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U.S. Online Gambling Ban "Cut Out" Stage for Future Battle With U.K.
U.S. Law Causing Turmoil for Illegal Online Gambling Industry Opens the Door for Battle Between European-Regulated Sports Betting and U.S.-Regulated Over-the-Counter Sports Market
NEW YORK, NY -- (MARKET WIRE) -- November 06, 2006 -- A year ago Wall Street heavyweights such as Fidelity, Merrill Lynch, Goldman Sachs and Morgan Stanley Securities invested over $388 million in the once promising and lucrative online gambling sector listed on the London Stock Exchange.
It was companies like PartyGaming PLC and its $8 billion IPO in 2005, the largest IPO in London's history, which blinded investors. But the promising Internet boom hid a dirty little secret. Online gambling had no legal footing for operating within the United States, where 60%-80% of all online gambling clients are said to reside.
Inevitably the gambling bonanza came to a crash. On October 13, 2006 President George Bush Jr. signed the Unlawful Internet Gambling Enforcement Act into law. The passing of this bill makes it illegal for financial institutions or payment processors to transact in dollars with unlawful Internet gambling providers. More than £4 billion ($7.6 billion) has been wiped off the London Stock Exchange since the signing of the bill.
The British government lashed out at the U.S. for hard lining against online gambling. Tessa Jowell, Britain's culture minister, said, "The industry has been very hard hit by the U.S. ban. The Internet is a global marketplace, and that's why we need action at the global level."
U.S. lawmakers said they passed the bill out of concern that Internet gambling would only serve to increase gambling addiction and social problems. U.S. Representative James Leach (R--Iowa) said, "Internet gambling has dangerous implications for families and society. It's also a front for money laundering and terrorism."
The British argue that online gambling should be regulated. But even in Europe where Britain, Italy and Belgium are leading the rally to regulate Internet gambling, the criminal dangers of gambling cannot be overlooked. Last week British police arrested a financial advisor who conned clients out of £2.3 million (nearly $5 million). The victims were mostly elderly whose life savings he used to feed his online gambling addiction. The U.S. could be seeking to prevent such dilemmas by using a different approach to the mixing of sports and money.
No one denies that mixing sports with money makes events more entertaining for fans, generates stadium attendance, and increases TV audience. The question has always been how to gain such benefits without putting people at risk. The development of a regulated investment platform based on sports may allow the U.S government to offer an answer.
Government-regulated sports investing gives athletic teams a chance to earn gains, while offering a responsible alternative to gambling. It provides tax relief, stimulates positive social reform, and promotes strong financial growth for U.S. markets. The path to regulated sports investing is found in Over-The-Counter Sports Derivatives. There is currently one company that is hoping to fit the bill for this project. AllSportsMarket, through its web portal AllSportsMarket.com, seeks to offer the United States and the world the very first Global Sports Financial Exchange.
AllSportsMarket President and C.E.O Chris Rabalais said, "AllSportsMarket.com is a Global Sports Financial Exchange (G.S.F.E.) continuously trading Performance Based Sports Derivatives on a global Internet browser based platform, loosely termed a Sports Stock Market. The Unlawful Internet Gambling Enforcement Act (H.R. 4954), signed into law on October 13, 2006, contains specific provisions for the legal operation of a Sports Derivatives exchange in the United States."
AllSportsMarket claims to be in communication with several teams and leagues in order to develop the kind of financial products that will best serve the individual traders and institutions involved with sports investing. Hockey legend and company spokesperson, Bernie Nicholls, recently commented on AllSportsMarket, "As an athlete I've found the ability to trade sports teams very appealing, when comparing trading a company on the NASDAQ or NYSE, which I know very little about. Investing into sports is twice as exciting. I believe anything that generates more revenue for professional sports will be wildly successful."
Mr. Rabalais said, "The sports industry is the only industry of its size, which has no defined mechanism for price discovery or risk hedging. Our Global Sports Financial Exchange ensures the accountability of nearly every dollar spent in the world of sports. We provide important data on price discovery in relationship to sports and offer an institutional service for risk hedging. Once we are fully regulated our instruments will also offer investment professionals, such as Hedge Fund managers, an investment arena that does not track with the bonds and stock markets."
There are those in the academic world who feel there is a place for such a market among all other relevant financial markets. Dr. Alper Ozgit, from UCLA Economics, recently did a study of AllSportsMarket and Sports Derivatives. He concluded that "AllSportsMarket offers a new financial instrument with an exotic underlying, namely sports performance. Sports Derivatives provide important social and economic benefits."
A former gambler who wished to only be identified as John said, " I had been gambling for about 40 years. It has been about a year (since I started sports trading) and I have not wagered on sporting events since. The thrill is gone. With the option of AllSportsMarket, I see myself never going back to gambling again."
Through financially sound strategy and socially responsible ethics, the G.S.F.E. (GSFEblog.com) feels it has created a sports investment platform that offers a healthy and secure alternative to sports gambling. Chris Rabalais and his team wish to achieve full U.S. regulatory compliance as on over-the-counter derivatives market by the middle of 2007. They plan on using the recent bill signing as a springboard to push their market into full view of the world. With a self-proclaimed trader-base of 13,000 traders in 115 countries and only two years of live market operation, they seem to have a good head start. But only the future will tell if the development of a sports investment vehicle will prove to be the wiser and safer choice over a regulated sports gambling environment.
However, one ideal does remain true, the mixing of sports and money should not be allowed to become a source of crime or be used to finance criminality. It should be used to offer consumers, institutions, and teams a chance for mutually beneficial gains.
AllSportsMarket is an online financial exchange crafted after the same professional trading platform used by the gurus of Wall Street. Traders buy and sell issues in AllSportsMarket sports teams, players, and events with real money. Just like in the real markets, individuals are competing against other players for real cash, earning money from the rise and fall of prices along with dividend payouts. AllSportsMarket acts as a neutral clearing-house, moving profits and losses between the players and earning a broker commission on each transaction.
The AllSportsMarket market operates 24 hours a day, 365 days a year, and the AllSportsMarket support team is available 7 days a week to answer any questions. Individuals can trade as little or as often as they like. Prices change moment to moment so traders can monitor their personal portfolio in real time. For more information or to open an account, please visit http://allsportsmarket.com.
The most valuable commodity I know of is information