September 18, 2009 (CAP Newswire) — Writing for the Kiev Post, James Marson has examined how gambling businesses in the Ukraine have moved to the Internet to stay afloat in the face of a severe gambling ban enacted by the government several months ago.
Apparently, this is possible because of a loophole in the law. Businesses are now re-naming themselves “interactive clubs”, “Internet complexes”, or “interactive clubs” and moving their bases of operations to nearby countries.
“The law banning gambling came into force at the end of June, but it hasn’t taken long for a loophole to be found,” Marson writes. “New clubs have sprung up around Kyiv en masse in the last two weeks. Experts warn that if these places experience no difficulties with the police or in the courts, many more are likely to follow.”
“The ban is being circumvented legally,” said Danylo Getmantsev, author of a book on gambling in the Ukraine. “The server is set up in another jurisdiction [offshore], where gambling is permitted, and here the owner [of the establishment] is simply an agent providing access.”
For the government to continue to try to ban these businesses, new laws would have to be implemented targeting online operations. The result? A classic example of how government prohibition of gambling — offline or online — leads to situations where gambling remains just as popular, but with the profits (which are considerable) going directly underground or offshore. No government should be comfortable with that.