Nambling Notes - Jun 30, 2000

In the House -- The Internet Gambling Prohibition Act, HR 3125, has been released by the House Commerce Committee. The next step is for the bill to be brought to the House floor for a general vote, although a whole lot of negotiating stands in the way. While a significant block of House conservatives are insisting that the carve-outs be eliminated, the Democrats are seeking a successful way to deal with the possibility of a veto.

In the Courts -- PlayStar Corp., in response to a lawsuit brought against the company by Cyberstation Limited, Joseph Alves and Alicia Da Conceicao for breach of contract, has counter-sued the group for $50 million. Glynn Grummett, president of PlayStar Casino Limited, said that the lawsuit arose from a management contract signed between Cyberstation and PlayStar that went sour. Grummett wouldn't comment on details.

New Stuff -- FiestaCasinos.com, the Internet casino operated by International Thunderbird Gaming Corporation (ITGC) and driven by CryptoLogic Inc.'s software, made its debut this week. The launch makes ITGC the first publicly-traded North American company to offer both land-based and online casinos. The new site targets Spanish and Portuguese speaking players from around the world with the exclusion of the United States.

The master of fried chicken may be out of the Net betting biz, but a man whom they named a candy bar after has come along to fill the void. Signing baseball legend Reggie Jackson has proven to be a boon for WorldNet Casinos. Jackson has partnered with the company to launch a virtual casino--www.reggiejacksoncasino.com--that bears his name and offers blackjack, baccarat, bingo, deuces wild and jacks or better poker, Pai Gow, roulette, slots, and super 6. The e-casino began accepting wagers about a month ago. WorldNet Marketing director Jacqueline Perez says to keep an eye for similar deals in the offing, although she wouldn't disclose any names.

Starnet Communications International this week announced a new affiliate program designed to increase marketing and revenue. The company hopes to effectively employ the program to make its products even more visible to the web-surfing public. Affiliates are paid a portion of the profits from the customers they refer to licensees. A banner appears on the website of the affiliate that advertises the site of the licensee and leads customers to play. The is program will facilitate marketing of Starnet products at a negligible price to the corporation itself.

Makin' Deals -- Go Call Inc. in San Jose, Costa Rica this week announced plans for a partnership of sorts with a private investment group in Bermuda. Go Call plans to set up a $1 million-per-week Megalotto website that will be funded and insured by the unnamed Bermuda group. Profits will be split 50/50. Despite specuation that the immense revenue projected for the website might be compromised by intense competition or difficulties in marketing, but Go Call nonetheless has high hopes for the venture.

Tidbits from Here and There -- Winning the U.K. National Lottery bid requires nerves of steel and remarkable patience. The National Lottery Commission, which was supposed to name the winning bid last week, has instead put off making any decision until late August. Chair Helena Shovelton explained, "It is the commission's overriding responsibility to achieve the best result on behalf of players and the good causes. It has become apparent during the evaluation that both bids have the potential for improvement. The extension is intended to achieve this." The two bidders are Camelot, which currently runs the National Lottery, and Richard Branson's The People's Lottery. The new license is effective from October 2001 for seven years.

While many operators are gleefully rubbing their hands counting potential profits from Internet betting, the Hong Kong Jockey Club reports that high taxes and illegal gambling will eat into any profits its fledgling Net betting service--debuting in September--will make. "It won't be an obvious increase (in turnover) because of the betting tax. We also have to compete with the illegal betting rackets. They don't have to pay tax and they don't have to give money to charity," club chief executive Lawrence Wong Chi-kwong told the South China Morning Post. "We don't expect a significant increase unless there is an adjustment in the tax rate."

The Organization for Economic Cooperation and Development was due to release its list of uncooperative offshore centers this month, however, Offshore Finance Canada magazine reports that the organization has postponed the release to July 2001. According to Frances Horner, head of the OECD's Tax Competition Unit, offshore centers are being given another year to conform to OECD guidelines.

Where's Totalbet finally going to land? Earlier this year, IGN reported that Totalbet.com, the e-betting joint venture between the Tote and PA Sporting Life Limited, had abandoned plans to relocate to the island of Alderney, where the company had received a license. At the time, Totalbet officials wouldn't say whether the U.K. Treasury had influenced their decision. The latest word, however, is that the online bookmaker has applied for a license in Malta. Behind the possible relocation is the out-of-date British betting laws and hefty general betting duty punters must pay on wagers, according to the Financial Times. "It is not a question of on or off-shore but rather one of how to compete most effectively for the international betting market," Tote Chairman Peter Jones said. "We are a thriving British company, employing 3,000 staff in Britain. That remains unaffected. The Internet side of our operation though requires a particular international outlook and the betting duty currently applied here makes that more difficult." Totalbet.com has been the fastest growing area of the Tote's £500m turnover business since launching in April 1999.

New Faces -- As long we've got Totalbet fresh on our minds, the group this weekend named Lee Richardson managing director. Richardson previously held senior marketing positions with Hertz Europe and the British Horseracing Board and will be key in bringing Totalbet.com to an international market. He spent the last two years heading Tote Direct, the joint venture between the Tote, Ladbroke and Coral that gives bettors access to Tote pools from over 4,700 betting shops. During that time period, its profile, market share and turnover grew considerably, largely as a result of the Scoop6 bet introduced in July 1999.

TELnet GO 2000, Inc. developer of a charity-driven Internet lotto sweepstakes, has named John Randall Steward chief operating officer. With over 30 years experience in the electronics communications industries, Steward has participated in the development of over 360 cable television markets in 42 different states. He is currently developing a professional services company serving the real estate and construction industries with a primary focus on e-commerce. Career highlights include election to Who's Who in Cable Television in 1979 and Who's Who in American Business in 1999. He was one of 13 industry executives asked to sit on the marketing advisory committee to HBO during its formative years.

Success Story of the Week -- Those who populate the vast horde of new and prospective online casino operators looking for a winning strategy might want to take a look at what PlaceMyBet.net is doing. The young online casino was recently ranked by PC Data as the 14th fastest growing website and the 392nd most popular site on the Internet. In case you're curious as to how they pulled it off, the genesis of their plan, though effective and well-implemented, is far from a miraculous aberration: Spend money. Their marketing budget already stands in the neighborhood of a half-million per month and it's on the rise. (Apologies to the unfortunate ones who were lured into believing they could become zillionaires via a $5000 turnkey licensing agreement.)

Our Bad... -- IGN reported a few weeks back that Excelsior Casino in Aruba had become the "self-proclaimed" first land-based casino from the Western Hemisphere to offer Internet gaming. Shortly after running the article, the operators of Tropical Casino, a bricks-and-mortar facility in the Dominican Republic, reminded us that they've been taking bets at www.tropicalcasino.net since November 1999. The site is licensed in Costa Rica, and offers blackjack, video poker, mini-baccarat, roulette, Pai Gow, Buccaneer slots, cyberstud and colada slots. trips.