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Gambling via Mobile Device – Constraints and Opportunities

Online shaming

The online gambling industry generates billions of dollars annually and is one of the burgeoning industries on the internet today. The growth of this industry spurred online gambling operators to search for additional operating channels, besides PCs and laptops, such as applications customized for mobile phones and handheld devices that may be used on membership-based websites (such as online casinos).

Thus, the mobile channel is becoming a primary channel in the online gambling industry.

Considering the heightened use of mobile phones in general, online gambling operators are also seeking to offer their products via this channel – similarly to any other electronic commerce.

Additionally, the opportunity being given to online gamblers to continue gambling when they shift from their PC platform to their mobile phone platform while using that same operator and a single electronic wallet (which is synchronized with the operator’s internet version and mobile version), increases customer loyalty to a particular gambling operator and to its brand.

Furthermore, the expansion of access to gambling products also via the mobile channel lures customers to spend more time gambling, thus enabling online gambling operators to generate revenues from customers at a faster pace (than prior to the advent of the mobile application) and increases the “value” of these customers and the revenues generated from them.

A similar channel exists in handheld devices, which enable customers who are visiting real casinos to continue gambling during their stay at the casino, even when they are outside of the casino halls, but still on the grounds of the casino complex (such as in the casino’s hotel rooms and public spaces, for example, at the pool, in one of the restaurants, etc.). This possibility, which is available in some casinos in the United States, also offers casinos potential growth in revenues and profits by providing access to gambling outside of the actual casino halls, while avoiding regulatory constraints and capital expenditures on physical expansions of their casino halls.

That being the case, the use of the mobile channel undoubtedly offers significant potential for the online gambling industry. However, concurrently, this channel also poses significant constraints, mainly in terms of regulations.

Firstly, the fact that this is a virtual channel raises the question of the law and regulatory regime applicable to online gambling via the mobile channel – whether the particular regime permits or prohibits online gambling. For example, let us assume that a Spanish citizen and resident, who has a gambling account with a Spanish licensed gambling operator, wants to use the said operator’s mobile application while he is staying in Holland. Will Spanish law, Dutch law or some other law apply in this case? Prima facie, the Spanish customer is “carrying” his gambling account with the Spanish operator in his mobile device, but, on the other hand, he is seeking to gamble while he is in Holland (which bans online gambling), using the Dutch communications network.

These issues also exist generally in the general online gambling industry, but the mobile channels highlight the salience of the aforesaid regulatory issue, mainly because it has become a far more widespread issue. The more extensive the use of mobile channels in the online gambling industry, the closer the world gets to the point where it will become essential to find a satisfactory solution to this issue.

Furthermore, the expansion of the online gambling industry into mobile channels could serve as ammunition for the most ardent opponents of this industry. One of the strongest arguments being made in the battle against online gambling is that the evolution of this industry will turn every computer into a casino in a way that substantially facilitates access to gambling, since mobile phones are ubiquitous among the general population. – and thus serves to promote an inconceivable increase in gambling addicts (one extreme scenario that is repeatedly mentioned is that of teenagers – who, as minors, are banned from entering physical casinos – who become rampant secret gamblers via online gambling websites up in their attics). Considering the incessant battle between the opponents to the online gambling industry due to the inherent phenomena involved (or at the very least, due to the phenomena that online gambling opponents claim are inherent in this industry) and proponents of online gambling, who are seeking to regulate the industry through legislation, any development, even merely of a technological nature, could impact the regulatory regime that will eventually be instituted. Even in the United States, where gambling is firmly established, there is a persistent battle at the federal level over whether or not all kinds of online gambling should be prohibited by law. Considering the Republicans’ control over the U.S. Congress, and the support of legislation banning online gambling by the casino magnate, Sheldon Adelson, one cannot rule out the possibility that the expansion of the online gambling industry to mobile channels might, in the final analysis, be the last straw that leads to its downfall.

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