Feeds

AOL gets into the online bookie business

Family-friendly kneecappers on the way

Boost IT visibility and business value

An AOL sportsbook? Watch out, NBA.

The slow encroachment of American internet behemoths on the European gambling market crept onward again last week, with a partnership between German gambling company FLUXX and AOL to market a sportsbook in the UK.

The two companies already have a similar arrangement offering lotteries in Germany, which dates from 2003 and which apparently is one of the most successful ecommerce products offered by AOL Germany.

Many in the European igaming industry bemoaned the passage of the Unlawful Internet Gambling Enforcement Act (UIGEA) as much for its long term impact as a weapon of American economic domination as for its hypocrisy and short term impact on operations, travel, revenue, etc. It was widely viewed as a kind of Trojan horse that would allow American gambling giants such as MGM-Mirage to engorge themselves on undervalued and financially weakened European competitors.

The actual fallout has been somewhat different. Sands did partner up with Cantor, but the real Trojan horse seems to be the powerhouse portals such as Yahoo! and AOL, which at least have the potential to leverage enormous site traffic, deep pockets and established casual gaming platforms with nearly universal brand recognition into dominant positions in an overly fragmented internet gambling market. Yahoo! has been offering money poker games on its UK website for several months now.

AOL is taking it one step further. Debates about poker and skill gaming aside, the one form of gambling explicitly verboten under the Wire Act is bookmaking, that old standby of the American mob. As such, the new partnership will not take action from American players. But it is clear that major American media companies see online gaming in all its guises as a lucrative new frontier, albeit one they don't broadcast to stateside media. The Cheney administration will not be around forever, and everyone wants a discreet foothold.

Sportsbooks have their own unique skill sets and ethical issues, which is why AOL chose to partner up with an experienced handicapper. Unlike roulette or slots, where the house knows that over the long term it will collect a certain percentage as rake, if a sportsbook makes an error in judgment, it can take a serious hit. Sportsbooks haven't really changed from the green visor era - it really is people in a back room going over past statistics, as it always was. As the NBA is painfully aware, problems with the human element may extend to the game itself.

It could well be that media conglomerates have more to offer the online gambling world than "bricks and mortar" casinos do. Partnerships can turn into acquisitions once a company feels it has sufficient expertise in a new endeavor, and the online gambling industry is ripe for consolidation.

Of course, this is AOL we're talking about, the company that squandered $200bn in market capitalization after its last tie-up. Maybe the European gambling firms don't have much to worry about after all.®

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

Maximizing your infrastructure through virtualization

More from The Register

next story
Stick a 4K in them: Super high-res TVs are DONE
4,000 pixels is niche now... Don't say we didn't warn you
BBC goes offline in MASSIVE COCKUP: Stephen Fry partly muzzled
Auntie tight-lipped as major outage rolls on
Philip K Dick 'Nazi alternate reality' story to be made into TV series
Amazon Studios, Ridley Scott firm to produce The Man in the High Castle
iPad? More like iFAD: We reveal why Apple fell into IBM's arms
But never fear fanbois, you're still lapping up iPhones, Macs
Amazon Reveals One Weird Trick: A Loss On Almost $20bn In Sales
Investors really hate it: Share price plunge as growth SLOWS in key AWS division
Bose says today is F*** With Dre Day: Beats sued in patent battle
Music gear giant seeks some of that sweet, sweet Apple pie
There's NOTHING on TV in Europe – American video DOMINATES
Even France's mega subsidies don't stop US content onslaught
You! Pirate! Stop pirating, or we shall admonish you politely. Repeatedly, if necessary
And we shall go about telling people you smell. No, not really
Too many IT conferences to cover? MICROSOFT to the RESCUE!
Yet more word of cuts emerges from Redmond
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
Application security programs and practises
Follow a few strategies and your organization can gain the full benefits of open source and the cloud without compromising the security of your applications.
How modern custom applications can spur business growth
Learn how to create, deploy and manage custom applications without consuming or expanding the need for scarce, expensive IT resources.
Securing Web Applications Made Simple and Scalable
Learn how automated security testing can provide a simple and scalable way to protect your web applications.