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Emily D. Swoboda
 

Nambling Notes - Jun 16, 2000

16 June 2000

Tidbits from the U.S. -- If yesterday's House hearing on Rep. Bob Goodlatte's Internet Gambling Prohibition Act is any indication of how next week's hearing on the bill's little brother, the Internet Gambling Funding Prohibition Act, will go, you won't want to miss the action. The likelihood of prohibition appears to be diminishing as skepticism regarding the act seems to have risen to an all-time high since it was shifted to the Commerce Committee. Unless some magical deals are stricken, which is easily conceivable, the future for the Goodlatte bill isn't looking so good. Little brother, HR 4419, is scheduled to go under the spotlight on June 23.

The sponsors of a federal bill that would prohibit gambling on college sports have motioned to have the bill attached to a Department of Defense bill. The Las Vegas Sun reported, "That may seem an odd vehicle for gambling legislation. But Senate Majority Leader Trent Lott, R-Mississippi, who controls much of the action on the Senate floor, this week allowed 'non-germane' amendments to be added to the defense reauthorization bill, which approves spending on military programs."

Makin' Deals -- German software developer Q-Seven Systems Inc. this week announced that it has further developed the generic interface for its User-Management System and has signed a preliminary agreement with Omni Software Systems Inc. on May 24, 2000. Omni Software will utilize the Q-7 User-Management System as the back-office system in connection with the development of wagering and non-wagering Internet gaming systems. The generic interface enables customers of the Q-Seven System to develop their own casino games, lotteries and entertainment applications as well as other online services. Omni Software is an affiliate of I Gaming Solutions Inc., a two-year veteran in the Internet gaming industry. The company is under agreement to develop turnkey systems this summer which include a multi-player poker system that enables people from around the globe to play a variety of poker games in real time with other real players and a virtual casino system utilizing Shockwave technology. The system and games were recently previewed and very well received at the Global Interactive Gaming Summit & Expo, Montreal.

Transnet Services Ltd., a wholly owned subsidiary of Xirtrix Gaming Technologies Inc., announced last week the signing of gaming software licensing agreements with Worldwide Internet Services Ltd. and Blue Diamond Ltd. Transnet will develop www.MegaWinCasino.com for Worldwide Internet Services and www.BlueDiamondCasino.com for Blue Diamond. Both casinos are scheduled to be launched this month for real money wagers. The casinos will offer casino games utilizing Java technology and will operate under a license from the Dominican Republic.

International Thunderbird Gaming Corporation, an owner and manager of international gaming facilities, announced this week that its wholly-owned online gaming division, Fiestacasinos.com N.V., has signed its first media supplier, a Mexican communications company called MVS Comunicaciones. Under the terms of the five-year advertising sales agreement, MVS Comunicaciones will advertise Fiestacasinos.com on its television and radio stations, cable network and Internet sites to build the Mexican online customer base. The deal calls for MVS to place US$1 million dollars of marketing and promotional efforts in the first year. For the second and subsequent years of the agreement, MVS will place the amount placed in the previous year, increased by the rate of inflation observed in the U.S. during the previous year plus the amount by which the fees paid to MVS exceeded the value of advertising and promotional efforts for the previous year. In return, Fiestacasinos.com will pay MVS a fee of 31.25 percent of the net sales revenue traceable to MVS advertising and promotion efforts in the Mexican market in Mexico.

A New Face -- firststake.com, the new U.K. online betting service by Firststake Plc, has announced the signing of partnership with legendary soccer manager and match commentator Ron Atkinson. "Big Ron" will feature firststake.com's launch advertising campaign to coincide with the launch of the service at the Euro 2000 tournament. He will also host the site's soccer section, offering firststake's customers up to the minute news, gossip and expert analysis on the performance of teams and players throughout Euro 2000 as well as his personal comments during the whole of next season's Champion's League competition and the English Premiership.

Promotional Stuff -- A recent promotion on William Hill's betting site backfired when the bookmaker offered new clients a £50 cash-back on a £100 wager. According to the Sun, swift-witted punters bet £100 on one player in the recent French Open tennis match and put the £50 bonus on the competitor. Odds were greater than even for the event, so punters pocketed at least £40 on their bets. The bookmaker soon realized what was happening, and made some quick changes to eradicate the problem. New players can now get a 10 percent cash bonus and a free mobile phone.

New Stuff -- The Kahnawake Mohawks have launched from their high-tech Internet/e-commerce business campus a new Internet service that offers Canadians offshore investments directed through the Cayman Islands, an offshore tax haven. The site is operated by the Mohawks' online brokerage firm, TradingOffshore.com, a company that Michael Tobin, managing director of Mohawk Internet Technologies, predicts will be "profitable from the very beginning." The London Free Press reports, however, that the Quebec Securities Commission is looking into whether the company, which isn't registered with the commission, is breaking the law. "If we feel that we must protect investors, we have the power to stop their activities," commission spokesperson Denis Dube said. TradingOffshore.com is reportedly licensed in the Bahamas.

eLOT, Inc. announced that it has entered into a long-term strategic partnership agreement with PlasmaNet, Inc., a leading online database marketing company providing targeted advertising and marketing services. PlasmaNet owns and operates FreeLotto.com, the twentieth most popular site on the Internet according to PC Data Online. eLOT will acquire FreeLotto.com's lottery results web site located at www.LottoNet.com which will be held in a newly formed subsidiary. The agreement also calls for eLOT to obtain branded links on the www.FreeLotto.com home page, which will seamlessly connect to the LottoNet.com site and the eLOT's lottery portal at www.eLotteryFreeWay.com. Additionally, eLOT will have the exclusive right to market products and services related to the pay-to-play lottery business to FreeLotto.com's user base. Under terms of the agreement, eLOT has issued 1.6 million common shares to PlasmaNet as consideration for the site and as payment for the first tranche of registered customer referrals. The agreement calls for additional consideration contingent upon success in reaching specified registered customer referral milestones.

uk.internet.com reports that Victor Chandler, one of Britains big three bookmakers, is planning an Internet venture aimed at poker players. A new site, pokerschool.com will be set up on a pool-betting basis where a pot of prize money would be shared among winners according to their final ratings in a league table. Punters will be able to bet on virtual card games as well flutter on corporate share prices. The venture will be a partnership between Chandler and stock market database Money Guru.

Tales of Success -- The popularity of Microgaming Systems' CashSplash progressive slot system continues to grow uncontrollably. The company reported this week that pay-outs for the game have increased in the last 12 months by an impressive 873 percent. CashSplash, now linked to over 40 Internet casinos, paid out $75,203 to a total of six jackpot winners in April 1999. In April 2000, 25 winners shared a jackpot pool of over $730,000. In May, 35 winners shared a jackpot pool of $1,188,259. To mark the occasion, Microgaming paid a $10,000 bonus to the winner who took the jackpot total through the $1 million mark. Since its launch, CashSplash has paid out over $5 million in jackpot prizes, making it the world's most lucrative online progressive jackpot.

Macua casino tycoon Stanley Ho's soccer gambling pool could potentially reach $1 billion during Euro 2000, according to information published in The South China Morning Post. SLOT, a lottery franchise monopoly associated with Ho's casino monopoly syndicate STDM reportedly earns 90 percent of its turnover from telephone and Internet bets made outside of Macua, mainly by Hong Kong punters.

Casino On Net continues to be the online gaming industry's top producer in terms of generating traffic through advertising. The site was among Nielsen//NetRatings' top 25 at-home advertisers for the month of May 2000. Coming in at No. 18, one ahead of AltaVista the site logged 230,966 impressions and achieved a reach of 20.4 percent.

A Tidbit from Down Under -- The Northern Territory Government in Australia has reportedly expressed its willingness to sell its Totalizator Agency Board to Tab Queensland Ltd. for A$8 million. Tab Queensland, the winning bidder for TAB, will take over the business July 1.

What Others Are Saying -- John Perry Barlow, the co-founder of the Electronic Freedom Foundation, recently unleashed a world of hurt on those in the government who advocate prohibition and support the Internet Gambling Prohibition Act. In an article published in the San Francisco Chronicle, Barlow writes, "However high-minded it may sound, this legislation is unconstitutional, impractical, unenforceable, and even, I would submit, immoral. Not only does it infringe on the rights of individuals, both American and foreign, it grossly advances federal authority over the states. That is, it would prevent states from using the Internet for state-run lottery games, an important source of revenue for a number of programs, including education."

Quote Worthy -- "If we don't do it this year, I question whether we will have another opportunity to do it."

--Sen. Jon Kyl, R-Ariz., as quoted by National Journal's Congress Daily, on the likelihood of U.S. Congress being able to pass an Internet gambling prohibition law.

Emily D. Swoboda
Emily D. Swoboda