Nambling Notes - Mar. 10, 2000

Tidbits from the U.S. -- On February 28, the Michigan Department of Community Health launched a $2 million (not including production costs) public service ad campaign aimed at warning Michigan residents about the dangers of problem gaming. The initial group of ads consists of six television commercials; four of them specifically focus on Internet gambling. The entire campaign is scheduled to run over the course of the next several months. IGN will be following up with details in coming days.

As long as we're on the subject of Michigan--a state that's quickly becoming a hotbed for prohibitory sentiment--Act 235, a law prohibiting the use of the Internet for gambling, went into effect today. Will we see any judicial action under this law anytime soon? Don't hold your breath.

And speaking of new laws, South Dakota Governor William Janklow, as expected, this week put his signature on House Bill 1110, an act to prohibit Internet gambling in that state.

The Minnesota Department of Public Safety is urging U.S. Congress to enable states to retain the authority to regulate Internet gambling. Norman Pint, the director of gambling and alcohol enforcement of the Minnesota Department of Public Safety, explained, "Historically, this has been a state's right to govern these issues within their borders. It's a state sovereignty issue."

Whether or not Ohio will soon sell lottery tickets over the Internet is still up in the air. The Lottery Profit Review Commission, which held it's last meeting yesterday, has made several recommendations for how the state can boost lottery sales, but stopped short of actually recommending Internet sales. Such a recommendation would be controversial, and needs a clearer legal standing, according to state Rep. Donald Mottley, the commission chairman. Instead, the Commission will make suggestions on how Internet lottery sales should be done if the state decides on that option. Commissioners can, however, submit individual recommendations. The Commission's full report is due March 16. Committee members have until March 20 to submit individual recommendations.

The lawsuit between a California man and two credit card companies--American Express and Discover --has been removed from state court, at the request of the credit card companies, and placed in the federal court for the northern district of California. Plaintiff Fred Marino and his attorney, Ira Rothken, have filed a motion to have the case remanded to state court. A hearing on March 28 will determine which court will be the final destination. Rothken says his client and he are "very confident that we'll prevail."

The legality of online gambling in the U.S., needless to say, has been a huge issue in the past month. Prohibition--on both a state and federal level--has taken center stage, and website operators have been asking what they can do to help encourage their visitors to make some noise. The "Log On 4 Choice" is the easy answer. Simply post the logo on your site and link it to the Internet Consumer Choice Coalition page, where Web users can send letters directly to Congress.

This Week in Cyber Crime -- According to a story in The Register, a Sicilian couple recently won £270,000 while betting on an online lottery using stolen credit cards. Guiseppe Rossi, 34, and Sandra Elazar, 33, allegedly spent £500,000 on a gambling spree and laundered the winnings through several bank accounts. Additionally, they purchased clothes, watches and thousands of books. The couple allegedly obtained credit card numbers by hacking into computers. Most of the credit cards were issued by Chase Manhattan and Citibank Universal MC Card.

Voila News reports that a Taiwan prosecutor has put the freeze on an illegal Internet gambling ring in which bets were taken on Taiwan's March 18 presidential elections. Taichung District Court Prosecutor Liu Kuo-pin says 100 people wagered up to US $1,000 each by credit card on the "Happy President" gambling ring through the Internet. The investigation was sprung when Liu received an e-mail about the game asking for a minimum wager of $20. All forms of gambling are illegal in Taiwan.

A Tidbit from the Caribbean -- The Directorate of Offshore Gaming in Antigua and Barbuda announced this week that Cabinet of Government of Antigua and Barbuda, on February 16, 2000, abolished the 10 percent import duty on goods required in the operation of Internet gaming entities licensed in the jurisdiction. The abolition, along with the abolition of the 20 percent government tax on international calls for Internet gaming companies in 1999, will substantially reduce the operating costs of offshore gaming licensees. Additionally, Cable and Wireless has announced rate reduction for bulk users due in mid-March.

A Tidbit from the U.K. -- British retail and leisure company Littlewoods may be taking its telephone betting and pools to the Internet, according to Reuters news service. An announcement is expected Monday, and is likely to feature alliances with telecoms, Internet and media players. U.K. betting firms Sports Internet Group Plc, Arena Leisure Plc and Hilton Group Plc have recently announced similar deals. The Financial Times, meanwhile, suggests that Littlewoods leisure section, which accounts for less than 15 percent of the company's turnover, may eventually be spun off as quoted company.

A Tidbit from the Asia -- The Hong Kong Jockey Club is considering offering extranet betting services to its 800,000 Telebet account holders. If all goes well, the HKJC will begin extranet betting during the 2000/2001 season. Services will be open only to account holders over age 18.

New Faces -- Gaming software provider Online Gaming Systems Ltd. has announced the appointment of Mark Machet as vice president of new business development. Machet will become part of the company's executive management team and will be responsible for identifying and implementing global strategies and business opportunities for the company. Prior to coming to Online Gaming Systems, he worked at International Gaming Networks, a division of MIH Ltd., developing new businesses in the gaming and electronic media fields.

eLOT, Inc. has named Robert Daum vice president of development and finance. Daum was previously a managing director at Warburg Dillon Read. eLOT additionally named Richard Fernandes to its board of directors. Fernandes is CEO of webloyalty.com.

Makin' Deals -- Two Antigua international business corporations, Mardi Gras Holding Group, Inc. and Earth Star 1 Ltd. have entered into an agreement in which Mardi Gras will provide assistance to Earth Star 1 in the development of a $200 million luxury casino resort in Dickinson Bay, Antigua. The project is expected to gross more than $20 million in its first year. Preliminary plans may be viewed at www.earthstar1.com.

Winners Internet Network, Inc. (WINR, a provider of e-commerce solutions for online gaming sites, announced this week the signing of a deal with the Corporacion Centroamerica El Tesoro Sociedad Anonima (CCETSA) in which WINR will handle the financial transaction processing for CCETSA's Costa Rica-based Internet and telephone sports betting service, Casablanca Sportsbook & Casino. Transnet Services Ltd., a wholly owned subsidiary of gaming software distributor Xirtrix Gaming Technologies Inc., this week announced the signing of a licensing agreement with Tiger's Eye International. The result will be online casinos at www.tigerseyecasino.com and www.goldbeachcasino.com. The new casinos, licensed in the Dominican Republic, have already gone live with real-money wagering.

Promotional Stuff -- March Madness is finally upon us, and that means attractive promotions at online sportsbook are plentiful. The fattest prize out there could be Intertops' $2 million grand prize for anyone who can correctly pick the winners of every game.

In the free-prize neighborhood, Sportsbetting.com is giving customers the chance to win US $50,000 in it's free "Net Madness" contest. Anyone who chooses 60 out of the 63 winners for the NCAA tournament bags the 50 grand. Consolation prizes of $5,000 will be given out as well.

New Stuff -- Loto-Quebec subsidiary Ingenio has announced the release of an instant CD-ROM lottery game with which players can redeem free tickets and cash prizes up to $25,000. To play the game, "Tresors de la Tour," consumers must purchase a starter kit that includes three instant lottery tickets. The game also includes a parental control device. Loto-Quebec has already licensed the product to lotteries in Switzerland and Belgium. The company says the European lotteries should bring in more than $21 million, resulting in nearly $1 million in net profits for Ingenio.

Poker.com, Inc. recently announced the launching of two online casinos at www.highstakescasino.com and www.noblehousecasino.com. Each of the licensees have been supplied with a fully operational Java-based Internet casino equipped with nineteen games. Poker.com will earn monthly royalty fees from the licensees.

Quote Worthy -- "This is likely a good time to provide my view on gambling in general--I think that it is, frankly, a tax on those who can't do math. That is not my original quote but to tell you the truth I don't recall who said it first.

-Bartlett Cleland, Director of the Center for Technology Freedom, while testifying before the U.S. House of Representatives about Internet gambling prohibition.