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Paddy Power mulls US online betting
Conor Brophy



BOOKMAKER Paddy Power may reverse its long-standing policy of preventing punters in the US from betting on its website.

The company's website does not accept US credit cards, and Paddy Power has said in the past that regulatory issues prevented it from doing so. Paddy Power chief executive Patrick Kennedy said last week, however, that the policy was now under review.

"We'll always keep the US under review because it is such a big market, " he said.

It is unclear under US law whether or not online betting sites, even those based outside the country, are breaking the law by allowing Americans to bet online.

"This is a grey area legally, " Kennedy said. "If we were going to do it, we'd do it with poker."

Gambling is illegal in many US states. A federal statute, the Wire Act of 1961, prohibits betting over the "telephone wires", but it is not clear to what extent this applies to internet gambling.

A number of court decisions involving the Wire Act suggest that, although betting on sports events over the internet is illegal, other forms of gambling, including internet poker, are not.

The situation is further complicated by the fact that two Republican congressmen have recently proposed a bill that would ban online gambling. The Gambling Prohibition Act would make it illegal for offshore operators to transfer money from credit cards or bank accounts held by Americans.

Several previous attempts to introduce similar legislation have failed, but the threat of an outright ban on online gaming acts as a deterrent to those operators, including Paddy Power, that have not already entered the US market.

Up to 14 million Americans regularly bet online through websites such as Partygaming. com, Empire Poker and 888. com. Online poker, in particular, has proved a big hit with US gamblers.

Poker site operator Party gaming, the world's largest online poker provider with turnover of 815m in 2005, raised 1.5bn following its flotation on the London Stock Exchange last year.

The vast majority of Partygaming's customers . . . 85% in the last financial year . . .

reside in the US.

Paddy Power launched online poker on its website last year, aimed primarily at customers in Ireland and Britain. The bookmaker's gross winnings from online poker and casino games were 17m, representing almost a third of its 43m online revenue in 2005.

Online turnover was up 40% last year to 327.5m, on which Paddy Power made operating profit of 17m, accounting for more than half the company's overall operating profit during the period.




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