Nambling Notes - June 4, 2008

Betsson (Stockholm: SEK 71.25 / No Change)

Betsson said Sweden's National Gambling Board has alleged in a police report that the company's new betting outlet violates the country's Lottery Act.

The act, which took effect in 1994, prohibits unlicensed operators from organizing lotteries.

The board, a governmental body charged with enforcing the act -- excluding criminal matters -- has claimed Betsson contravened Article 38, which states:

It is not permitted, in commercial operations or otherwise, for the purpose of profit to
1. promote participation in unlawful lotteries arranged within the country or in lotteries arranged outside the country, or
2. without the consent of the arranger sell lottery tickets, receive stakes or pass on prizes in lawful lotteries.

In a prepared statement Wednesday, Betsson said it met with the board prior to opening its betting outlet May 30.

"After the meeting the Lottery Inspection (National Gambling Board) agreed with us that some parts of the Lottery Act are dubious and may not comply with EC (European Community) law," said Pontus Lindwall, chief executive of Betsson.

Betsson said it has been threatened with fines, but did not specify the amount sought.

Due to disparity between time zones, Interactive Gaming News could reach neither Betsson nor the board for comment.

IG Group Holdings (London: 380p / - 10p / - 2.56%)

IG Group, a spread betting operator based in London, on Wednesday revealed strong growth across its financial businesses during the fiscal year ended May 31, 2008.

In a trading update, the company said it expects to report an increase in revenue of over 50 percent to an estimated £184 million, or $360 million, versus £122 million in 2007.

IG Group said account openings for its United Kingdom spread betting operation have continued to accelerate at twice the run rate of 2007.

Run rate is an estimation of a company's future performance derived from current metrics.

In a research note, Justin Bates, an analyst with Daniel Stewart & Co. in London, said he expects adjusted profits before tax of £95.5 million, with per-share earnings of 20.1 pence.

Mr. Bates has a "buy" recommendation and 450 pence price target on IG Group shares.

International Game Technology (New York: $35.15 / + 41 cents / + 1.18%)

International Game Technology, parent company to WagerWorks, has entered an agreement to purchase Cyberview Technology Ltd. for $76 million.

IGT said that if it completes the acquisition, it would enter into a patent and technology licensing agreement with Cyberview for a one-time license fee of $9 million.

Cyberview, which provides server-based downloadable gaming technology, called the proposed transaction "beneficial to all parties."

The sale is subject to Cyberview shareholder approval.

"The purchase agreement, along with the patent license, will strengthen our core business and provide access to the fixed odds betting market in the UK," said Stephen W. Morro, chief executive of IGT.