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Lax Net gambling laws may help U.K. thrive

The United Kingdom is poised to take a big chunk of the online gambling market, new research says, which could help it lead Europe in online consumer sales by 2005.

By Peter Judge

Although its broadband availability trails many other European countries, the United Kingdom could lead Europe in online consumer revenue by 2005 thanks to its relaxed attitude toward Net gambling, according to new research.

According to research from Schema Consulting, $38 billion will be spent on online entertainment in Europe in 2005. The figure is based on an estimate that online entertainment will make up 6 percent of entertainment spending, which itself will make up 8 percent of the expected $8 trillion in disposable income in Europe that year.

Online gambling will be the largest industry, Schema says, making up 39 percent of the total, with multimedia second, at 29 percent, and games providing 13 percent.

But surprisingly, the United Kingdom will take 35 percent of the overall spending, said Schema President David Brown, because it is more accepting of gambling, and other countries are more likely to have laws restricting it. Germany will take 15 percent and France 14 percent.

The research also looked at Internet access capability. It found that Germany has the highest DSL (digital subscriber line) penetration by far, with around 3 percent of its lines converted. By contrast, the United Kingdom's 0.3 percent is behind every country except Greece, Ireland, Portugal and Luxembourg.

The adoption in Germany has been particularly high because of the previous launch of ISDN (Integrated Services Digital Network) and the fact that Deutsche Telekom was able to effectively prevent flat-rate dial-up access, said Brown, who presented the figures at a conference in London this week.

"Most countries are between 1 percent and 5 percent" of the population with DSL, he said, "and growth rates are around 100 percent. Most countries should reach 10 percent by around 2004."

Staff Writer Peter Judge reported from London.