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GNOSIS 1/2010

The Intelligence – between online poker and electronic money


The business
of online gaming


 articolo redazionale


Foto Ansa
 
Italy represents one of the European Union markets with the highest growth in the games sector. The Italian accentuated inclination to gaming, the multiplication of the qualitative and quantitative offer of online games, and the capillary diffusion of Internet, support, in particular, the growth of the games in online version. In this sense, the priority established by the International bodies Committee, constituted at the State Monopolies Autonomous Administration (AAMS) – made up of executive representatives of the State Police, the Carabinieri, and the Guardia di Finanza – of monitoring the sector of illegal games on the Web, come up against an indispensable need of national economic security. The AAMS activities are not limited to the mere recovery of evaded taxes, but also concerns itself with assets that may underlie illegal activities or organized crime. In fact, in the poker online sector, the next introduction of the cash games, that is, of the online poker in a free modality (and not in” tournament formula”) with winnings in money, the attendance in the poker room will grow, favouring also the increase of the collection of cash circulating on Internet. The cash game modality, always the most popular with poker players, will also lead to enormous changes in the online poker industry. The new opportunity, in fact, is already attracting many foreign societies that intend to open a branch in Italy. The aspects of national economic interest in the online gaming industry concerns not only the acquisition of considerable shares of the national section by foreign operators, but alsohas repercussions on collateral industries, in particular, that of the instruments of electronic money, used almost exclusively in online gaming (mainly for traceability purposes, necessary in the fight against money laundering).




Last March 4th, the national press reported the commencement of the activities of a task force constituted at the Autonomous Administration of State Monopolies (AAMS), involving also Police Posts and the Guardia di Finanza, whose objective is to discipline the online poker market and, in general, illegal gaming on the Web.
The view of the AAMS - in a wise and farsighted way – aims more at the prevention of the illegal or illicit phenomenon than at merely counteracting it, particularly in view of the enormous potentiality in terms of turnover on the on line market.


The liberalization of the “gaming” sector in Italy

The “liberalization” (in the wake of a growing consensus already present in Europe) of the gaming sector in Italy was realized with the Article 38 of the Law Decree 4th July, 2006, N 223 (“Bersani-Visco Decree”) (1), converted and amended by Law 4th August, 2006, N 248. The law has generated new types of dealers, added to the three traditional operators of the Italian gaming (SISAL, SNAI and Lottomatica) (2), authorized to sell “game products”, many of which are in the electronic version.
The rationale underlying the “liberalization”, as explained in the preamble of the above cited Article 38, will be found in the desire for enlargement and rationalization of the collection networks, designed to combat tax evasion and avoidance, as well as illegal gambling.
The Law 3rd August, 2009, N 102, which converted the Law Decree, 1st July, 2009, N 78 (so-called “anti-crisis”), introduced further, important modifications to the administrative management of the gaming business.
The Article 15 ter. (“Special Plan to combat illegal gambling”), in the strengthening of fighting illegal gambling, institutes a Committee, at the Autonomous Administration of State Monopolies (AAMS), presided over by the Director General of the AAMS, made up of executive representatives of the State Police, the Carabinieri and the Guardia di Finanza and of the Autonomous Administration itself. According to the same Art.“the decisional activity of the Committee can have access to the contents of a special database, instituted at the AAMS, containing all information deriving from: 1)the ordinary management of public games; 2) control activities carried out by anyone; 3) any other known source”. Furthermore, “the study and elaboration, also technical-statistical, of the informative elements of the database can be utilized for the detection of possible anomalies and risk indices”, on the basis of which the Committee will direct their activities. The name “Committee” defines, in reality, the task force cited at the beginning of this article.
The above mentioned Art. 15., attributes to the Committee (that it avail itself of the help of SOGEI Spa, other bodies of the public administration, public institutions and representative associations), the surveillance in the “definition of strategies and directions, planning and coordination of organic operations, systematic and capillary on the entire national territory, for the prevention and repression of illegal gambling, the security of the game and the safeguard of the minors”. The Committee dedicates particular and specific attention to the activities of prevention and repression of the illegal online games.


Games and anti-money laundering regulations

As of today, the National regulations in matters of lawful “terrestrial” gaming (i.e. not based on Internet) are subdivided into two areas:
- the so-called “public game” managed by the AAMS, which regulates and controls the State concession of lottery (lotto) super-lottery (superenalotto) national lotteries, scratch cards (gratta-e-vinci) games and betting based on sports events and horse racing, bingo and electronic machines for entertainment;
- the so-called “authorized casinos” (gambling houses) societies of wholly public capital, controlled by the grantor administrations (Regions, Provinces and Municipalities) and with permanent internal Principals of the Authorities of the Public Safety. The Italian casinos (of the kind situated in Venice, Sanremo, Campione d’Italia and Saint-Vincent) are all managed by limited companies with registered capital wholly owned by public institutions. The controlling shareholder is, in each case, the same local authority, owner of the authorization for the exercise of the game (according to the cases, Region, Province or Municipality). As far as the anti-money laundering obligations are concerned, the type of activity represented by the “sporting bet” was not, at first, included among those subjected to the sphere generated by the Legislative Decree, 21st November, 2007, N231 (3), to the contrary of which, instead, was determined for the “gambling houses”. This has now been remedied by the Legislative Decree 25th September, 2009, N 151 (4) which has subjected also the activities of the telematics collection of the bets to the anti-money laundering obligations now in force [(5).
If, on the one side, the “liberalization” has compromised the ability to bill huge sums – through the gaming business – by organized criminality (referring to the case of clandestine betting, almost entirely supplanting the legal one), on the other side, it has determined a very fine line between the
lawful and unlawful boundaries, making it much easier to disguise an illegal activity.
According to the report released by SOS Impresa for Confesercenti, in 2007, the proceeds of organized crime in the illegal gaming sector were equal to around 2.5 billion euros. The information is even superior in the analysis done by the Law Enforcement, AAMS and by operators of the sector, with figures in 2007, on average equal to 4 billion euros and in 2008, between 4.5 and 6 billion euros. The amount, however, is still far from the 15-20 billion euros that the organized crime realized annually up to 2000, before the expansion of the Superealotto, the gratta-e-Vinci, the slot machines and the lawful bets created legal alternatives to clandestine gaming. As of today, the principal illegal games include the totonero, the clandestine bets (particularly, on the horse and dog courses) and the video poker games (prohibited since May, 2004, but still massively present on the clandestine market), however, with strongly reduced earnings due to the deregulation. From 2004 until today, an overall 70 billion euros have been recovered from illegal games, of which more than 21 billion euros, in 2008 alone (6) of which, in the first 8 months, 13.8 billion euros attributable alone, to the so-called New-slots (7) .


The growth of online gaming on line

It has been observed how the specific focus of the modifications introduced with the Law 102/2009, particularly with the institution of an inter-organisms Committee at the AAMS, has been placed on activities of prevention and repression of illegal online games. The reason is that the market of the online sports betting represents the principal emergent phenomenon in the gaming business in Italy.
According to Ernst&Young, Italy represents one of the markets in the European Union with the highest growth in the games sector (45.6 billion euros in 2008, excluding the gambling houses) (8). If calculated on the data of 2007, the gaming industry in Italy represents around 2.75% of the GDP. In 2006 and 2007. Italy registered also one of the highest propensities to spend per capita in the world, respectively equal to 599 and 651 euros.
All’interno del comWithin the games compartment, the most dynamic sector is constituted by the online gaming, that is, that group of activities that exploit the Web, both for the collection of bets and for the conducting of the game itself. In 2008, the online game collected wagers equal to 1.5 billion euros (+45% compared to 2007). In the first six months of 2009, the growth rate of the collection was equal to 186%, principally thanks to the launching of the games of skill, operative in Italy since September, 2008 (9). The offer of skill games includes brain teaser games (like Sudoku), strategy games (like Mahjong), sports games (like billiards and chess) and the most traditional card games (like online poker). In the first six months of 2009, the skill games represented 59% of the wagers (10).
In the opinion of Ernst&Young, the very high growth of skill games (also favoured by the backlash of bets from unauthorized sites) could stabilize to around 180-190 million euros per month, added to which is 120 million euros per month from other games, in slight growth. On these bases, an estimate of the overall collection for 2009, for online gaming is placed at circa 3.7 billion euros (+146% compared to 2008).
Different elements that support the growth of online gaming:
- the Italian accentuated inclination towards gaming, further emphasized (paradoxically) by the situation of economic crisis (from 2006 to 2008, the overall per capita expense grew from 599 euros to 790);
- the multiplication of the qualitative and quantitative offer of online games, with the entrance of both National and International operators (compared to the three traditional multi-product operators, SNAI, Lottomatica and SISAL) most of which focus solely on online;
-the capillary diffusion of Internet (60% of the population has access to Internet and spend, on an average, 26 hours per month on the Net), which multiplies the occasions of game. In this sense, the skill games are not seen as “home gambling”, but rather as a moment of entertainment, especially where online poker is concerned, with reduced bets and game sessions not lasting over an hour (11).
The Ernst&Young analysis evidences also important developments concerning the structure of the market. From 2006 to 2008, the number of principal players on the market increased from 9 to 16: the historical players have adopted multi-channel business models (Lottomatica, Codere, Atlantis), two new Italian operators have specialized exclusively on the online channel, Digital Game and Microgame, and in 2009, eight new operators launched platforms exclusively of online poker (Leonardo Service Provider, Lottomatica, Bwin, Snai, SISAL, Cogetech, Eurobet and Intralot (12).
Before 2005, the operations of foreign online gambling operators on the Italian market were realized in a total absence of regulations for the phenomenon. The context allowed them a complete visibility without any kind of limitation, through Web sites in, “.com” domains, residents on foreign servers and dedicated exclusively to such activities.
Soon, the absurdity of this situation became obvious with respect to the narrow regulation of the “outlets” (“physically” present on the National territory) for which, instead, the obligation of a license following a public tender was in force. Furthermore, agents of some intermediaries had also “suffered” investigations of criminal relevance, in Italy, for the management of data transmission centers, but could, at the same time, safely receive bets from the Italian public on their online site resident on a foreign server. The total lack of regulations has allowed foreign operators, although blocked from the viewpoint of the opening of the “outlets”, to enter the Italian market, earning a considerable market quota and a fair turnover (often, with collections superior to those of the Italian bookmaker, thanks to the variety of games present on their sites, the so-called “palimpsest”).
Initially, this confusing situation was contained by the Law December 23rd 2005, N 266 (Financial Law 2006), in which regulations provided for the obligation, payable by the suppliers of connectivity to the Internet network or of the managers of other networks, to prohibit the utilization of the same networks in the case of the conducting of games by operators without authorization of right or entitlement or, however, operating in violation of the norms of law. With the Decree of the Ministry of Economy and Finance of the 7th February, 2006 (13), the AAMS established rules aimed at removing the cases of offer in the absence of authorization, through telematics networks, games, lotteries, wagers or prediction competitions (like the football pools) with winnings in money.
The regulation has sparked off a strong reaction from the foreign bookmakers, taking the form of numerous law suits, both at National and community levels, in merit of the legitimacy, or not, of the measure. The damage to the market, caused by the growing number of appeals and the procedure of infraction started by the European Commission against the introduction of the block, led to an amendment of the rules provided for by the Budget 2006, with the Law 27th December, 2006, N 296 (Provisions for the formation of the annual and long-term budgets of the State – Financial Law 2007), on the basis of which, the task of fixing new rules to remove the online offer of subjects without licenses, will be entrusted to the AAMS. The AAMS has included the criteria in the Decree published on January 2nd , 2007 (14).
At the present time, the regulation introduced by the “Bersani Decree” eliminates the necessity of a license for online betting (as in the opening of the collection points), reducing everything to a simple license issued to the operators already in possession of authorization to conduct activities connected to the game granted by the Country of origin and verified by a special commission named by the AAMS.
The present state of affairs is, that for the collection of sporting bets, many large foreign operators have inaugurated Internet sites on “.it” domains, residents on National servers, which are physically and technically different from sites on “.com” domains, residents on foreign servers and blocked by the AAMS regulation (15).
It should be emphasized, however, how Italian players continue to benefit from the “.com” sites (16),with the approval of the operators, who maintain the translation in the Italian language and send promotional material via e-mail, specifically for an Italian target (for example, bonus for the wagers on the Italian football championships). The access to “.com” Web sites, residents on foreign servers, even though legitimate, due to a series of legal reasons which find their foundation both in the criminal law of information technology and in the regulations of the sector, represents a form of fiscal evasion. The bets made by the Italian players on sites blocked by the AAMS, in fact, deter sums which could be played (and, therefore, taxed) on our territory.

On the 20th of last March, with the authorized clearance received by the European Commission to the AAMS Decree, a further reinforcement of discipline of the online game was started, which awaits only the formalization of the Official Gazette. The Decree (which draws its origin from the Community Law 2008, approved on 23rd June, 2009) shows a revolutionary principle for the online games sector in Italy, affirming that "the online game does not admit intermediaries and must be managed directly by the player".
The network of marketing outlets, tied to a concessionaire on whose behalf, opens and recharges game accounts, cannot, therefore, directly accept wagers. The concessionaire will be expected to promote the development and the commercial support of the game "exclusively through an autonomously remotely managed modality, without the use of equipment to access from remote to the authorized site, located at the commercial premises". A block, therefore, with regard to the transmission of bets from personal computers with preset IP addresses, so-called “totem telematics”, through which one connects to sites of operators who have instructed stores to promote their product in exchange for a commission.
The concessionaire must furnish the player with the possibility "of recharging the games account through the use of the means of payment in conformity with the relative regulations in force and by means of a charge card, exclusively through the selected channel (Internet, telephone, interactive TV), or through remote communication made by the player with the system of accounts of the licensed gaming".
But the real news is in the discipline of the “remotely played skill games with cash prizes” (like online poker), introduced with AASM Regulations (“Discipline of the skill games as well as games of chance at fixed odds) and card games organized differently from the tournament form with remote participation”) published in the Official Gazette of 23rd March, 2010.
Authorizations issued by the AAMS to the dealers concerned are necessary for the official opening of the new “tables” and the start of the new games. The Decree establishes the initial stake for participation in the play session, including successive increments to a maximum of 1,000 euros. For the tournament form of Poker and for the other skill games, instead, entry to the game session cannot exceed 250 euros. As far as the “cash game” is concerned (modality defined by the Decree as “remotely played card games, organized differently from the tournament form, with cash winnings”), the AAMS reserves the right to introduce further limitations to the participation fee.
Added to these limitations in the Play is the bond of self-restraint imposed by the Community Law 2008, according to which, each operator is obliged to ask the player how much he is disposed to play. If the declared sum is exceeded, the player is “out”, and for a certain period of time, can no longer access that site.
In short, poker online in the cash game modality has arrived in Italy. This fact, if not properly managed, could be harbinger of enormous problems.


The expansion of online poker

According to a research published by the Egaming Review,in Italy, by the end of 2009, the volume of business of online poker should have reached the figure of 20 million euros, making our Country the first in Europe, and third in the world. In this sense, the priority established by the International organisms Committee, created within the AASM, of monitoring the online poker sites on “.it” domains and to counteract the non authorized activities of “.com” sites, operating from abroad, come up against an indispensable need for national economic security.
In fact, the said control/protection activities exercised by the AAMS, pose the following objectives:
- micro-economic (the monitoring of the correctness of the game and the protection of the payment instrumented used) (17);
- of system (tax assessments against players who show abnormal behaviour between the amounts wagered – also If not particularly significant – and tax returns). The latter, which is especially important, is not limited to mere recovery of undeclared assessed taxable sums (tax evasion), but investigates also the utilization of assets (referring, for example to unemployed or slackers) who could be involved in illicit activities or organized crime.
The aspects of economic security of the State are found also in the socio-economic reflections of the online poker, which is well highlighted in the EURISPES research (“Italy at stake”), in which a profile of the online player is drawn..
As a whole, around 13.7% of the players nourish a passion for the online games. It is the men (15.4%), compared to the women (11.8%) who have experimented more with the cyber-game. The players have, in 17.9% of the cases, an age of between 35-44, followed by young people between 18 and 24 years old (16%). Only 12.6% of the 45-64 years and 12.3% of the over 65, on the contrary, have tempted their fate via telematics. The most important data for our analysis is that the principal interest of the cyber-players is the online poker (64.3%) (18). The fact which is important is that, for the major part, it is the women who prefer the online modality of tournament participation of online poker. The major part of the online players practices only occasionally this form of entertainment (69%). The 24.8% of those who have a more assiduous frequency with green tables and virtual betting must be added. Instead, the percentage of those who declare a real and proper passion for the online is less, (4.7%). Men, more than women, play occasionally online (73.7% against 62.3%). On the contrary, women seem to be more assiduous in attendance to sites dedicated to such activities. In fact, the 32.1% of the female champions (against the 19.7% of the men) or always (5.6% against 3.9%) frequently use the Web Play offer.
The EURISPES investigation does not consider that the indicated gambling addiction can be seen as one of the possible social risks. It is rather more the case of the players fearing the frauds (scams), the cloning of their credit cards and the stealing of personal data.
Having established why the online poker must represent the principal object of attention of a monitoring activity, it is interesting to evaluate the basic reasons for its expansion.
Since September, 2008, an enormous number of poker rooms have been prepared (or their preparation has been started), subsequent to the issuing of the online gaming licenses. As of today, it is possible, as it is for the sports betting, to play exclusively in Italian (domain “.it”) sites, in which only those players who are connected through Italian providers can compete (19).
The initial phase of experimentation was without cash prizes (so-called“play for fun”) and involved the two Italian online providers, Gioco Digitale and MicroGame, which were interested to test the market and to create a first catchment area. A research of Gioco Digitale done on the players in the poker rooms without cash prizes showed how the density of the fans of this game is higher in Lazio (5.49% of the residents), in Campania (4.48%) and in Abruzzi (4.10%), contrary to what was found in Trentino Alto Adige (1.62%) and Veneto (l.93%).
After the initial experimental phase, the Regulations allowed the introduction of cash prizes although only in the “in tournament” version (20).The legalization of the cash winnings was made necessary, among other things, to regulate an already strongly consolidated market abroad – at a global level, an estimate is equal to circa 24 billion euros, 20% of the entire online collection – and is potentially dangerous because of the quantity of spendable cash on the illegal sites (21).The Ministry of Economy and Finance has quantified the overall collection of the skill games in 400 million euros, in the first year of the legalization (September, 2008 – August, 2009), estimating the potential players at 200,000 (against 220,000 users operating on Web “.com” sites) ready to spend about 2,000 euros per year.
In the first nine months of 2009, the success of the skill games went well over the expectations of the Ministry of Economy, the providers and the operators of the sector. The overall collection was, in fact, equal to 1.6 billion euros, with a monthly average of 178 million euros (against the 60.6 million euros totalized between September and December, 2008), a maximum collection of 211 million euros at September, 2009 (+19% compared to August, 2009), an incidence of 61.1% on the collection of the total of the online games, and over 7 million tournaments in the month of September 2009 alone.
For the online poker player, there are different factors to consider in the choice of the poker room on Internet - that is, the Web site where one desires to play. The suggestions supplied by the Pokerlistings.it are as follows:
- traffic of players (poker sites with a high traffic of players are preferable, since the offer of available tables and games suitable for all types of poker players is just as high. Furthermore, in sites with large volumes of traffic, it is usually easier to find the easy games);
- variety in the types of game (the most known modality, the Texas Hold’em, is available everywhere, but the good poker sites offer also other variants, such as Omaha and Seven-Card Stud);
- poker bonuses (a conspicuous bonus is very useful for those with little experience. There are different types of bonuses, the sign-up bonus, the deposit bonus and the reload bonuses);
- promotions (apart from the bonuses, the poker rooms offer many promotions, such as the satellite tournaments of the major live manifestations and other special tournaments);
- loyalty programmes (the good quality poker sites compensate their most loyal players; in the majority of cases, through accrediting loyalty points, which can be used to play in special tournaments and/or to make purchases);
- software (the best poker sites have a reliable software and clients for poker who are easy to under stand);
- percentage of the ‘rake’ (is the commission that goes to gaming room. In the online context, the rake is practically the same everywhere. Its configuration varies if it is considered in function of the type of game. E.g. dealing with no-limit Hold’em with low stakes, or Omaha pot-limit with high stakes).
The verification of the above indicated characteristics reduce the possibility of finding oneself playing either against “bots” (electronic systems of artificial intelligence which emulate the game of poker) or “shills” (paid players), or against adversaries created at the computer or against “the site” itself.
A collection of the principal online poker sites with the essential characteristics follows.



Table
 



Table
 



Table
 



The national economic security in the online gaming sector

The strong growth predictions for the skill games sector are justified by the ample margins present on the market, in particular, when one considers the introduction of the free modality of online poker (and not “tournament formula” (22) )with cash prizes, which will increase the collection of the 2.2 billion euros estimated per 2009 to over the 3 billion euros estimated for 2010.
The cash game mode has always been the most popular among poker players. The facility with which tables are formed with considerable sums on the Web will certainly attract the best players of the Italian poker rooms.
For this reason, the poker rooms are more than ready to launch the new gaming mode. The international poker rooms (Full Tilt, Titan, Pacific, Everest (23) ) expect to permanently enter the Italian market. Sisal Poker and Poker Club of Lottomatica have already included in their palimpsest of the tables the possibility of playing online poker in cash games, but in the “play for fun” mode, i.e. without real money.
By the middle of May, 2010, we shall already see online the first tables of cash games (24). This mode will bring enormous changes in the online poker, both in terms of organization and of profits (25). This opportunity is already drawing many foreign societies that intend to open a branch in Italy.
The National economic interests in the online gaming sector are particularly significant and the acquisition by international operators of the two national online gaming providers, Gioco Digitale and Microgame, requires pondered consideration. The operations are important insomuch as they lead (as already indicated by Agicos) an inevitable consolidation of the gaming sectors, towards a market that will be composed – maximum – of ten large groups.
100% of the capital of Gioco Digitale (26)was purchased (September, 2009) by the Austrian Bwin (27) for over 115 million euros. The acquisition of Gioco Digitale allows Bwin to become the principal “remote” gaming operator in Italy (poker, sporting bets and games of chance). On the online poker front, together, Bwin and Gioco Digitale are worth circa 25.5% of the market (28).
It is useful to understand, in view of future consolidations, the basic reasons of the Bwin/Gioco Digitale operation, also in light of the fact that, by the analysis of the fees paid, some analysts have expressed doubt over the correct evaluation of the assets. The profitability of the online game not being, in fact, so high (for poker the operators take in less than 10% of the overall collection) a critic expressed the fact that with respect to the price paid, the correct value should have been between 15 and 20 million euros, having to also provide for the unification of the two game platforms (29).
According to Argicos, the real value of the operation should be (more than in the operative synergy) in the acquisition of the clients’ database of Gioco Digitale. Just as Lottomatica evaluated Totosi 40 million euros for its 460 thousand users, Bwin gave “value” to the Gioco Digitale clients. Gioco Digitale, in fact, has more than 80 thousand “active users” per month, and a market quota (at August, 2009, of 19.2%.
Also the other national provider, Microgame S.p.A (30) (with headquarters at Benevento) has recently perfected the increase of the participation (in its capital) of the private equity fund, Monitor Clipper Partners, arrived at a participation of 22.72% (31).
Microgame is one of the major service providers in the online gaming sector in Italy, as well as the market leader in remote gambling, with market shares of poker and betting at fixed odds, respectively, 29% and 30%. At the present time, Microgame manages more than 1.3 million on line game accounts. In 2008, the concessionaires served by Microgame collected over 490 million euros of games and the Microgame revenue exceeded 85 million euros. In October, 2009, Microgame held a little less than a third of the online poker market with cash winnings (29%), while Gioco Digitale touched 20% (32). In 2008, Microgame was the first provider service to introduce on the Italian market its own applicative platform for online poker in network modality.
Today, “People’s Network”is the largest Italian community of players with more than 1,200.000 registered users at over 50 independent AAMS concessionaires and more than 80 active sites.
The aspects of National economic interests in the online gaming sector not only concerns the acquisition of important shares of the National compartment by foreign operators, but also the repercussions on side industries, in particular, those of the electronic money instrument (33), utilized more or less exclusively in online gaming (principally, for purposes of traceability, necessary in counteracting money laundering).
Recently, Microgame has started up an initiative concerning payment systems, launching the “CartaBet” service (a prepaid card of the MasterCard circuit) (34). The agreement between MicroGame and The European Institute of Electronic Money S.p.A (IMEL.EU) (35) allows the player to open an electronic money account with which it is possible to transact all necessary banking operations for online gaming.
With the purpose of containing the possible risk of misuse of electronic money instruments, such instruments being anonymous also to the bearer, in the case of CartaBet, the identification of the punter is required. This card, in fact, is issued to every punter who, through MicroGame, qualifies for the service. The punter is, therefore, automatically and uniquely identified by the system, eliminating in this way, any possibility on the part of the point operator to effect operations of access to the gaming account. With the system proposed by IMEL, the game credits will be transferred onto a corresponding personal account of electronic money entrusted to the management of the Institute and, therefore, whatever movement operations of such credit becomes traceable.
Among the most widely used systems in the world of the online gaming is the so-called “e-wallets” (electronic wallets). The most widely known are NETeller (prepaid card on which it is possible to deposit up to 35 thousand euroes, Moneybookers (which require a checking account to guarantee the card) (36) ), EcoCard, Click-2-Pay, Paypal, Ukash and myCitadel. There are also the prepaid cards, i.e debit cards on which funds can be deposited to withdraw at a later moment, to make deposits into a casino account; among the best known and utilized prepaid cards are EcoCard and Ticket Premium.


Final considerations on the repercussions of online gaming on the criminal economy

According to the above cited Eurispes research, the unregulated online gaming and the clandestine betting occupy a prominent place in the turnover of the criminal economy (overall, estimated at circa 175 billion euroes). Eurispes estimate that the illegal gaming online reaches a business volume of circa 5 billion euros. The data confirms the range previously indicated for 2008 (4.5-6 billion euros) as it resulted from the analysis made by the Police, the AAMS and operators of the sector. If it is considered that the regular collection (that is, legal) for 2008 was 1.46 billion euros, it can easily be seen how the irregular “undeclared” gaming represents a much vaster reality than that of the regular offer of gaming on Internet.
An interesting ramification of Eurispes monitoring of online gaming concerns the social network Face book (37), in which a count of the groups of fans of the game was made, denominated in a different way, depending on the type of game. The investigation revealed, for example, the possibility of playing, through the Face book applications, variants of Poker, Texas hold’em, which boast an increasing number of fans.
In its Annual Report of February, 2009, the National Direction of Anti-mafia (DNA) made it a real point of concern that, on the gambling front: “that alongside of the uncensored subjects, legal holders of concessions or licenses, hidden members of the organized crime work under figurehead names”.Therefore, if so far, clandestine gaming has been thought of only as a threat to combat, from the emergent investigative results today, the interest of organized crime is to be considered as directed towards the ‘legal’ gaming. In the same Report, in fact, the DNA showed the different purposes underlying the interests of the malavita on legal gaming (“…both for money laundering purposes, and allow its territorial network of usurers the availability of an enormous number of potential clients…”).
Such considerations suggest further interpretations with respect to the common vision of the “liberalization” of the gaming sector.
In this respect, in a Meeting held in Venice in March 2006 (38), an expert in the sector, the psychologist-criminologist, Mauro Croce expressed an important concept, according to which, being established the importance of the repression of the illegal gaming: “It might be misleading, reductive – and also not shown – to consider the relationship between legal and illegal along simple logical lines of logic of the mathematical kind, where the increase of legal gaming corresponds to the decrease of the illegal one”.
In this sense, there is the argument according to which the constant increment of the takings relative to the legal gaming (and of the relative tax revenue of the State) derives from a subtraction of always more impressive quotas of the illegal gaming market, increasing the level of legality of the offer to the Italian users.
This evaluation would lead to the thinking that, to prevent or combat the illegal gaming, it would be sufficient to supply major occasions of legalized gaming, besides the repression of illegal gambling.
According to Croce, the interpretation is wider and concerns the possibility that a multiplicative type connection (instead of subtractive), could be triggered between legal and illegal.
At first, this mechanism would come about with an increase of the people who become clients of the gaming industry, favoured by the introduction of new offers, modes and kinds of game, in particular, if based on Internet.
The increase in the number of the players could lead to the enlargement of the area of people with problems tied to gambling itself, in this way, generating new opportunities for the illegal sector, with the consideration of those, vice versa, who would be expelled (or would find themselves in difficult conditions) by the legal gaming industry.


(1) The objectives of Article 38. – measures for counteracting illegal gaming – are the contrast of the diffusion of illegal and irregular gambling; tax evasion or avoidance in the gaming sector, as well as the protection of the player. For such purposes, the Regulations discipline: a) remote betting at fixed odds with modality of direct interaction between the single players; b) remote skill games with cash winnings; c) the characteristics of retail outlets having as a principal activity the marketing of public gaming products, (betting agencies, public gaming rooms, rooms provided for gaming, further retail outlets having as a principal activity the marketing of public gaming products).
(2) The objectives of Article 38. – measures for counteracting illegal gaming – are the contrast of the diffusion of illegal and irregular gambling; tax evasion or avoidance in the gaming sector, as well as the protection of the player. For such purposes, the Regulations discipline: a) remote betting at fixed odds with modality of direct interaction between the single players; b) remote skill games with cash winnings; c) the characteristics of retail outlets having as a principal activity the marketing of public gaming products, (betting agencies, public gaming rooms, rooms provided for gaming, further retail outlets having as a principal activity the marketing of public gaming products).
(3) “Implementation of the Directive 2005/60/CE (European Council) concerning the prevention of the utilization of the financial system for purposes of re-cycling proceeds from criminal activities and financing terrorism, as well as Directive 2006/70/CE, which lays down measures of implementation”.
(4) “Supplementary and corrective provisions of the Legislative Decree 21st November, 2007, N 231, laying down implementation of the Directive 2005/60/CE, concerning the prevention of utilization of the financial system for recycling proceeds from criminal activities and financing terrorism, as well as Directive 2006/70/CE, which lays down measures of implementation”.
(5) Article 7. (Amendment to Art-14 of the Legislative Decree, 21st November, 2007, N 231, has modified Art. 14, Para 1, inserting the letter e-bis) (offer of games, bets, prediction games with cash prizes, also in the absence of authorizations issued by the Ministry of Economy and Finance, Autonomous Administration of State Monopolies, pursuant to provisions of Article 1, Para 539 of the Law 23rd December 2005, N 266).
(6) Cfr. Eurispes, L’Italia in gioco (2009).
(7) The NewSlots are entertainment devices that associate the causality of the combinations to the personal ability of the player. The Budget 2008 established a maximum cost of the bet equal to one euro, a maximum winnings not exceeding 100 euros and a winning probability not below 75%. The parameters identify, therefore, an objective of mere entertainment for the player, rather than pure gambling.
(8) Ernst&Young, Reviewing the Market. The 2009 Global Gaming Bulletin (2010).
(9) Ernst&Young, Online Gambling: analysis of the market and the competitive structures (2010).
(10) The second segment was constituted by prediction games, (“Totocalcio” “The 9” and “Totogol” and by the bets on tote (“Big Match” and “Big Race”), which contributed to 36% of the overall collection. Horse riding, virtual scratch cards and other sports betting constituted the remaining 5% of the collection.
(11) LThe transformation of poker into entertainment phenomenon is demonstrated by the creation of new television formats that integrate on and off line. For example, the players of the Pokermania reality transmitted on Sky Sport were selected through the 27,593 tournaments which were played on the Bwin site (which promoted the reality) and which saw the participation of 341,000 people.
(12) The last two are Italian branches of international operators: Intralot is one of the Greek leaders in the gaming and betting sector, and Eurobet is responsible to the British group, Gala. The Italian version of the poker online site, www.intralot.it approved by the AAMS, and holder of the necessary license to host the Italian poker players, it was launched by Partygaming after an agreement with Intralot SA. The poker room of Partygaming is one of the most important realities of Italian virtual poker, which in the first months of 2009 had already reached proceeds of almost 650 million euros. The site, www.partypoker.it allows the participation in tournaments with real money. The Partygaming group is present in six Countries (Gibraltar, where the Headquarters are: the United Kingdom, Italy, Bulgaria, Israel, Singapore and India, with about 1,200 employees). Also the online operator, Fueps (property of Dada Group, the principal shareholder of which is RCS Media Group, with 49.5%, has joined the Partygaming Network. In this way, also the site “A4 –The Poker Suite” of Fueps is part of PartyPoker.it.
(13) “Removal of the cases of offer in absence of authorization, through telematics networks, of games, lotteries, bets, prediction games with cash prizes”, published in the Official Gazette N 36, the 13th February, 2006.
(14) “Removal of the cases of offer in absence of authorization, through telematics networks, of games, lotteries, bets, prediction games with cash prizes”, published in the Official Gazette N 1, 2nd January, 2007
(15) To make a concrete example, it is sufficient to type in (accessing to Internet with an Italian provider) the sites – www.ladbrokes.com and www.ladbrokes.it, both property if the British society Ladbrokes. In the first case, (www.ladbrokes.com) concerning the English site of the society, which collects the bets of the English market and of the other world markets where no block is in force, (whereas in Italy prefinanziaria 2006) the AAMS block appears, since this site is not authorized in Italy. If we try to open the site (www.ladbrokes.it), it is possible to access; open an account and place bets, since it is authorized by the State and in conformity with the Italian regulations. This phenomenon, if it has led to a limitation, for the foreign operators, of their online offers – let (let us think of www.betfair.it which, in Italy offers a betting site at fixed odds, while www.betfair.com has become a world phenomenon in the peer-to-peer betting), still not allowed in Italy because of the Palimpsest limitations (that is, the offers to the public in terms of events and of the modality of bet offered (www.ladbrokes.com offers, on football matches, also bets on the first corner or on the minute of goal, at present not allowed in Italy) – it has allowed them, however, to profitably enter the Italian market, in view of the limited demand that the Italian player, son of the “totocalcio mentality” asks in the bets, focused principally on the final outcome of the matches (1X2) and on other typologies, in any event, connected to football (Under/Over, Partial/Final). The Palimpsests, therefore, are inferior to those proposed abroad.
(16) The modes utilized that permit this possibility are different. From modifying the HOSTS file of your operating system using the Notepad (Blocco Note) programme, to modifying the properties of TCP/IP with the use of the open DNS (208.67.222.222 and 208.67.220.220) and still other techniques.
(17) With the purpose of broadening the spectrum protection/control of the sector, the AAMS has started numerous negotiations with leader operators (so-called Poker room) in the sector. This is the case, for example, of Playtech-iPoker gaming network that collects over 30 sites with player from all over the world, including Italy, and abnormal collection, with a chief interest on the part of AAMS for Titan Poker, main brand of Paytech-iPoker. This latter platform operates in Italy with main brands like SNAI, SISAL, Cogetech and Virgin, all regularly “.it”. The intention of AAMS is to induce iPoker (as has already happened for Pokestars, Bwin and Unibet, among the principal ones) to freeze the gaming accounts of the Italians registered in the “.com” sites and transfer them to the corresponding “.it” Web site (controlled by Erario).
(18) Following the bets (50.4%), the virtual casinos (30.2%), the Lotto (5.4%), Superenalotto (5.4%) and the lotteries (5.7%).
(19) An opening was provided for at world level, inter-connecting the systems of various Countries and permitting a global game, in which an Italian could challenge an Englishman, as well as a Japanese. From such a practice, however, dangers of “collusion” can originate, when two or more players give appointments at the same table in a poker room to conduct detrimental behaviour towards other players at the table, through agreements made between them, or exploit the effects of an offence committed previously. For example a theft of a credit card or an online account, paying the money contained therein to another player controlled by same or an accomplice.
(20) 20 In the “in tournament” version, the jackpot is formed, in euro, from the combined inscription payments (in correspondence of which an equivalent number of chips are issued). The jackpot is subdivided at the moment of the prize giving.
(21) From a survey Gioco Digitale conducted among the users and taken up by Agicos (Agenzia Giornalistica Concorsi & Scomessi, press agency dedicated entirely to the world of competitions and betting) it emerged that 72.6% of those interviewed had played online poker on unauthorized sites (36.4% regularly, 31.9% sometimes, and 4.3% only once).
(22) According to the provisions contained in the AAMS Regulations (as well as disciplined by the so-called “Abruzzo Decree),poker in the cash game modality (“Collection of card games organized in a different form from the tournament”), indicates poker played with chips which have the same value as real money.
(23) With the acquisition of 60% of the Everest Gaming: (value 100 million dollars), Gaming Mangas, operator of the online games of the poker room of Everest Poker, has further reinforced its position, now placed among the principal poker operators and sports betting on the Internet, in competition with two of the biggest giants of online poker, at world level, PokerStars and Full Tilt Poker.
(24) From 100 to 250 euros are established as the maximum limits to buy-in in the tournaments and 1000 euro per game session in the cash game.
(25) Luca Pagano, of the Italian Team Pokerstars, lucidly explains the difference. “In a tournament a pile of chips are bought and the objective is defend them at all costs to place on the first prize. Once you have lost all your chips, you are out of the game. In the cash game, instead, there’s the possibility to put your hand in your wallet and re-enter. This makes the strategies of the game different, often making it more aggressive and spectacular, and it can happen to be “seen” also with “Marginal Hands”.
(26) Digital Game, besides online poker offers also sports betting and instantaneous telematic lotteries (“on line Gratta e Vinci - scratch cards”), which have represented 6% of the turnover of the society in the first six months. Also in the first half of 2009, Gioco Digitale generated total net proceeds for 20.1 million euros (in 2008, the figure was 13.7 million) and ABITDA, acronym for Earnings Before Interest, Taxes, Depreciation and Amortization, of 9.2 million euros (in 2008, the figure was 1.4 million euros. The Company was founded by the entrepreneurs and veterans of the sector of the Internet games in Italy, Carlo Gualandri, and he was the first concessionaire of Italian games to offer poker in the tournament form, in September, 2008.
(27) Bwin is world leader of the online sports bets, as well as one of the major poker networks in Europe. Bwin offers sports bets, poker, casino games, soft and skill games, as well as the flows of video and audio in sporting events in over 25 markets, regulated by international and local licenses.
(28) Bwin and Gioco Digitale are worth, on the betting front, 13% of the market, while on the front of the online scratch cards are worth 25% of the market.
(29) The platform of Gioco Digitale is still in phase of depreciation (the average life is 3 years).
(30) Microgame, founded in 1996 by Fabrizio D’Aloia, is an independent gaming service provider empowered by the AAMS to operate as supplier of services connectivity to the concessionaires of public gaming.
(31) Contextually, the British Fund Cambria and IFID Srl (which previously jointly held a share of 12%) have abandoned the entire participation.
(32) The two operators, alone, are worth almost 50% of the market. Uniting them to the market shares of Pokerstars and Lottomatica, almost 80% of the entire segment is reached.
(33) We are speaking of the instruments of payment provided for by the Directive 2007/64/EC (relative to the payment services in the Internal Market, and of the Directive 2009/110/EC (concerning the commencement, exercise, and prudential supervision of the institutes of electronic money. At the present moment, in Italy, the electronic money is issued by the principal banks, the Italian Post Office, and by three IMEL institutes authorized by the Bank of Italy., Cartalis IMEL S.p.A., Mobilmat IMEL S.p.A., European Institute of Electronic Money, S.p.A., and IMEL.EU S.p.A. The authorization to carry out the emission of electronic money to the IMEL is issued by the Bank of Italy, in accordance with the Circular 253, of the 26th March, 2004 (“Monitoring Instructions for the IMEL Institutes”).
(34) The CartaBet smart card allows the withdrawal of cash winning directly from the “Operating Point”. CartaBet (associated to an electronic money account at IMEL.EU, allows all the operations of a normal electronic money account (transfers, payments, receipts and other). The account can be re-charged in cash at the Operating Point, or by making a transfer, since the electronic money account is identifiable on the banking circuit with an ABI (36002) Code, a CAB (53570) Code, and the number of an Electronic Account, which is the equivalent of the checking account number of the banks. Institutes of electronic money and banking institutes converse telematically among themselves, using, without distinction, the electronic account number, and the bank checking account number. Plus, CartaBet allows betting also on the Internet, as well as at the Operating Point.
(35) The 100% of the shares of IMEL.EU S.p.A, is held by Index Europea S.p.A. Index Europea S.p.A. is the official concessionaire for the collection of the sporting bets, C.O.N.I. N 3554, and N 4400 for horse racing, authorized by the AAMS and it is also qualified for the telematic collection via Internet at site www.indexbet.it and via telephone. The technological platform of IndexBet.it uses identifying systems of the banking world based on the smart card and cell phone technologies.
(36) Moneybookers, founded in London, in 2001 and regulated by the British Financial Services Authority,It is one of the online payment systems. The continual growth of the use of prepaid cards to fund online casino accounts has spurred Moneybookers to produce their own prepaid card – the Moneybookers MasterCard.
(37) At the beginning of 2009, Face Book counted circa 140 million users in the world.
(38) Meeting on "The new scenarios and the protection of the players of games of chance", Venice March 25th 2006.

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