E-commerce
E-gambling Takes Off
Vanuatu Is Now A Leading Site To Register On-Line Gambling Companies.
The range of revenue drawn on by the Vanuatu government isn’t wide. It doesn’t include income tax because there isn’t one. Last year’s collection of 6,996 million vatu (about US$48 million), came mainly from import tax, VAT, fees and spin-off from such sources as Vanuatu’s tax haven business and its international shipping registry.
By the end of 2001, license fees and a cut of the gross profit from the Internet gambling business it is licensing should be boosting revenue by what could eventually become a significant annual sum. One locally owned business is running already under legislation approved by Parliament in March 2000.
At least one major Australian gambling business is preparing to set up in Port Vila, the capital. Another, IDPL, which formerly traded as Casino Australasia, has been bought by Southern Equities Holdings Ltd., which is owned by the Australian Waterhouse family gambling business, and will be a sports betting operation.
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“That is a pretty good coup for Vanuatu,” says Geoff Sheehan, of Interactive Gaming Consultants Ltd., a company that is contracted by the Vanuatu government to supervise business for it.
He says that the minister of finance and director of customs and inland revenue have so far issued four gambling licenses. Two have traded successfully over the Internet, Sheehan says. “One is doing quite well. The other three are in the process of purchasing systems and having them audited prior to getting approval for taking bets for money. They should all be up and running by the end of the year.”
The future of Internet gambling in Vanuatu? “How long is a piece of string?” asks Sheehan. “We are currently working with 10 or 12 serious companies and they are either concluding due diligence on us as a jurisdiction or are preparing license applications. There are another 15 companies who could be considering the due diligence process.”
The issue, he says, is that operators will pick the jurisdiction that gives them the greatest legal protection and cheapest cost. Vanuatu charges a US$75,000 license application fee, a US$50,000 annual fee and 2.5 percent of the operator’s gross profit. A license holder must have a physical operating presence in Vanuatu. A small business might need six staff, a larger one as many as 25, Sheehan says.
Vanuatu’s decision to license Internet gambling was followed by numerous business jet flights to Vila carrying Australian operators anxious to check out the scene, a Vila resident told Pacific Magazine. Until mid-2000, Australia led the establishment of interactive gambling. Then the government, under pressure from anti-gambling lobby, announced a 12- month moratorium.
Since they were uncertain of Australian government policy, gambling businesses couldn’t decide whether to choose Australia or such other jurisdictions as Vanuatu to invest in opening Internet gambling sites.
An executive of the Packer family’s Publishing & Broadcasting Limited was reported in May as saying that its Internet gambling team had been looking at Vanuatu for some time because of Australian federal curbs on Internet gambling. It was “certainly the most likely destination.” A Sydney Morning Herald report said the $US75,000 license could bring Publishing & Broadcasting Limited A$50 million to a Packer-owned Internet casino in its first year of operation.
For someone prepared to take bets from Americans, with a reasonable advertising and marketing strategy, they should be turning over US$30 million a month at the end of 12 months for a gross profit somewhere between 3.5 and 3.6 percent. “That’s if all things are equal,” Sheehan said.
Photo: Robert Keith-Reid
