Online gaming in the UK came a step closer last week following the publication of the Government's 'A Safe Bet for Success' document in response to recommendations made last July by Sir Alan Budd's gambling review body.

British operators will be able to offer gaming products via the internet, iTV and media such as interactive kiosks, and advertising restrictions will be relaxed.

The Government realised it could not stop UK consumers accessing online casino and fruit machine-type games and recognised the potential of the international market - forecast to be worth pounds 11 billion by 2006, according to the Interactive Gambling, Gaming and Betting Association (iGGBA). 'It means the UK can steal a march on jurisdictions that have failed to address these issues,' says Tobin Prior, chief executive of global gaming giant Sun International's digital arm, SunOnline, which operates its Atlantis Casino via a licence in the Isle of Man.

A spokeswoman for the Department of Culture Media and Sport (DCMS), which regulates gambling, says a Bill will slot into the Parliamentary calendar in the 2002-2003 session at the earliest, adding that it is in the Government's interests to act quickly. 'The longer we don't allow online casinos, the more problems there will be with under-regulated, non-UK sites.'

A Gambling Commission will be set up to ensure Britain establishes a reputation for safe, licensed online gaming, and to create a kitemark for regulated operators.

Prior points out that any jurisdiction is going to take time, 'as there are a lot of issues to address', but adds that the UK is still ahead of the game.

The Rank Group, owner of Mecca Bingo and Grosvenor Casinos, is not waiting for the regulations to come into force.

It has already introduced a pounds 1 million prize using its fixed-odds licence - there are no restrictions on fixed-odds prizes - and will establish an online casino in the interim. 'The Isle of Man is a reputable jurisdiction and we're comfortable having an online casino there,' says Damian Cope, managing director of Rank Interactive Gaming. 'Commercially, we can't afford to wait two or three years for legislation.'

One spin-off effect of legislation could be a rise in the value of web gaming firms, which will have investors licking their lips.

Bundeep Singh Rangar, chief operating officer of venture capital firm Ariadne Capital, which has a stake in casino site Bethedealer.com, believes it is too early for investors to cash in their chips.

'It's hard to put a timescale on it, but we're not focusing on an exit strategy yet,' he says. 'The developments will help sites secure further funds.'

Singh Rangar expects pubs to profit, too - from interactive kiosks, if they take up an option to have drinking and gaming operations on the same premises.

Rank Interactive is also going after the mass market. 'We'd rather have thousands of 20p players than a few high-rollers betting large sums,' says Cope.

'People like to play games that entertain them and give them a chance to win money. It's not scary or difficult to play and it won't bankrupt them.'

The Government says it will work with the industry on detailed proposals prior to the legislation, but Cope wonders whether there will be a limited number of licences and whether offshore companies will be allowed to advertise in the UK.

'There is no reason why there should be a finite number of licences,' rebuts the DCMS spokeswoman. 'And there's no mention of offshore companies and advertising. Areas such as these need further discussion.'