Online gambling to be regulated

The government unveiled plans on Tuesday to regulate Internet gambling and said a recent U.S. ban on the industry risked driving it underground.

However, sports minister Richard Caborn told a news conference Britain would not protect online gaming executives from extradition requests if they took Internet bets from countries in which they were illegal.

"People have to abide by the laws of particular countries," he said. "We will not acknowledge people who operate illegally."

Caborn was speaking at Ascot racecourse at a summit of 32 international delegates, which agreed a draft framework of regulation to protect consumers and prevent underage gambling and gambling addiction.

The United States declined to attend, having effectively banned online gaming at the end of September in a move that wiped billions of pounds off the share prices of Internet gaming companies such as PartyGaming and 888 Holdings.

Before passing the new legislation, U.S. authorities had arrested visiting executives from two UK-listed online gaming companies -- David Carruthers from BETonSPORTS and Peter Dicks from Sportingbet.

Both were arrested on illegal gambling charges as part of a clampdown on online gaming by individual states. The United States has also now introduced a ban on banks and payment processors handling payments to online gaming sites.

Culture Secretary Tessa Jowell said Britain opposed the U.S. ban, which risked driving the industry into criminal hands.

"We do not support the approach the United States has taken," she said at the summit.

"The enormous risk of prohibition is that it forces the industry underground," she said, likening the move to the U.S. ban on alcohol sales in the 1920s.

After the summit closed, Caborn said he was pleased with the progress made, and wanted to involve wider international institutions, including UNESCO and the global financial sector.

"We now have in place a road map that will lead to better regulated remote gambling across the world," he said. "Those present today agreed to cooperate further in a number of key areas to ensure that gambling remains fair, crime-free and vulnerable people are protected."

Caborn said Britain was sympathetic to a complaint made by Antigua to the World Trade Organisation (WTO) accusing the United States of protectionism of its gambling industry, but he stopped short of saying Britain would support the complaint.

"It will be a landmark decision ... We sympathise in the sense we want the WTO to clear up this area," Caborn said. "Antigua has made it very clear it welcomes the support of the EU in this. We will find out the WTO's position in 2007."

According to UK government figures, Europe's regular online gamblers stake nearly 3.5 billion pounds a year, an average of 1,000 pounds each. The worldwide Internet gambling market is put at more than $30 billion (16 billion pounds).

(Additional reporting by Kate Kelland)

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