U.K. advertising policy to effect 1,000 online gaming sites

More than 1,000 online gambling firms will not be allowed to advertise in the U.K. after the 2005 Gambling Act takes effect on Sept. 1, according to a statement released last week by the U.K.'s Department for Culture, Media and Sport.

In addition, sites from jurisdictions approved by the U.K., also know as white-listed jurisdictions, will only be allowed to advertise after 9 p.m.

Several major online gambling jurisdictions, including Costa Rica, the Netherland Antilles, Kahnawake and several islands in the Caribbean, are currently on the banned list, but can apply for white list status after demonstrating tough regulatory measures compatible with the Gambling Act's key policies.

"I make no apology for banning advertisements for Web sites operating from places that don't meet our strict standards," Purnell said. "Protection is my number one priority. The fact that only Alderney and the Isle of Man have been able to meet the high standards demanded by our white listing criteria shows how tough the Gambling Act is. Indeed white listing has actually helped drive up regulatory standards in some countries."

Gambling firms regulated within the jurisdictions of the European Union, Iceland, Liechtenstein, Norway, Gibraltar, the Isle of Man and Alderney, which includes Party Poker, 888.com and Cryptologic, are considered to be on the "white list."

The U.K. says white-listed jurisdictions do a better job of protecting children and vulnerable people from being harmed or exploited; fighting criminal activity, ensuring fair gambling practices, enforcing compliance and ensuring that gambling operators are subject to rules on money-laundering and financial probity.

"The U.K. is following the rest of the world in becoming not necessarily unfriendly, but more restrictive," said I. Nelson Rose, an international expert in online gambling law. "The U.K. had (before the Gambling Act) the rather bizarre law that said the bet took place where the server or operator was, which meant that foreign Internet poker operators, but not British licensed bookmakers, could take out big ads on the sides of London cabs.

According to online.casinocity.com, the Kahnawake licenses close to 400 sites. Antigua & Barbuda licenses almost 200 while the Netherland Antilles licenses just over 300. Costa Rica regulates more than 200 sites.

All of these jurisdictions are currently applying for white list status in the U.K.

"Island nations, like Antigua, have not been cut out, yet," Rose said. "They still might get approved."

Major firms PokerStars, Full Tilt Poker, Bodog, Intercasino, William Hill and Betfred are located in the jurisdictions now considered banned.

Several of these firms are already planning to move their companies in light of last week's announcement. Betfred, Intercasino and William Hill, residing in the Netherland Antilles, announced their intentions last week to move their companies to Gibraltar, which is already home to 888 and PartyGaming.

But Rose said he does not expect many firms to move.

"I don't think you'll see anything like a mass migration to England," Rose said. "The U.S. Dept. of Justice has felt that advertising of Internet gambling has been always been illegal in the U.S., yet it hasn't hurt (online gambling) operators' business, especially after they developed "dot-net" sites, that don't take real money."

White-listed gambling firms will also be removing advertising logos from children's merchandise and creating prominent signposts that direct problem gamblers to the U.K.'s gamble aware Web site.