Nambling Notes - Dec 15, 2000

Tidbits from the US -- Now that the election is settled, it's time to mull the new administration's potential effect on the gambling industry. According to a Las Vegas Sun Article, Nevada casino industry leaders are, for the most part, "optimistic that gaming will get fair treatment from a George W. Bush administration." Of concern, however, is the fact that Bush opposes gambling in his home state of Texas. Regarding gambling, Kenny Guinn, chairman of Bush's successful Nevada campaign, said that Bush believes in state's rights. "I think we'll have an opportunity to talk to him one on one if necessary and that's always important," Guinn said.

"I don't think from a gaming standpoint, with the issues we have before us, it makes any difference whether Bush or Vice President Al Gore were president," said American Gaming Association Chairman Frank Fahrenkopf, a former chairman of the Republican National Committee. "Both believe in states rights. "Our battles are going to be in the House and Senate. They're not going to be in the White House."

The future Bush administration's position on Interactive gambling is anybody's guess, although some have speculated that Arizona Senator Jon Kyl, the sponsor of the Internet Gambling Prohibition Bill, is a candidate for Attorney General.

Getting back to the House and Senate, U.S. Congress has entered the final days of the session, and Internet gambling prohibition has remained out of the spotlight. It's not over yet, but a source has confirmed that appropriations legislation has been wrapped up without the prohibition bill tagged onto it.

A recent Knight Ridder article revealed that the delay in determining who the next U.S. president will be had punters who placed bets on the election in a bit of a tizzy. Odds maker Haden Ware says his Net betting firm, World Sports Exchange, was sitting on $500,000 in wagers placed within the past two years, and that customers were getting restless. "People are furious their money is tied up,' Ware explained. "People who bet on Bush were calling Sunday when Florida certified its votes for Bush wanting their money. I had to tell them, 'That's not it. I'm waiting until Al Gore makes that concession speech.'' The bets were finally settled Wednesday when Gore conceded.

Many miles to the north, Ware's colleague, WSEX President Jay Cohen will appear on CBS's "60 Minutes" Sunday. The appearance will mark the first time Cohen has been interviewed since he was found guilty in a U.S. district court in February of conspiracy and violating the Interstate Wire Wager Act. Cohen, one of 21 sports book operators on the receiving end of criminal complaints filed in 1998 by U.S. Attorney Mary Jo White, was sentenced in August to 21 months in prison and fined $5000. He's currently awaiting an appeal.

In the same district, Island Casino and Sportsbook's Allan Ross, another one of the 21 operators, has had his sentencing, scheduled for today, postponed indefinitely. Ross pled guilty earlier this year to felony charges.

On the E-commerce Front -- Wells Fargo Bank, as reported in November, is taking steps to prevent its Visa and Master Card account holders from using its check cashing and credit cards for Internet gambling. Kevin Ferguson, reporting for the Las Vegas Review-Journal, writes that card holders were notified on their December statements that ATM and credit cards could not be used for "funding any account that is set up to facilitate online gambling." Wells Fargo said it was following instructions from Visa International requiring its 14,000 member banks to inform card holders that Visa cards could not be used "for illegal purposes." Sebastian Sinclair, an Internet gambling analyst for Christiansen Capital Advisors in New York, said that some 95 percent of 4 million Internet gamblers worldwide made their e-wagers with credit cards last year. Sinclair said many other banks would not join the trend because Internet betting is not illegal in other jurisdictions.

Tidbits from the UK -- Wembley PLC announced this week that 24dogs.com, the company's greyhound racing and information betting site which went live two weeks ago, had over 200,000 page impressions and over 1 million hits in its first week. The company said its 24dogs.com subsidiary has signed agreements with racing tracks at Poole, Milton Keynes and Swindon. On Monday, BS Group PLC announced an agreement with 24dogs.com to provide exclusive live video and audio greyhound racing from the three stadiums.

After several delays and a major controversy, Great Britain's National Lottery Commission announced this week that the winner of the National Lottery's next seven-year contract will be announced before Christmas. Earlier this year, one of the bidders, Camelot, was disqualified from the running because of a major glitch discovered in the technology system of GTECH, Camelot's technology partner. Camelot's ousting was ruled unlawful by the British High Court and led to the replacement of the Commission's chairman. Camelot is the current lottery operator. The second bidder in the running is Sir Richard Branson's The People's Lottery.

Meanwhile in the 11th hour, Camelot has pointed out that The People's Lottery's 53-ball format has failed recently in the U.S. Florida adopted the format in November 1999, and participation has declined since the change was made. The same occurred with California in the 1980s. "Based on our own calculations, it is clear that some of the claims made by TPL are questionable," a spokesman for Camelot said.

A committee of MPs on Tuesday announced that it is nearing a conclusion to its investigation of betting activities by newly elected Commons Speaker Michael Martin, who admitted that he wagered on the outcome of his election. The parliamentary commissioner for standards, Elizabeth Filkin, has completed her inquiry and presented her report to MPs.

Tidbits from Down Under -- Amid what is sure to be a full-scale emigration coming out of Australia, game testing firm GGS-AU has signed an exclusive agreement with the South African Bureau of Standards (SABS) to form GGS-SA (Pty) Limited, a South African company. GGS-SA will provide testing and consulting services to the gambling industry in Southern Africa and service other markets through the global GGS group. Intellectual property possessed by GGS-AU will be transferred into South Africa.

Australian online casino operators met in Sydney yesterday to discuss jointly developed uniform Australian standards for online gambling. The standards have been developed and circulated to all Australian and New Zealand gaming ministers. Because of the delicate state of the industry Down Under, the results of the meeting have been so far held under wraps.

New Stuff -- U.K. broadcasting group BSkyB has launched its Sky Text and TV betting services. Sky Text offers users around 1,200 pages of text, graphics and color images through its remote control, including sports, entertainment and leisure information. Sky digital viewers will have access to the new services. Sky Text will also offer online links through the Sky digibox, for a local call charge, initially to sky.com and its interactive TV service, Open. Users will be able to wager on sports through a service developed by Surrey Sports, which BSkyB purchased as part of its acquisition of the Sports Internet Group earlier this year.

Names and Faces Changing Places -- The board of directors of gambling software developer CryptoLogic Inc. announced Tuesday the appointment of Jean Noelting as the company's new president and CEO, effective January 8, 2001. Andrew Rivkin and Mark Rivkin, the founders of the company, will step aside as CEO and COO respectively. The Rivkins will continue to contribute to the long-term growth of the company as active directors. "I am delighted to pass the reigns to such a highly qualified leader to take CryptoLogic into its next growth years," said Andrew Rivkin. "CryptoLogic has enjoyed exceptional success and is ideally positioned to continue to be the premier software provider supplying the world's leading gaming and brand name organizations. Now, we need experienced leadership to take our company to the next level, and Jean brings a great combination of entrepreneurial drive, proven track record and large organization experience to advance that goal."

A few changes have been announced at Magna Entertainment Corp. Along with consolidating its operational activities in Toronto, President and CEO Mark Feldman has stepped down, although he retains his seat on Magna's board of directors and will act as an advisor for the company's television, Internet, marketing and other media applications. Chairman Frank Stronach will assume Feldman's responsibilities for the interim period. In addition to its horseracing business, Magna is exploring the development of media sports wagering operations, including telephone account, interactive television and Internet-based wagering.

A Tidbit from the Caribbean -- Caribbean News Agency reports that Wrenford Ferrance, Antigua's director of national drugs and money laundering control policy, has publicly criticized Great Britain for "baseless claims that money laundering is possible through Internet gambling operations operating Antigua and Barbuda." At a meeting of the Caribbean Financial Action Task Force on the International Financial Services Sector, Ferrance explained, "On the basis of no evidence to support the claim, the U.K. now also says that there is a 'possibility' of money laundering through client accounts with Internet Gambling operations, we feel that this new dimension is unfair, especially as it is unsubstantiated." Ferrance strongly opposes Britain's modified version of its advisory issued last year in which Antigua and Barbuda was asked to make the 30 amendments to its laws. He said that Britain "has changed the goal posts from those which it established in April 1999 when the advisory was imposed in the first place."

Makin' Deals -- Hilton Group this week verified that the sale of its 29 casinos to British bingo company Gala Group--a deal that will make Hilton £235 million richer--will soon be made official. "I can confirm that we are in negotiations with Gala concerning the sale of casinos, and hopefully a decision will be announced soon," Hilton spokeswoman Trisha Field told Barbour Expert. She added, "At present there are no plans to sell off any other of our betting interests including high street betting shops and our other e-betting initiatives."

NorAM Gaming & Entertainment Corp., a gaming company that expects to acquire two offshore gaming sites by February 2001, has retained AdvanteXCEL.com Communications Inc. to develop, manage and maintain its Internet operations. NorAM is currently negotiating the purchase of the two sportsbook and casino operations. "AdvanteXCEL is a growing company with impressive operations and facilities that will allow NorAM the ability to build its Internet gaming applications quickly and efficiently," said Julius Csurgo, NorAm CEO. "The company has state-of-the-art software for many of NorAm's requirements including e-mail management, credit processing, Web development, hosting and gaming software development capabilities."

New Stuff -- Wave II, a complete lottery platform, has been added to gaming software developer iCrystal Inc.'s Millennium Edition software to meet the distinctive requirements of potential international licensees. "The completion of our lottery software has now opened the door to a mostly untapped market. We believe that, much like gaming, the lottery market on the Internet is going to explode over the next few years," commented CEO Larry Hrabi. iCrystal's first international lottery site, www.iBuylotto.com, is scheduled to launch soon.

Success Story of the Week -- Microgaming Systems is closing a very successful year with the announcement that its Jackpot Network portal has exceeded a record-breaking $16 million in total jackpot pay-outs. "With over $16 million in jackpot pay-outs in a relatively short period of time, the popularity of the site has exceeded all of our expectations," said Lisa Wycherley, senior VP of operations at Microgaming. To date, 565 winners have shared in the jackpot bonanza, with 55 players earning super jackpots during the month of November.

The Clarification Department -- IGN reported yesterday that Yahoo! Inc., under pressure from the National Football League, has agreed to drop advertisements for online sports betting firms. As reported today by the Wall Street Journal, however, the popular Internet portal has taken the ads off its NFL page, but hasn't omitted them from the entire site. Gambling companies reportedly are willing to pay advertising premiums to gain access to Yahoo's 166 million users.