Nambling Notes - May 5, 2000

Tidbits from North America -- According to an article in Roll Call, House Democrats and a group of GOP lobbyists, including former Ill. Rep. Marty Russo, are in an uproar because the Christian Coalition and Family Research Council have convinced Judiciary Chairman Henry Hyde, Rep. Bill McCollum and Rep. Bob Goodlatte to support an amendment that will remove the lottery carve-out from Goodlatte's Internet gambling prohibition bill. Hyde, whom lobbyists for state rights believed was on their side, maintained that he was never in favor of the exemption, which was originally introduced by Goodlatte. McCollum, likewise, insists he wasn't lobbied.

Meanwhile, as U.S. Congress tries to figure the whole dang thing out, Louisiana recently passed an account wagering bill that paves the way for pari-mutuel betting over the Internet, and New Jersey, through a proposed bill, could be next in line. According to a story in the Boston Globe, Massachusetts could be the next state to jump onboard. A 13-member legislative panel has been assembled to examine ways to revive the state's suffering horse racing industry. Among several ideas thrown on the table, including the legalization of slot machines and changes in state racing taxes, is the possible approval of an account wagering bill, like the ones in Louisiana and New Jersey, that would legalize telephone and Internet wagering on races at Massachusetts horse and dog tracks.

And in case U.S. Congress does happen to figure the whole dang thing out, and the chips happen to fall in the favor of the states on the lottery issue, the state of Ohio could clearly be a frontrunner in the early going. Earlier this year, the Ohio Lottery Profit Review Commission held several meetings to discuss ways of improving sales. Among items on the agenda was the possibility of ticket sales over the Internet. The Commission's report, released in March, didn't draw any conclusions on that possibility, but you might draw a conclusion or two from the Ohio Lottery's marketing strategy. The lottery signed a $6 million renewable contract in April with MYCOM.com of Cincinnati in which MYCOM.com's e-Advertising division, through marketing, will strive to solidify the lottery's Internet presence. Sounds like a head-start, wouldn't ya think?

Legislators in Mexico last week successfully pushed an e-signature bill through the Senate. The new law, which received unanimous approval, gives legal standing to Internet purchase orders. That's great news for the state of e-business in Mexico, as the AP reports that 70 percent of the country's e-commerce is in business-to-business transactions. With that in mind, recent legislative efforts to permit casino gambling in the country, paired with the exciting new outlook for e-commerce, might have made Mexico an intriguing prospect as a haven for Net betting companies. Time ran out on the current session, however, before the proposed gambling and casino reforms bill made it to the table. Don't turn out the lights yet though; deputies might call an extraordinary session in which the new bill could get consideration.

You may recall International Sports Wagering Inc. (ISWI)--creator of the SportXction PC-based, interactive, sports-event wagering system--recently announced the worldwide distribution of its product via the Internet and interactive television. Naturally, such a move doesn't mesh well with the way things work in Nevada, so ISWI has suspended operations at its Las Vegas office as of April 30, 2000. The company stated, "The Las Vegas wagering operation has now become a management and technical distraction, and an impediment in dealings with sports leagues in the US concerning contests, in light of the licensing Agreement. The company said a decision concerning the future of the Las Vegas operation will be made in the near future. The options, all of which have the company ceasing wagering operations in Nevada, include selling the operation, or licensing the rights to the system and software currently used in the operation to one or more Nevada gaming operators. In addition to any revenues that such sale or licensing agreements might produce, the reduction in expense over, $600 thousand per year, will convert to income from the revenue that the company's marketing and distribution agreement Global Interactive Gaming, Inc. provides.

The International Association of Chiefs of Police Advisory Committee for Police Investigative Operations (the "IACPACPIO," if you like) has pulled together a group of law enforcement reps facilitated by the U.S. Secret Service to identify common issues encountered in the searching and seizing electronic storage devices and media. The standards cover procedures for searches and seizures involving personal computers, wireless phones, electronic paging devices, fax machines, Caller ID devices and smart cards. Also included is a primer on how to trace an Internet email. You can check out the guide for yourself at http://www.theiacp.org/pubinfo/pubs/bestpractices.htm.

Stiffer penalties for high-tech crime are being proposed by the U.S. Sentencing Commission. They could become effective November 1 if Congress agrees. Among the guidelines are tougher penalties for credit card theft, which would penalize the thief $500 per credit card - whether or not it was used illegally. The current fine is $100 per card. Additionally tough standards are recommended for the use or copying of stolen software.

New Faces -- Starnet Communications International Inc. has introduced former Ladbroke International vice president John Ford as the company's new vice president and general counsel. The company also introduced Simon Millner, formerly in-house counsel with BC Securities Commission, to the company's in-house counsel team.

Starnet announced Monday that its board of directors has appointed current board member Fred Hazell as chairman. Hazell brings to this position over 25 years of senior level financial management and information technology experience in both the public and private sectors. Former chairman Meldon Ellis will remain a member of the board of directors, as well as Starnet's chief executive officer. The move reflects the company's decision to focus on strengthening Starnet's corporate governance and a desire to remove any potential conflicts of interest between Starnet's management and the company's board of directors.

Global Technologies, Ltd. (GLT), operator of the "The Daily Number" U.K. lottery, this week announced the addition of two key executives, Lord David Young of Graffham and Richard Giordano, to its newly formed GTL Management Limited subsidiary. Young will chair the board of the new venture, and Young, Giordano and GTL Chairman and CEO Irwin L. Gross will comprise the executive committee that manages the venture. Young and Giordano plan to acquire an equity stake in the venture. GTL plans to offer The Daily Number, together with other games, via the Internet later this year. GTL Management is involved in the development of GTL's charity sponsored lottery business in the United Kingdom.

Choice Sports Network, the new self-proclaimed "premier Internet global sports network," has announced that Tony Chamblin, president and CEO of Racing Commissioners International, has been named to its board of directors.

GIC Global Intertainment Corporation, the redundantly redundantly named online casino and sportsbook operator has appointed Michael Louie as regional operations manager. Louie will work to build the company's client base and foster communications between the company and its subsidiaries.

New Stuff -- Enic, the entertainment, sport and media investment group and recent acquirer of U.K. sports betting firm Victor Chandler has revealed plans of creating an international gambling business.

Legal Stuff -- Las Vegas Sporting News (LVSN) reports that prominent British insurer Lloyd's of London is trying to enlist the help of the U.S. Justice Department, the FBI and the U.S. Attorney's Office in forcing Nasa Sportsbook International to shut down its online sports betting service. The two companies have squabbled since Lloyd's charged last year that Nasa was falsely claiming that Lloyd's insured Nasa's customer accounts. Lloyd's recently filed a lawsuit against Nasa and have contacted U.S. officials for their help. "We fully expect the U.S. government, if it hasn't already, to start an investigation of Nasa Sports International," a Lloyd's source told LVSN.

In the same article, LVSN reports that motorcycle daredevil Evel Knievel has become the latest celebrity to attach his name to an online casino. The site is powered by Starnet Software, although Starnet, strangely, hasn't put forth much--if any--of an effort to promote it.

By the way, it looks like LVSN likely won't be LVSN much longer. According to the Las Vegas Sun, the 3rd U.S. Circuit Court of Appeals has ruled that the name "Las Vegas Sporting News" is an trademark infringement because it's too close to the name "Sporting News," which is used by Time Mirror Co.

Makin' Deals -- German online gaming portal fluxx.com has acquired Internet lottery provider lottomaxx.de for an undisclosed sum, European Investor reported. The deal, which went immediately into effect, should give fluxx.com's e-commerce gambling platform jaxx.de a boost. With the acquisition, fluxx can compete with its rival tip24.de in offering online lotto products.

E-VegasGaming.com Inc. last week announced that it has entered into final negotiations with KLW Marketing, GMBH of Islfeld, Bavaria for a "European Master Distribution License" for E-Vegas' Stealth 001 turnkey online casino software. KLW, the third largest independent marketing company in Europe, will distribute Stealth 001 to new and existing online casino operators Europe and the Middle East. The company will commence European marketing initiatives from established offices in Austria, Benelux, Germany, Spain, and the Netherlands. KLW also has extensive Middle Eastern contacts with broad gaming interests.

E-Vegas additionally announced that it has entered into a consulting agreement with professional engineer Sudhir Khanna, P.Eng. to assist E-Vegas in developing "an enhanced global vision" for its gaming entertainment software.

eConnect, a developer of secure e-commerce payment technology, has announced that TELnet Go 2000 Inc. has signed as a Bank Eyes Only^TM merchant to receive ATM card with PIN cash charity donations of $10 from consumers using an eConnect Inc. eCashPad to participate in TELnet's Charity Sweepstakes. For each $10 charity contribution, the TELnet member will receive 40 electronic tickets to participate in the TELnet World Lotto Sweepstakes. The game, based on the popular multi-state Powerball lottery marketing concept in ticket sales, is planned to be available for play on home computers globally through the TELnet website at http://www.telnetgo2000.com.

Applied Gaming Solutions of Canada Inc. (AGS) announced that it has signed an exclusive supplier agreement with the Song Be Lottery Company (SBLC), the representative for the 20 southern lottery companies of Vietnam, in which AGC will supply all of the necessary hardware and software, training, and all other products and services required to enable SBLC to accept purchases of current or future lottery products over the Internet. For the services provided, AGC will receive a technical consulting fee for the duration of the contract period, which is anticipated to be not less than ten years with a five-year renewal option. The technical consulting fee that AGC will receive is subject to final negotiations with the SBLC. AGC also said that it has been in ongoing discussions with several world-renowned Internet access technology providers to furnish a secure, innovative, hybrid Internet and on-line lottery systems solution for its Vietnamese customer.

Gaming software developer BetandChat.com, announced this week that it has signed a contract with World Wide Casino Incorporated (WWC), in which WWC will provide online BetandChat German language casino services for players in Germany, Austria and Switzerland.

1eEurope Ltd (www.1eEurope.com), the self-proclaimed "first pan-European business-to-business total e-commerce services provider," has completed its second U.K. acquisition with the purchase of London-based Britnet, a strategic provider of business-to-business e-commerce solutions, from web design to complex back office integration. Britnet has been selected as the technology and hosting partner to the Premiership Lottery, the first national lottery to be granted a license to operate on the Internet by the British Gaming Board.

Jackpots Galore -- Gaming software developer Microgaming Systems reports, once again, that its highly successful CashSplash^TM progressive online slots system has outdone itself again. The company recently confirmed that more than $730,000 in winnings were paid out in April. That's fore straight months of records going down. The total amount won on CashSplash^TM since it began operating in October, 1998, exceeds $4 million.

Heads Up! -- The Investors' Corner report will no longer be a regular feature in Nambling Notes. Financial-oriented knick knacks will instead appear in a new weekly column that will make its debut Monday.