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Feds taking no chances

Marketplace Staff Jan 22, 2007

TEXT OF INTERVIEW

SCOTT JAGOW: Last fall, this country essentially banned Internet gambling. Congress made it illegal to do business with online gaming companies based overseas, but the FBI must believe Americans are still playing. The Feds are asking British investment banks to turn over records on these gambling websites. The FBI wants the goods on the people who run them. Justin Urquart-Stewart is a fund manager with Seven Investments in London. Justin, what do investment bankers over there think about this?

JUSTIN URQUART-STEWART: This has certainly raised quite a few eyebrows on this side of the Atlantic. Not just because of this particular inquiry but actually because it fits in with a sort of pattern that’s been developing over the past few years. Then this action seems to be taking it a stage further whereby you’ve got U.S. domestic courts demanding of U.K. authorities that overseas information — records, telephone calls — be handed over. And this is seen as a further extension of American, I suppose, interference.

JAGOW: Well Justin, what’s the connection between investment banks and Internet gambling companies in the first place?

URQUART-STEWART: Well this all developed over the past few years in the growth of entertainment, if you call online gaming entertaining, but it is seen as being a huge growth area. Domestically all countries have controls over gambling. But when it comes to online gambling, this was a new area, seen to be relatively low-cost, relatively low capitalization and the opportunity for huge profits. So these investment banks saw this as a key area to grow into and you saw a proliferation like morning mushrooms of these companies over the past five or six years.

JAGOW: Do you feel like there’s a different attitude about Internet gaming there in Britain versus here in the States?

URQUART-STEWART: Yes, Internet gaming in the U.K. isn’t necessarily wildly approved of but it’s not seen as being necessarily something particularly abhorrent or evil. Equally of course in the United States domestic gambling is seen to be much more popular than it is actually in the United Kingdom where we don’t have the super casinos and Las Vegases of this world over here.

JAGOW: OK Justin, thanks a lot.

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