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Offshore Internet Casinos Losing Allies

by Leroy Baker, Tax-News.com, New York

28 November 2002


The offshore internet gambling industry is fast losing allies in the United States, according to a Wall Street Journal report yesterday.

The newspaper revealed that PayPal, traditionally one of the favoured ways for US gamblers to bet online, wound down its gambling payment service on Sunday. This follows moves by various US banking groups, such as the country's largest credit card issuer Citigroup, to stop their cards being used to gamble on the internet, and announcements that several leading websites will no longer carry advertisements for online gambling services.

Speaking to the WSJ, Bear Stearns analyst, Michael Tew estimated that there are approximately 1,800 internet casinos currently in operation, most of them located in the Caribbean. Despite the fact that online betting is illegal in the vast majority of US states, Mr Tew revealed that around 60% of their revenue comes from the US market.

However, following recent announcements, the Bear Stearns analyst predicted, industry growth in this area is set to drop to 20% next year, far below previous estimates of 43%.

'Regulators have been at least somewhat successful in curbing the growth of the industry,' he told the WSJ, adding that: 'You're going to see, in the near future, increased attrition in the market.'

A comprehensive report detailing the online gambling situation in several offshore jurisdictions is available in the Tax News Reports Shop at http://www.tax-news.com/reportshop/

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