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Mark Balestra

Nambling Notes - Feb 2, 2000

2 February 2001

New Stuff -- MGM Mirage has very quietly launched its free-play online casino at The software was developed WagerWorks, Inc., a subsidiary of game machine developer Silicon Gaming. Visitors can partake in Silicon Gaming machine games, including its very popular Odyssey slot machine, at virtual versions of MGM Grand, the Mirage and other land-based gaming facilities owned by MGM Mirage.

London-based Interworld Gaming Ltd. this week announced the launch of its new online casino, The new site is the latest virtual casino to go live using software developed by Boss Media of Vaxjo, Sweden. The site operates under an Internet gaming license granted by the Kahnawake Gaming Commission in Quebec, Canada. At the helm of Interworld are John Dunkley and David Samson, both of whom acquired gaming expertise while managing and directing some of Britain's most prestigious casinos, including Crockfords of London.

Financial Spreads has debuted at its website a spread betting service that enables punters to wager in units as low as a penny. The new service enables low rollers to enjoy spread betting without facing the steep risks that typically come with the aggressive style of wagering.

The latest P2P betting site to come onto the scene is, a sited that enables bettors to wager against other bettors all over the globe. Participants invent their own wagers, set there own odds and post them online in hopes of fining takers. "It's all about freedom," Play 121 Director Simon Capreis said. "You can make bets, take bets or just surf around to see what kind of odds are out there. If there's a big event coming up that you're interested in, the chances are that someone will make a wager on it. If you know better, play121 is your chance to have your say and make some money while you're at it." recently announced the formation of a partnership with Equifax in which Equifax will provide e-checks that can be instantly purchased and redeemed. The e-checks will eliminate delays for check approval and redemption at online gaming sites.

Tidbits from the US -- Harrah's Entertainment, Inc. continues to roll along accepting praise for the database behind its successful "Total Rewards" player's club system. This week the company received the CIO Magazine Value Award for the year 2000. The company shares the award with Office Depot and Tufts University. Previous winners include Charles Schwab & Co., Dell Computers and Pfizer Inc. The Enterprise Value Award honors organizations that have achieved business value through the innovative use of information technology. Applications are judged on business value criteria such as strategic, customer, social or financial impact as well as technical excellence. In August, Harrah's was the only gaming company included among the winners of the 2000 CIO-100 Award for customer-service excellence.

The company's IT excellence has piqued the curiosity of many among the interactive gambling industry, particularly in light of its recent launch of a free-play online casino through its partnership with gambling software developer Chartwell Technologies Inc. Harrah's is clearly in a strategically advantageous position should online casino gambling be legalized in any jurisdiction where the company is located. This is precisely why many were surprised when Harrah's Eastern District President Tim Wilmott came out against Internet gambling last week while assessing the introduction of a New Jersey bill that would enable Atlantic City casinos to accept bets over the Internet. Something to stow away for consideration later on down the line: Don't be surprised if that's the last you hear of such a stance on behalf of Harrah's and don't be surprised if a somewhat friendlier position is taken in the future.

The trial of offshore sportsbook operators Dennis and Joseph Atiyeh, scheduled for Jan. 29, was rescheduled for March 5 at the request of the federal prosecutor. Dennis Atiyeh is on trial for allegedly operating an illegal gambling business in Pennsylvania. Both of the brothers are accused of money laundering and conspiracy to launder money. They were indicted Nov. 9, 2000.

The Securities and Exchange Commission was unsuccessful in its attempt to shut down "StockGeneration," an online virtual stock exchange operated by SG Perfect Limited. The SEC took the company to court in June 2000 on the grounds that StockGeneration was a scam and in violation of federal law. A U.S. District Court judge ruled this week, however, that the site is clearly labeled a game and that it was not within the SEC's authority to shut down the site because it didn't offer, buy or sell securities. According to an AP article, the judge cited the repeated use of words such as "winner," "player" and "prize" as evidence that there was no attempt to promote the site as a service that carries out securities transactions. The company's $6.5 million in assets had been frozen upon the SEC's obtaining of an order to shut down the site. The SEC hasn't decided yet whether it will appeal the decision.

Tidbits from the Far East -- The Hong Kong Jockey Club has seen a significant decline in betting turnover over the past year, and Jockey Club Chief Lawrence Wong blames it on competition brought on by Internet betting and illegal bookmaking. "The government should be very concerned, but so should all Hong Kong citizens," Wong said while speaking after the Lunar New Year meeting at Sha Tin. The solution, he said, is to base taxes on profits. "Hong Kong cannot afford to be laid back about the threat to revenue from illegal and Internet betting because if the money is not raised from horse racing, it will have to be raised from elsewhere. The only long-term solution is to move to a tax on profits," he said. Currently the Hong Kong gaming operations pay a 14 percent tax on betting duty. He continued, "In theory, if you don't tax punters as much at source, they will bet more. The problem we face . . . is that punters face a takeout of 19 percent if they bet with us, whereas illegal and Internet bookmakers can offer huge inducements to punters because they don't pay the same tax." Wong estimates that $40 billion to $50 billion is lost to illegal bookmakers every year.

Jose Antonio Gonzalez, the chairman of Mondragon International Phils. Inc., last week filed charges of graft and four charges of plunder against ex-Philippine president Joseph Estrada, Philippine Amusement and Gaming Corp. (Pagcor) Chairman Alice Reyes, Pagcor CEO Butch Tenorio, former flagship project adviser Robert Aventajado and others. ABS-CBN reports that the charges stemmed from the forced takeover of the Mimosa Leisure Estates by the Clark Development Corp. and the Philippine National Police (PNP), even though a temporary restraining directed all parties to come up with an amicable settlement. Estrada was impeached for several acts of corruption, including accepting bribes from illegal gambling syndicates.

Tidbits from Down Under -- Australian businessman John Hodgman is getting close to launching his made-for-the Internet horse and greyhound racing project. His company, TeleTrak is building a 1,600-meter straight track at Waikerie. Dog and horse races will be taped and televised for off-track bettors, but no wagering will take place on the property. Guardian Unlimited reports that the South Australian government has approved the concept, and that the construction of the track is almost complete. If all goes as planned, live racing will commence by the end of the year.

A controversy involving hardcore pornography and online casinos has rattled the election campaign of a Western Australian Liberal minister. It was revealed this week that the website of Roger Nicholls, a former family and children's services minister, is linked a news site that offers quick links to websites featuring both types of adult entertainment. Nicholls, who maintains that the news site didn't carry such advertisements when the link was established, says his staff is tracking them down and removing them.

The government of Victoria has tightened the restrictions on gambling-related advertising in the state. New rules mandate that all television, radio and printed advertisement for gaming in Victoria include warnings about excessive gambling. As reported by the Age, under the restrictions advertisements cannot "suggest winning as a probable outcome of playing pokies; describe money gambled as an investment; suggest that skill can influence the outcome; imply that the chance of winning increases the longer spent gambling; or suggest that a person's attractiveness, social status or wealth would be improved by using gaming machines." Violators will be slapped with $2,000 fines. The new policies, part an overall effort to take on problem gambling, were preceded by an announcement that gaming venues must install clocks on poker machines and provide brighter lights in gaming rooms.

A Tidbit from Way Down Under -- New Zealand's Department of Internal Affairs reports that gaming expenditures in New Zealand for the 1999/2000 year totaled $1.3 billion, an 11 percent increase over the previous year. The department divides gambling into four categories, which are broken down as follows: Non-casino gaming machines saw $450 million in expenditures (nearly 25 percent more than last year); the amount spent at casinos increased by 17 percent to $343 million; the amount spent on sports and racing wagering rose by around 1 percent to $227 million; the Lottery Commission, representing the only gaming sector to report a drop in expenditures, saw the amount spent on its products fall to $277 (nearly a 4 percent decrease).

A Tidbit from the UK -- Coral Eurobet has enlisted the services of IG Index, a British financial and spread betting bookmaker, to bring spread betting to Coral customers.

Tidbits from the Caribbean -- Antigua and Barbuda Prime Minister Lester Bird says his government is cleaning up its offshore sector in hopes of becoming one of the most reputable off shore business locales in the world. According to the country's government now requires all of its banks to be monitored by full-time compliance officers and to undergo annual inspections under a new "Know Your Customer" policy. Further, Bird says the government has made great progress in its effort to improve its standing with the United States and the United Kingdom, both of which have warned the business community that Antigua's money laundering policies are not strict enough. Through the new regulations, the number of IBCs in Antigua has fallen from 10,000 to around 2,000.

Meanwhile, a few other Caribbean Basin jurisdictions are making progress in their efforts to put themselves in good standing with the Financial Action Task Force. In June 2000, the FATF named 15 countries throughout the world that it considered "non-cooperative" in the fight against international money laundering. The FATF announced yesterday at a meeting in Paris that seven of the jurisdictions on the list--the Bahamas, the Cayman Islands, the Cook Islands, Israel, Liechtenstein, the Marshall Islands and Panama--have enacted legislation necessary to get them in good standing. The FAFT also said that four additional jurisdictions--Dominica, Niue, St. Kitts and Nevis and St. Vincent and the Grenadines--have taken "concrete steps" toward enacting the appropriate legislation.

New Faces -- Sungold Entertainment Corp., a technology company that has developed a Java-based online game in which bettors wager on computer-generated horses, this week announced the appointment of Steven Marette and Peter Morgan to the board of directors for Sungold and Horsepower Broadcasting Network. Both execs have been granted 100,000 incentive stock options in Sungold at US$0.15 per share. Marette, 38, was the operating manager for Technical Systems Testing, where he was lead project manager for the government of Antigua and Barbuda. He also wrote and published the Internet standard for the government of Dominica Republic and managed and developed gaming machine testing programs, systems acceptance programs and technical standards/training programs for the Atlantic Lottery Corporation, British Columbia Lottery Corporation, Ontario Lottery and Gaming Corporation, Oregon Lottery Corporation and The State of Arizona. Morgana, 38, has 15 years of experience managing logistics and operations with high technology companies. Inc., a licensing and marketing company that sells and sublicenses Internet poker, casino and bingo gaming systems, has partnered with three highly respected poker writers who will provide content for the website, and its Poker Faces newsletter: Dan Kimberg, Lothar Landauer and Jesse May.

Gaming software provider Online Gaming Systems, Ltd. announced that it has appointed Lawrence P. Tombari to the position of chief financial officer. Tombari was previously a CFO and senior vice president for Lady Luck Gaming Corporation, where he was responsible for building and directing the finance, accounting, and capital budgeting functions of the company, as well as coordinate SEC, NASDAQ and investor relation programs.

Quote Worthy -- "Who would you rather place an online bet with, Joe's Cayman Island Casino & Bait Shop or Harrah's Las Vegas?"

--Author and consultant Jack Shaw speaking at a Nevada Chamber of Commerce conference last week.

"I think we have to pay attention to what's going on the Internet. Internet gaming is in its infancy. If they really start to get smart and put together good casino sites, and they're allowed to conduct business in any manner they wish, they will appear much more attractive than a traditional casino operation."

--Ameristar Vice President for Finance Art Hill, as quoted by Knight Ridder, referring to the possibility of online casinos taking business away from land-based casinos in Iowa.

Mark Balestra
Mark Balestra is the Managing Director at BolaVerde Media Group. He previously worked at Clarion Gaming and the River City Group where he was the publisher of iGamingNews. He lives in St. Louis, Missouri.
Mark Balestra
Mark Balestra is the Managing Director at BolaVerde Media Group. He previously worked at Clarion Gaming and the River City Group where he was the publisher of iGamingNews. He lives in St. Louis, Missouri.