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Papua New Guinea reaches for the online gambling ring

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House of Cards An island nation more famous for ritualized cannibalism than for internet commerce has tossed its ceremonial headgear into the online gambling ring, after its parliament approved a bill legalizing both "bricks and mortar" and internet-based casino offerings by a 61-0 vote last week.

The legislation, titled the "Gaming Control Bill of 2007" flew through parliament with the endorsement of Prime Minister Sir Michael Somare. It provides for the creation of a National Gaming Control Board to regulate the social downside of the controversial industry, such as potential criminal involvement, corruption and gambling addiction.

Who watches over the Gaming Control Board, of course, is anybody's guess.

The bill mandates a 20 per cent gross revenue tax and an additional five per cent tax to be returned to the local communities most affected by the new law. Illegal gambling on slots and horse racing has become a problem in the country in recent years, and tight regulation of the gambling industry, proponents argued, could both provide increased government revenues and lessen the collateral social damage of the industry.

"These community oriented services are not present at the time. And it is incumbent of the board as a responsible commercial citizen to take on board these obligations as it contributions towards the welfare of our people. The Board is also tasked to promote community awareness and education to reflect problems of gaming by providing counselling rehabilitation and support services of problem gamblers and their families," Prime Minister Somare told the Australian Broadcasting Corporation in an interview last week.

"The new legislation aims to curb any opportunity for criminal exploitation of gaming industry and to provide an appropriate regulatory regime whilst recognizing innovation and the need for the development of the industry as part of the country's tourism and commercial environment and that the industry in PNG is competitive with other countries. New forms of gaming include online gaming, overseas-based lotteries products and casino. Legislative framework must be in place to control and monitor this type of gambling."

The licenses are for 10 years, and the "bricks and mortar" jobs will be required to charge hefty entrance fees to discourage impoverished problem gamblers, fees which will be refunded at the exit. The online groups will be required to market their services abroad.

The bill stirred some controversy since it was only introduced after the government had already granted permission to a South Korean group to develop a five-star casino and resort, leading to allegations that the bill was designed to benefit favored groups with political ties - exactly the kind of corruption the bill allegedly seeks to discourage.

At the very least, the law should prove at least somewhat beneficial to the hotel and resort business, although many tourists to Papua New Guinea go there for something a little less tame than casino lights.

Vegas, eat your heart out. ®

Burke Hansen, attorney at large, heads a San Francisco law office

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