As a direct consequence there is little alternative left to all the online gambling enterprises other than to cease their businesses targeted towards US-based users with immediate effect. According to Lasseters Corp Ltd, an online casino operator, the Unlawful Internet Gambling Enforcement Act will reduce the world estimated income generated in this industry by 50% (currently this is approximately $13 billion). The Australian online gambling company Betcorp has announced today the close of its operations in the US market, and many will shortly follow. However, the announcement of the Enforcement Act is not new and, in fact, has been expected since April 2006. Search engines like Google and Yahoo! have banned ads in the US from online casinos and sport betting websites months ago.
The reason cited by the US Government for this strict measure is that internet gambling generates addiction. A study by psychologists Dr. George Ladd and Dr Nancy Petry, of the University of Connecticut surveyed the gambling habits of approximately 400 people. The results showed that although a small percentage of people surveyed were pathological gamblers on the Internet (8%) over more traditional methods such as lottery (89%), Internet gamblers showed the most serious signs of addiction.
After this serious blow to the gambling industry, where companies have seen their shares halved in value in a single day, and executives such as the chairman of Sportingbet and chief executive of Betonsports have been arrested for breaking the US gaming legislation, the future seems uncertain to say the least.
To search engines, it is quite clear that competition will significantly increase during the next few months, amending business targeting from the US to the European market. But yet more restrictions, from countries such as France, Italy and Austria plan to ban foreign online gaming websites and casinos. These measures leave many online gambling companies in a state of limbo, where they will have to decide whether or not to close their businesses altogether - or, alternatively, venture into the international market with uncertain prospects.
Pay per click campaigns will very likely suffer from fierce competition in those countries where it is still legal to operate, but the likelihood of a global ban in Europe on online gambling websites is still unclear.
