Nambling Notes - Dec. 14, 2001

Tidbits from the Far East -- This week the Macau government began examining bids from the 21 gaming companies vying for casino licenses in the territory. Macao is preparing to do away with its monopolistic gambling industry and replace it with a competitive system. Since 1962 the Sociedade de Turismo e Diversoes de Macau (STDM), which is owned by Stanley Ho, has been the only gambling business allowed in the Chinese enclave. According to the South China Morning Post, two American investors have said they are willing to invest between $1 billion and $2 billion in Macau's casino industry if they are awarded licenses. Bidders for the 25-year licenses include MGM Mirage, Aspinalls and Hong Kong real-estate mogul Nina Wang.

Plans for India's first online lottery were announced this week by the K K Modi Group, which will operate the lottery under the name MWC Market Services Pvt. Ltd. The Indian company is partnering with Victor Chandler International and GTECH for the service, which is to be launched on May 1 and will include 8,600 lottery terminals divided among 166 cities in India. Lalit K. Modi, chairman of Modi Enterprises, said the venture will endeavor to bring respectability to the game, which is looked down on in India. "The ills of lotteries in India have resulted in a fair degree of disenchantment with what is essentially an entertainment avenue," he said. "The glamour, glitz, the fun and fling with fate has been replaced by disgust and disinterest."

Tidbits from Australia -- New South Wales' TAB Ltd. is not supporting other bookmakers in the state who are calling for a decrease in the turnover tax rate and a cut in the minimum phone bet. The betting agency said instead of throwing in with the rest of the bookmakers, it would prefer to see a wider debate on the financial operation of the country's betting business. Warren Wilson, TAB's managing director, said the opportunity is ripe to examine the state's betting structure. "There is a strong argument for a serious look at the funding structure of racing in this state as well as who pays what to government in terms of betting taxes," he said. Bookmakers in NSW are concerned about a ruling that places the minimum phone bet at AU $200 and say their turnover tax of 2 percent is twice the amount bookmakers in other states pay.

Doctors in Victoria are being trained to recognize gambling problems with the help of the Melbourne and Greater South-Eastern Divisions of General Practice and Gamblers Help City. The organizations have developed a problem gaming education kit to inform medical practitioners about the physical symptoms common to people addicted to gambling, which include headaches and irritable bowel syndrome. AU $70,000 in funds gained from gambling taxes will go toward distributing the kits to about 7,000 doctors in the state.

Makin' Deals -- Microgaming, one of the major software suppliers for the online gaming industry, announced this week that it's restructuring its licensing fee system. The company, which has seen a handful of its largest bread winners defect to other software suppliers in recent months, has introduced a tier-based program which has licensing fees decreasing as licensees' revenues increase. Officials from Microgaming couldn't be reached for comment.

Access Gaming Systems announced a deal this week with geo-location provider Quova. Access, which provides e-commerce systems to gambling businesses, said Quova's technology will help it better regulate which online gamblers are logging in from jurisdictions that outlaw I-gaming. Quova's GeoPoint program pinpoints the geographic location of computer users via their IP addresses. Austin, Texas-based Multimedia Games Inc. gave an international license for its MegaBingo game to Montgomery & Associates, a company owned by Larry Montgomery, who was the director of MGAM until he resigned this week. The company also announced this week that it is selling 200 MegaNanza player stations to the Liberia National Lottery in Monrovia, Liberia. Montgomery has a 10-year management service agreement with the Liberian lottery. Montgomery had been with MGAM since 1992.

Breakin' Deals -- After six futile months of negotiations, Magna Entertainment Corp. and Television Games Network are parting ways. Jim McAlpine, the CEO of Magna, said during a speech at the University of Arizona Racing Symposium that his company had offered to trade content from its tracks in exchange for TVG content, but that TVG rejected the proposition. McAlpine said TVG's exclusivity contracts with two dozen tracks means that as soon as account wagering becomes a reality in California, bettors will have to open two separate accounts with TVG and Magna in order to bet on the tracks carried by each business. In other TVG news, the company had success recently with its In-Coming! direct marketing service. The marketing company said this week that its last e-messaging campaign for the race betting company resulted in more than 50,000 new opt-in subscribers and more than 1,000 new wagering accounts for the horse-racing network.

Tidbit from the South Pacific -- Nauru is drafting last-minute legislation in an effort to prevent it from becoming the first offshore haven to undergo sanctions from the Financial Action Task Force due to money laundering, Tax-News.com reported on Tuesday. The island joins Russia and the Philippines in the "uncooperative " category, although it was the only country to attract the FATF's ire recently. The organization, composed of 29 member countries, said Nauru has been lax in trying to prevent money laundering and tax evasion. Possible sanctions include preventing the island's banks and financial institutions from getting new banking licenses and the FATF releasing warnings about doing business in the country. Mathew Batsiua, the chief secretary of the republic, said it has adopted amendments to its anti-money laundering legislation to more clearly define offshore banking. He said officials will "investigate any credible evidence that Nauru had been used by the Russian mafia, or any other crime organizations, to launder money."

New Stuff -- The much-anticipated attheraces horse-racing site launched its information and betting service on Wednesday. The site, which carries races from 49 U.K racecourses, has Arena Leisure, BskyB and Channel 4 as investors. The attheraces digital television channel is scheduled to launch in May. Next Generation Gaming will open an office in Las Vegas during the first quarter of 2002. The interactive slot machine game creator opened a London sales and marketing office last year and has headquarters in Sydney. The new U.S. office will be lead by Mario Castellari, one of the company's founding partners and a former vice president of games design for IGT. Interspace Enterprises announced completion of planetlotto.com this week. The site features a progressive jackpot, a bonus play jackpot, hourly jackpots and bingo and scratch cards.

The Lac Vieux Desert tribe of the Lake Superior Chippewa Indians, already known for its aggressive approach to gambling and the Internet, is putting the finishing touches on beta testing for a new Web site that will offer bingo games online for real-money play. The site will enable users to connect to a server and participate in bingo games held at the tribe's bingo halls in Michigan.

An Irish Tidbit -- Paddy Power is not impressed with Irish Finance Minister Charlie McCreevy's reduction in the betting tax to two percent from 5 percent and said this week that it plans to leave its telephone and Internet betting operations in the United Kingdom. Following the announcement of the betting tax cut, Paddy Power, which is owned by Power Leisure, said it would consider whether subsidizing the tax for Irish customers would be possible for the company. "Historically, a reduction in betting tax has led to an uplift in betting turnover," the company said in a statement. "However, given the small scale of the reduction, it is difficult to quantify the potential impact."

New Faces -- attheraces, a new U.K. race betting site, said this week at the University of Arizona's racing symposium that Fair Grounds president Bryan Krantz will be the company's U.S. representative for overseas online wagering. Krantz is being hired to help negotiate simulcasting contracts with U.S. racetracks. attheraces will initially carry racing from the Fair Grounds and two or three other U.S. tracks. When races in the United States are carried live in the United Kingdom, it fills a hole in race betting programming, said Scott Finley, the company's development manager for North America. "What's in favor of all this is that there is no product to bet on in the evenings in Britain," Finley said. "Fair Grounds' time zone is perfect." Races that take place at the track at 12:30 p.m. would be broadcast at 6:30 p.m. in London.

A Meeting of the Minds -- Fifty representatives to the World Lottery Association recently gathered in Punta del Este, Uruguay to discuss online gambling. The conference, hosted by the Banca de Cubierta Colectiva de Quinielas de Montevideo, included discussions on security, marketing and legislation as they relate to I-gaming via computers, mobile phones and digital television. The participants, who were from 20 countries, heard I-gaming updates on Finland, Sweden, Norway, Iceland, Germany, France and Austria. The Loteria de Concepcion in Chile during the first week of December became the latest lottery to launch online operations. The lottery industry's next Internet-related event will be a joint conference of the WLA and the European State Lotteries and Toto Association next fall in Vienna.

In Other Words -- "What Goodlatte and other anti-gambling legislators fail to recognize is that technology moves much faster than laws that attempt to regulate it. If his current bill passes, will he then craft new bills to outlaw wireless gambling that crosses borders, or interactive television operations that more easily enable online gambling? The representative's efforts are an example of outdated legislative thinking attempting to impose unrealistic demands on an emerging, global industry. If Goodlatte wants to make a real contribution, he should concentrate on ensuring individual freedom of choice, while reasonably regulating an industry that is inevitably going to find a way to operate in the new economy."

-- Paul A. Greenberg, E-Commerce Times, Dec. 12, referring to U.S. Rep. Bob Goodlatte's, R-Va., persistence in trying to pass anti-Internet gambling legislation.