Nambling Notes - Feb. 4, 2000

Makin' Deals -- Net betting software producer Online Gaming Systems, Ltd. (OGS) announced this week that it has entered into its first agreement with an Australian based gaming operator. According to OGS, Australian Online Casino, which will purchase OGS's entire Internet casino product portfolio, is applying for a license in an Australian regulated jurisdiction. As part of the licensing process, OGS's casino software will go through certification testing. Terms of the agreement call for an up-front licensing fee of no less than $220,000. Further details regarding the licensee will be released at a later date as per the terms of the agreement.

dot com Entertainment Group, Inc., a fully-reporting Internet technology company, has announced an agreement with Internet International Inc., Ltd. of London (III-UK) in which III-UK will participate as a partner in dot com's Bingo Network Program^TM. The program is an expansion of dot com's proprietary sub-license business concept, which is designed to enable anyone in the world to operate an online own online Bingo hall, through dot com's CyberBingo^TM infrastructure. Under the name SOLDUK.com, III-UK is developing a next generation, "net-centric," U.K.-based Internet community designed to deliver a "vertically integrated, fully automated Internet portal e-experience." Among many goodies, the site will feature Internet bingo.

Poker.com announced this week that its subsidiary, Casino Marketing S.A., has sold online casino licenses to JJ Griffen Inc. and Quantum Enterprises LTD, bringing Poker.com's total number of licenses sold to seven. Each licensee will be supplied with a Java-based Internet casino will 19 games. Poker.com additionally announced that its licensee, Antico Holding SA, has launched "Visual Casino" at www.visualcasino.com.

On the E-Commerce Front -- Through the rumor mill, IGN has learned that a credit card processor in Denmark was recently informed by Europay, the MasterCard affiliate in Europe, that Euoropay will no longer allow the Euro Card to be used for online gambling transactions. Additionally, Europay will no longer be taking merchants engaged in the Net betting business.

Winners Internet Network Inc. and European ISP SupraNet AG, jointly introduced the availability of the Supra Secure Mail (SSM), an encryption breakthrough that Winners calls "the most secure and encrypted email service transaction technology in the world." Developed by SupraNet, SSM is designed to provide a new standard for business-to-business financial transactions. The protocol for security gives the user the ability to have a 448 bit key, which according to Winners, is the first key with over 400 bit encryption technology. SurpaNet President and CEO Ronald Oehri said, "the code key encryption is so safe that the biggest computers in the world would take 25 years to penetrate the code." He added, "As a further deterrent, the code changes every 3 minutes making it virtually impenetrable."

Winners announced the acquisition of a 19 percent interest in SupraNet on Thursday.

E-Commerce Times reports that Discover Financial Services is now offering its cardholders the option to have images of their existing Discover cards placed on their computer desktops for online shopping and one-click access to account and purchasing information. The technology was developed for both Discover and MasterCard by Trintech, a provider of secure electronic payment infrastructure systems.

New Faces -- eLot, Inc. announced last week the appointing of Jeffrey Minder and Robert Estevez to handle the sales, marketing and delivery of eLottery's IMARCS (Internet Marketing, Analysis, Research and Communications System) database marketing solution for governmental lotteries. Minder most recently was president of Lottoforce.com and has 14 years of computer and Internet database experience. Estevez spent the last 12 years with the Florida Lottery, most recently as the assistant secretary of marketing.

Alderney-based British bookmaker Sportingbet.com (UK) Plc recently introduced Lawrence Dallaglio as Sportingbet's "rugby ambassador." Visitors to the site will be able to access Dallaglio's views by clicking onto his image on the front page of the site. The 12-month deal will also involve Dallaglio as guest of honor at a series of investor lunches to be held throughout the year.

New Stuff -- Go Cash.com recently debuted a new affiliate program, from BetsOnTheNet.com and CharitiesSportsBook.com, at www.crosspromotions.com. CrossPromotions.com enables websites to cash in on the Internet sports wagering trend by placing a link to BetsOnTheNet.com (www.betsonthenet.com) or CharitiesSportsbook.com (www.charitiessportsbook.com). Webmasters can earn from 10 percent to 25 percent in commissions.

E-Vegas.com Inc. announced Thursday that it has begun beta testing a proprietary gaming software solution. The software project, code-named Stealth 001, features a multi-game desktop function with which gamers can monitor and place wagers on multiple gaming opportunities simultaneously without having to switch screens; financial index wagering; and online eCash and debit/card processing. The software will be available commercially and online March 31. E-Vegas reports that it's currently in the process of negotiating "master distributor" licensing agreements in Latin America, Europe, the Middle East and Asia.

Investors' Corner -- Tropika International Limited once again posted record gross revenues for its second quarter, ended November 30, 1999. Gross revenues for the quarter reached $15.0 million, up slightly from the first quarter's revenues of $14.4 million, and a 206.7 percent increase over gross revenues of $4.9 million for the second quarter of fiscal 1999. For the six-months ended November 30, 1999, gross revenues rose to $29.5 million, up 413.6 percent from $5.7 million for the same period in 1998. Net revenues for the quarter totaled $252,099, down from $281,476 for the same quarter in the prior year. For the six-month period, net revenues reached $762,262, up 75 percent from $434,727 for the same period in the previous fiscal year. The company posted a net loss in the quarter of ($1,045,285), or ($0.015) per share, versus the previous year's second quarter net income of $11,657, or $0.0002 per share. It attributes the loss to continued significant expenditures in hardware, software development, marketing, and infrastructure.

Legal Stuff -- The legal battle between software licensor Total Entertainment Inc. and software developer Intersphere Communications Ltd.--a.k.a. the 100 Year War--rages on. The latest punch, delivered by Total Entertainment, came in the form of a complaint filed against Intersphere for false representation and breach of contract leading to economic damages to Total Entertainment. Total Entertainment maintains that it was forced to terminate the two companies' licensing agreement because Intersphere didn't provide a usable gaming software system or any appropriate support.

Global Net Entertainment Corp. announced this week that its subsidiary, Global Netertainment Corp., has signed a deal to operate software distributed by Grandscale Gaming Inc. The product of the agreement will be online "Global Casinos," which will launch next month. Grandscale has exclusive rights to casino software developed by Radiate Software. Global will also have the right to enter into affiliate marketing and sub-license software agreements with other parties. Under the terms of the sub-license agreement, Global will operate its first casino at www.silverbucks.com and share in the revenue from sub-license agreements that both parties agree to enter into with other operators.

In a related story, IGN has inched a step closer to officially declaring 2000 "The Year of Affiliates out the Wazoo." That should surely outdo 1999, "The Year of Consultants Who Don't Own Online Casinos But Have Unnamed Clients that Do."

Tidbits from the U.S. -- The Public Sector Gaming Study Commission , a non-partisan group of U.S. state legislators assembled to address issues involving gaming in the U.S., rather quietly held its final meetings January 14 and 15 in Orlando. According to a Gannett story, the Commission's draft report indicates that "gambling's explosive growth across America has not proved as harmful as many feared, but much more study is needed." The only two sectors of gaming that seemed to have concerned members of the 11-member panel, reports Gannett, are Indian gaming and--you guessed it--Internet gaming. The Commission also recommends that "the authority to regulate gambling remain firmly in the hands of states." The final report is due to be released in February. IGN will offer extended coverage in coming days.

More business for online sportsbooks? U.S. senators Sam Brownback and Patrick Leahy formally introduced legislation this week that would make betting on college and amateur athletics illegal. Bromback says the bill would "protect the integrity of high school and college sports and reduce the unseemly influences that gambling has on our student-athletes."

According to a January 30 Chicago Sun-Times article, Illinois Attorney General Jim Ryan has his sights set on taking legal action to block online gambling sites. Naturally, the will far outweighs the way, in fact, details on the way remain unspoken.

Tidbits from the U.K. -- U.K. Chancellor Gordon Brown has apparently had it with U.K. betting companies moving offshore to escape the 9 percent betting tax. The latest is that Brown will use his upcoming March budget to close down the loopholes that allow this. The U.K. betting industry has meanwhile pleaded with the government to reduce the betting tax to possibly as low as 3 percent, but Brown doesn't seem to be willing to budge.

Open, the U.K. interactive television service available via Sky Digital, will soon make online betting service Blue Square available to Open customers. The service, expected to be launched in March, was developed under regulatory guidance from the Independent Television Commission and the Home Office.

A Tidbit from Hong Kong -- The South China Morning Post reported Thursday that Hong Kong Secretary for Home Affairs David Lan Hong-tsung recently assessed the presence of online gambling in Hong Kong by admitting that it cannot be stopped. The solution, says Lan, might be a change to existing laws. "This is not something that can be tackled by Hong Kong unilaterally," he said. Lan also intimated that laws outlawing soccer betting will have to be reassessed. "We do not anticipate a quick decision on the matter, which we believe deserves in-depth study," he added.

That leads us to IGN's quote of the week, one that will surely go down as a classic...

Quote Worthy -- "Unlike other jurisdictions, we observe the principle of free flow of information."

- Hong Kong Deputy Secretary for Home Affairs Peter Cheung Po-tak on Hong Kong's approach toward handling online gambling.