Nambling Notes - June 9, 2000

Tidbits from the U.S. -- Hearings for both Net betting prohibition bills have been scheduled in the U.S. House. The Commerce Committee's Telecommunications Subcommittee will hold a hearing on HR 3125 (the Internet Gambling Prohibition act) June 15. The House Banking Committee will hold a hearing on HR 4419 (the Internet Gambling Funding Prohibition Act) June 20.

It's quite clear how those in the Net betting business feel about the Funding act, but what does the credit card industry think? According to a recent American Banker story, card companies will stay out of the debate as long as they aren't liable for activity deemed illegal by the bill. "What's most important to us is that our members not be caught up in some sort of liability when they are basically innocent bystanders," said Lamar Smith senior vice president for government relations at Visa.

Prohibition seems to be striking out all over the place, but one of the Goodlatte bill's most back-wrenching whiffs to date came today when the Washington Times, Washington's newspaper of choice among conservatives, took its best shot at the punch-drunk legislation. The article outlined five reasons why Congress should not legislate on Internet gambling, citing that children don't own credit cards, that online gambling is less dangerous to compulsive gambling, that prohibition gambling is not a federal issue, that the bill will hurt state lotteries and that "American people have the right to enjoy their vices on the Internet." Never mind hooking Bob up with a bottle of Pepto to Bob; get that fella an IV.

Lottery News -- Lots of juicy news in last months edition of International Gaming & Wagering Business. For starters, the monthly gaming industry trade publication reported that the Belgian National Lottery is looking into carrying "Treasure Tower," an interactive lottery game developed by Loto-Quebec. The CD-ROM game, which launched in early march in Quebec, is given to players upon purchasing a scratch card. At least some U.S. states are looking at the possibility of offering such games as well. The Iowa Lottery is in the final stages of negotiating a contract regarding Treasure Tower. Meanwhile, the door is being left open in Kentucky, where a bill that would prevent the state lottery from introducing "interactive games" survived the Senate, but was squashed in the House. Moving back to the other side of the pond, Inter Lotto (UK) Ltd. has received the green light from the Gaming Board for Great Britain to begin offering its Pick Three lottery game over the Internet. The online game is due to go live possibly as early this month. The technology used for bringing the game to the Internet will be provided by eLottery, a subsidiary of eLOT, Inc.

New Stuff -- Online Gaming Systems, Ltd., the wheelingist dealingist interactive gaming company of the month, has spun off a new company and made some personnel changes The new company, Cyclone Enterntainment.com, Ltd., will "exploit the unfolding opportunity in the market for interactive gaming portals for TV and other media properties." Online Gaming's cofounder and CEO/President Richard Iamunno will become the chairman and CEO of Cyclone. Peter Lawson, the former COO for Online Gaming, will succeed Iammuno as CEO and president of Online Gaming. Lawson had earlier been appointed CFO of OGAM, and Managing Director of Online Gaming Systems Australia Pty Ltd. Get all that?

Fairplay African Casino announced that it's giving its players "the chance to decrease the hassle and time waiting for their well-deserved winnings" by accepting transactions through the infinia debit card. Customers can purchase as they normally would using their credit cards, but they now have the option of having their winnings paid directly into their infinia cards. Fairplay says that winnings would be accessible within 48 hours from any Cirrus ATM or Maestro merchant worldwide.

Football pools company Zetters Group is launching a co-branded Euro 2000 betting site with 365 Corporation. The site, available at www.eurozetters.com and www.win365.co.uk, will initially offer three games. Zetters business development manager Graham Doyle said the site was a test of the market before offer a full service site later this summer. "This is the first stage of our plans. Our service will be significant. We are going to change the way people play the pools in this country," he said.

Ebeon, a Dublin-based company, has joined the wireless betting craze by introducing a service that enables customers to place bets through their mobile phones. The service should be up and running in time for the Euro 2000 soccer championships which kicks off tomorrow. The service will be provided by William Hill. Ebeon says more gaming applications are on the way.

Stanley Leisure announced this week that its new sports betting site will begin taking bets in August. While punters are waiting, they can check out the new site, Stanleybet.co.uk, and register to win a two-week holiday for two to Australia. The betting site will be licensed in Malta.

Littlewoods Leisure may be the next U.K. Net betting company to head offshore to escape the onerous nine percent betting duty charged on every bet. The company has been eating the charge since launching its betting site in March. "It is very difficult at the tax rate that is here to make it a profitable business," Peter Cuffe, Littlewoods Leisure Internet services director told Reuters. Cuffe said that the company is looking at various locations with plans to set up shop offshore in the foreseeable future.

One of Ireland's largest bookmakers, Paddy Power, has invaded Britain with a media blitz recruiting British punters to its e-betting site. PaddyPower.com is located outside Britain, enabling the bookmaker to offer tax free betting for U.K. punters. British betting sites, by comparison, are required to charge a nine percent betting duty on every wager. British punters will also be able to bet on National Lottery numbers at PaddyPower.com, something they can't do with British bookmakers. Additionally, punters will soon be able to bet with PaddyPower via interactive TV and WAP services. The company will also announce the receiving of an offshore license within the next month.

Windnsea Gaming Services, a full-service Internet gaming management company that specializes in administrating the general affairs of offshore gaming companies, has announced the launching of CasinoSilk, a full service, Java-based gaming site. The new casino, built by Chartwell Technology Inc., is the third interactive casino launched this year by Windsea.

New Directions -- Winners Internet Network Inc., a provider of e-commerce solutions for online gaming services, is shifting gears to cover a much wider array of services and has outlined its strategy at its newly website at www.winr.net. "With the launch of this new site, we have effectively completed the transition from a strictly gaming-related processing operation to a broad-spectrum e-business financial processing company," President and CEO David Skinner said. "The new site details the various aspects of our business model, gives an overview of the history and progress of the company and provides descriptions of our strategic partners as we go forward." In conjunction with the new site, the company announced the signing of an e-commerce processing contract for the use of Safe4Win, an alternative safety shell designed by Techorg Establishment for MS Windows^TM 95/98/NT offering a high level of additional security for standalone and network applications. The product allows restriction of access on a per-user and/or time period basis to selected application and OS functions. It is useful in protecting systems and networks from the potential blunders of inexperienced users and runs concurrently and compatibly with Windows and Explorer.

E-Vegas.com Inc. this week announced that Rafael DeNoyo has joined the management of the company as director and vice president. DeNoyo is the author of the Company's Stealth 001 software suite and has numerous years of experience in the software development industry. The company's new business model envisions licensing its Stealth 001 based customized turnkey, up-and-running-in-one-hour gaming solution to online casino, lottery and sportsbook operators. The company says it's in the process of negotiating "master distributor" licensing agreements in Latin America, Europe, the Middle East and Asian.

Success Story of the Week -- Casino on Net is truly an elite heavyweight among online casinos, and its success is due largely to successful advertising. The site once again cracked the Nielsen//NetRatings top ten at-home advertisers list this week, logging 69,975 impressions between May 29 and June 4.

Quote Worthy -- "Right now, the industry has been supportive, by and large, of an Internet gambling ban, but every indication is that in another year, segments of the industry will break ranks and jump into the market with both feet. I think that would be terrible public policy. ... One analogy is the number of operators who were staunchly opposed to Indian gaming, and now many of those same casinos are in business with the tribes."

Sen. Richard Bryan, D.-Nev., as quoted in Las Vegas Review-Journal.