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Online gambling finds a new home

Miranda Kennedy Nov 22, 2006

Online gambling finds a new home

Miranda Kennedy Nov 22, 2006


MARK AUSTIN THOMAS: $12 billion. That’s how much money the online gambling industry made last year. Half of that came from U.S. residents. Since the ban against online gambling here, Internet casino companies have been forced to look elsewhere like Europe and Asia. Internet betting is still pretty new in Asia, but there’s one country that’s staking its bets on the industry. Miranda Kennedy says the Philippines have rolled out the welcome mat for online gambling companies.

MIRANDA KENNEDY: Online casino companies have flocked to the capital Manila in the last year. Internet gambling firms have already nearly filled up a whole office tower in downtown.

It makes for a very strange use of office space, as I find out when Wilson Choi shows me around the internet gambling studio of King World Casino.

WILSON CHOI: So they’re dealing the cards right now. Let me show you . . .

It’s a plush-carpeted room full of casino tables. At each table there’s a woman in her 20s, facing a couple cameras, with a TV tuned to a Chinese station behind her.

CHOI: So in order for them not to have doubts we have put on a TV.

KENNEDY: Oh really, so this is just to prove that it’s not rigged.

Every 30 seconds, while some women deal out cards for games like poker and Baccarat, other women roll dice on an automated machine.

It’s only 10:30 in the morning but already more than 6,000 gamblers in China, Hong Kong and Taiwan are making bets on King World’s website.

KENNEDY: It’s very repetitive. And now sit there and start taking bets again.

CHOI: Yeah, and smiling.

KENNEDY: You have to be good at smiling for this job.

Choi says appearance is the most important factor when he’s hiring, because he believes losing bettors won’t get as mad if they see a pretty face. The women earn about $300 a month, which is a lot higher than minimum wage in the Philippines.

Rene Nunez, with the Filipino licensing authority, says the government saw the potential for employment and tax revenue. So it started issuing licenses for Asian gambling. It’s the only country in Asia that does.

RENE NUNEZ: Maybe we’re just ahead of them. Maybe we’re just ahead of everyone else in thinking this would be a good entry point into that kind of industry.

So far the Philippines only has a sliver of the world market. That’s because outside of Korea and Japan, few Asians have broadband Internet.

There’s also no culture of making e-payments, so a lot of people are skeptical they’ll actually get their winnings. But Jason Chan, a gambling industry expert in Macau, says Asians have always been big bettors. He’s certain online casinos will take off.

JASON CHAN: It’s all changed since the Philippines took the first step. So since the Philippines took the first step issuing gambling license, it changed the attitude of Internet gambling to other countries.

Chan predicts other Asian countries will legalize online betting in the next couple years. And that may bring some relief to companies reeling from the U.S. crackdown on internet gambling.

Since the ban, Chan has had dozens of inquiries from operators looking to Asia for a new home-and new gamblers.

In Manila, I’m Miranda Kennedy for Marketplace.

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