Nambling Notes - May 26, 2000

Tidbits from the U.S. -- Several sources have reported that the HR 3125, the House version of the Internet Gambling Prohibition Act will soon be referred to the House Commerce Committee. Congress Daily reports, "Commerce Committee Oversight and Investigations Subcommittee Chairman Fred Upton, R-Mich., said in coming weeks they would be introducing legislation to give state attorneys general the right to seek nationwide injunctions against illegal Internet sites, much as they have been able to do with telemarketers."

Arizona Senator Jon Kyl, daddy of the Senate's version of the bill, this week introduced another piece of cyber crime legislation--one that could ultimately morph victims of hacking into vigilante The bill, also sponsored by Dianne Feinstein (D-Calif.), would boost the maximum jail term for hackers from five years to 10 years. Here's the kicker: It will additionally include language giving federal law agencies the power of "administrative subpoena" to pursue hackers without first getting warrants. It could also offer limited protections that would permit companies to share information about hacker attacks without fear of compromising the integrity of the data. Considering the short amount of time for research between the recent Love Bug fiasco and the surfacing of this bill, detractors of Kyl might just categorize the measure as knee-jerk legislation.

Tidbits from Bedlam -- The Australian interactive gaming license brouhaha has led the Northern Territory government to threaten legal action. "If the Commonwealth persists with this approach regarding an interactive gaming moratorium, we will challenge their actions even if it means taking the issue to the High Court," NT Chief Minister Denis Burke said. Such a challenge would focus on protecting the current license applicants and existing interactive operators, he added. Burke proposes a "Strategy for cooperation between the commonwealth and states" to immediately minimize harm, including a ban on access to overseas online casino gaming sites that don't match Australian player protection standard. "These sites are largely unregulated by any jurisdiction, exposing Australians to risk of being defrauded by site operators, Burke said. He also recommends the adoption of national regulation standards to govern all forms of interactive gaming.

Meanwhile. The federal government issued a press release Thursday to clarify issues related to its proposed interactive gaming license moratorium, and when it becomes effective. The moratorium will apply to the introduction of new interactive gambling services effective May 19, instead of whether the license was issued by that date, the government said. A number of licenses, however, were hurriedly issued before May 19 in order to beat the deadline. Despite the feds' pronouncement otherwise, most state and territorial governments have indicated that they don't believe the Commonwealth has the authority to enforce a moratorium.

Speaking of new licenses Down Under, Tabcorp Holdings Ltd., recently awarded an Internet gambling license by the government of Tasmania, revealed this week that it will launch its online sports service sometime in June.

The Internet Industry Association has announced its opposition to the moratorium, citing that it would cost Australians millions of dollars, drive potential Internet companies offshore and lead to a loss in employment and a fall in state and territory taxation revenue.

Makin' Deals -- Ladbrokes, Hilton Group Plc's betting division, has inked a deal to develop exclusive e-betting services with FutureTV via broadband, cable and ADSL. Under this deal, the two companies will develop an eCash payment system using a Mondex smart card currently under development by FutureTV. Additionally, Hilton is looking at providing online betting services in hotel rooms in Europe and around the world.

What a busy, busy week for Online Gaming Systems Ltd. (OGS) The company announced Tuesday that it has signed a letter of intent with ETI Gaming to jointly market "the most advanced and the most complete lottery solution integrating online lottery, point of sales, video lottery, management and Internet applications to the worldwide lottery industry." ETI's Lottery & Gaming Division provides complete lottery solutions, including central lottery systems and lottery terminals, to lottery organizations worldwide. ETI President Chérif Benchalal announced that ETI has successfully completed and installed its new Microsoft NT Cluster Enterprise-based lottery central system in Haiti. Microsoft NT allows ETI to take advantage of lower implementation cost, high availability of NT's trained staff and faster lottery game development and implementation, which ultimately, OGS says, results in lower cost of ownership. The migration creates a common environment between the ETI central lottery solution and the OGS Internet solution, which is Microsoft NT based as well.

On Thursday, OGS announced that is has signed a contract to develop a promotional free-play gaming site for Burswood Casino in Perth, Western Australia. The site, expected to launch by June of 2000, will utilize Online Gaming's ICE virtual casino software. "Although the site will not feature live cash gaming," OGS Australia CEO David Kinsman said, "it provides amusement and creates a vehicle through which Burswood can communicate with and learn about new and existing players." Burswood Marketing Manager Sue Quinnadded, "The implementation of this site will assist in establishing the Burswood brand globally and provide us with significant opportunities to develop our web presence across new markets."

Virtual Gaming Enterprises, Inc. has added via acquisition five new sites to its fleet of online casinos: The Flaming Dragon, Porky's, The Good Fortune, The Lucky Leprechaun and The Swinging 70's casinos. Virgil Williams, president and CEO, said the purchase "continues the company's aggressive expansion program aimed at further enhancing its industry position and increasing VGAM's market share." The company now operates 18 unique casino sites as well as a sportsbook at www.vegasbook.com.

A Tidbit from Antigua -- International Enforcement Law Reporter reports that the Government of Antigua and Barbuda has signed an anti-money laundering agreement with the United Nations that requires it to implement various standards to prevent and combat money laundering and fraud. Antigua has in turn asked the U.K. and U.S. governments to lift their warnings against using Antiguan offshore banks. The warnings, issued in April 1999, were in response to recent changes made to Antigua's Money Laundering (Prevention) Act of 1996 that the U.S. Treasury Department said "significantly weaken (Antigua's) anti-money laundering laws and supervision of its offshore banks."

New Stuff -- Financial betting specialist Exbet.com has launched an affiliate program that provides financial and gaming websites with the opportunity to offer financial betting using the company's patent-pending technology. The program targets offshore betting and gaming sites worldwide, as well as financial spread-betting sites. Participating betting services can thus add an "Exbet betting console" to their sites where customers can price and purchase fixed-odds financial bets. Each member earns a commission on every bet placed within its customized betting console. The company also announced that "affiliate betting consoles constitute an embodiment of the patent application filed by Exbet.com Ltd. with the European Patent Office on 28th March 2000 and with the U.K. Patent Office on 27th April 2000." The patent application describes what is in effect a "financial betting machine" linked to real-time financial markets data feeds, electronic payment systems, and user betting consoles.

New Faces -- Go Call Inc., a processor of transactions for online gaming, this week announced that appointment of James W. Palmer as President and CEO. Palmer, previously with IBM for 20 years, will replace Irving Moon, who will continue in the position of President/CEO of Indexus (www.indexus.com).

Edwin J. McGuinn has succeeded Stanley J. Kabala as eLot president and CEO. Kabala remains company chairman. In addition, Philip D. Gunn has stepped down as Interim CEO of Lottery, Inc., a subsidiary of eLOT, but will remain on eLOT's board of directors.

Marketing Stuff -- Alistair Assheton, managing director for Curacao-based VIPSoccer.com will be speaking before the Marketing To Women Online Conference 20th - 22nd June 2000 in London. His speech will focus on the challenge of expanding the typically male orientated pursuit of gambling into the female market, and how VIPsoccer.com is attempting to entice women with the content and design of its site. "Female accounts have risen in double digit percentages monthly since our launch in February. We have hundreds of regular female customers now playing at VIP, and their custom will be key to the continued growth of VIPsoccer.com", Assheton commented. "We are confidently predicting that during the Euro 2000 Championships, 1 in 5 of our customers will be female and we aim to continue to attract more women in the next global football season."

Promotional Stuff -- The Internet's self-proclaimed "most vibrant gaming site," www.planetluck.com, recently launched its "Win A BMW" concept in which players are eligible to win either a new BMW Z3 Roadster, worth $32,000 or one of ten cash prizes worth $10,000 each.

Lousy Ad Campaign of the Week -- ICQ spam has become quite handy tool for website operators who are too cheap or unsuccessful to put together a legitimate advertising campaign. Naturally, the Net betting industry is not without its abusers. The latest to cross the desktops at the River City Group suggested that we go to www.bigplayers.com, Specifically, my new friend wrote: "Hey buddy I just won $4000 in this online casino, I am so happy :-))," along with the URL: http://www.bigplayers.com/w/in.php3?c=winbig. If you are among those in the industry who are adamantly against spam, or even among those who pretend to be adamantly against spam, you can add the perpetrators of this message to your list of offenders.