take place only in the United States and Australasia. The recent charges of the US government against Internet sportsbetting companies, the Kyl bill and initiatives like the ... (read more)
Arjan van't Veer
Arjan van't Veer