Offshore Strategies Protect Online Gaming Industry, Like Other Multinationals

David Carruthers, the former chief executive officer of BetonSports.com, was arrested on July 16 while changing planes in Dallas, en route from London.
 
But, other online gambling companies are seeking to ensure that kind of tragedy never happens again, and are adopting more aggressive offshore location strategies, shielding themselves from the overzealous U.S. government, like entrepreneurs in other industries have had to do in the past, so they can continue to serve their customers in the growing, $12 billion a year online gaming industry, said Ron Mendelson, the director of offshoreXplorer.com, a company that specializes in protecting the assets of wealthy executives, and entrepreneurs.
 
Multinational corporations like McDermott, Inc., Helen of Troy, Inc., Triton Energy Corporation, and Fruit of the Loom, Inc., Tyco International, Ingersoll-Rand, and Cooper Industries relocated their headquarters overseas – from the U.S. to locales like Bermuda -- during the 1990s and earlier this decade, basically to reduce their tax burdens. Now, entrepreneurs in the e-commerce market of online gaming are following the strategy, experts are telling Onlinecasinocrawler.com.
 

Fruit of the Loom Relocated Too

Not only American firms are eyeing the shift. The online gambling market in Germany is expected to grow from around EUR 640 million in 2005 to EUR 1.2 billion in 2010, or $1.2 billion, according to a study by Goldmedia, and many executives there are leery of over-burdensome government regulation too.
 
"It is more important than ever for online gaming organizations and their principals to ensure they have complete and proper offshore protection strategies in place,” said Mendelson. “Complete offshore protection is crucial.”
 
Mendelson said the first step in offshore protection is to incorporate one’s gaming business offshore. “There are a number of countries in the Caribbean that are well suited to hosting an offshore venture,” said Mendelson. “They have very strict privacy laws, so identities can remain hidden from the public.”
 
Though it is unlikely that the U.S. Congress will pass a ban clearly prohibiting online gambling this fall – Senate Majority Leader Bill Frist (R-Tenn.) said so himself last week – the feds could come back next year and try again. Thus, another part of a complete offshore strategy is an offshore bank account.  “This way a company never has to do its banking through the U.S. and their banking activity remains private,” said Mendelson.

Protection Strategy

What is more, Mendelson said, with an offshore presence, gaming entrepreneurs will also be able to protect them from litigation, and from excessive taxation.
 
“It is extremely important to enlist the help of an offshore specialist when considering moving offshore to ensure your offshore presence gets off to a proper start and is structured properly,” said Mendelson. Such specialists have lawyers and accountants on their teams.  “With all the proper precautions in place, one can rest much easier, knowing their affairs are in order and well protected,” said Mendelson, who has noticed an increased interest in offshore incorporation in recent weeks, though the gaming industry already does have many firms overseas already, in the Caribbean, as well as Gibraltar, and elsewhere overseas.

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