Nambling Notes - Jan 26, 2000

Tidbits from the US -- The push for regulated online casino gambling in New Jersey has taken a big step backward. State Assemblyman Tony Impreveduto introduced a bill last week that would enable Atlantic City casinos to offer their games over the Internet. A few days later, the Casino Association of New Jersey came out with its views on the legislation, and they weren't pretty. Most disappointing were those of the association's president, Tim Wilmott, who is also the Eastern District president of Harrah's Entertainment. "It's really something we don't see fitting into our form of entertainment," Wilmott said. He added that he didn’t feel Internet bets could be "adequately regulated." Harrah's is considered to be a potential major player in the online gambling business should Net betting be legalized in Nevada. The company has already invested $10 million in its Web campaign, which includes a free-play online casino developed by Chartwell Technology Inc. A major casino friend in Trenton, Sen. Bill Gormley, said he would fight the legislation.

Gambling interests in the United States have looked upon the election of George W. Bush with caution because of his somewhat unfavorable position on gambling. Approaching his inauguration, he appeared likely to let the states deal with gambling issues, but in case he wasn't, the Venetian, MGM Mirage and International Game Technology (IGT). thought they'd give him a nudge in the right direction. The three gaming companies contributed $100,000 each to help fund Bush's inauguration. Overall Bush raised $40 million dollars; Two-hundred fifty companies donated $100,000 apiece.

For the online gambling industry, the three companies' backing of Bush does have some significance, particularly in the case of MGM Mirage, which will soon launch a play-for-free online casino. MGM Mirage Chairman Terry Lanni has on several occasions pronounced himself an advocate of regulating online casinos. IGT, meanwhile, formally held a stake in Access Systems, a Sydney company that designs online gambling software, and played a role in marketing Access Systems' ACES Internet gaming system. IGT was pressured by Nevada regulators in December 1999 to divest its interest in Access.

Lanni, meanwhile has admitted that his participation in the National Gambling Impact Study Commission's opposition to Internet gambling in 1999 did not reflect his true sentiment. "I chose not to take a stand. Life is a series of compromises," he told the Las Vegas Review-Journal this week. "I did not want to be the lone holdout. I wanted to be reasonable and prudent."

The standoff between Las Vegas and the NCAA appears to be getting nastier by the minute. The NCAA is the driving force behind federal legislation that would make it illegal for Nevada sportsbooks to accept wagers on college sports. The Nevada Gaming Commission offered somewhat of a compromise last year by proposing to cap all NCAA bets at $550. Supporters of the college betting ban, however, made it clear that they won't budge, and now the Commission has moved to the other side of the pendulum. This week, to the dismay of the NCAA, the Commission lifted its long-standing ban on gambling on Nevada college sports teams. Naturally, the NCAA was quick to criticize. "They've expanded college sports wagering," said Bill Saum, director of the NCAA's agent and gambling activities office in Indianapolis. "They actually went the opposite direction we were hoping for." Sports bettors in Nevada can now wager on Nevada college teams for the first time since the 1950s.

The sentencing for Island Casino's Allan Ross has been postponed again. Ross has entered a guilty plea for violating the Interstate Wire Act of 1961, a law that makes it a crime to accept wagers over state or national borders using a wire communication facility. His sentencing is now scheduled for Feb. 5.

The Las Vegas Sun reports that MGM Mirage's Mirage Resorts Inc. has sued two Tortola, British Virgin Islands-based companies, for infringing upon Mirage's trademark by allegedly linking it to an online casino. The companies, Baltic Consultants Ltd. and Travill Consultants, are being sued in a U.S. District Court for allegedly ignoring Mirage's demands to stop using the Mirage's Treasure Island trademark and to return the domain name "www.wwwtreasureislandlasvegas.com" by Oct. 9, 2000.

Tidbits from Europe -- Look for activity in the British isles in coming weeks pertaining to the legalization of online casinos. In Isle of Man, Internet casino legislation went to parliament for the first of three hearings on Jan. 23. Results of the hearing have so far been under wraps. Meanwhile, an anonymous source in Alderney told IGN that the territory is likely to make the decision in three to four weeks to license online casinos. If it does so, licenses would probably be issued within the next five to six months. Both island jurisdictions are currently home to online sportsbooks.

Reuters reports that the European Commission approved on Monday an agreement settling litigation between British bookmaker Ladbroke Group Plc and the French racing service, Pari Mutuel Urbain (PMU), over the broadcasting of French horse races in Belgium. The dispute between the two groups, which started in July 1990, was over the right to retransmit in Belgium satellite horse races held in France. Ladbroke argued that the refusal of the French racing societies and the PMU to provide the firm with the French sound and pictures was an abuse of a dominant position. Upon the settlement, PMU has agreed to supply, on a non-exclusive basis, live televised pictures of French races as well as commentary and data to Ladbroke to be broadcast in Ladbroke's off-course betting shops in Belgium.

A Tidbit from the Far East -- Recently impeached Philippine President Joseph Estrada, ousted for several acts of corruption, including accepting bribes from illegal gambling syndicates, says his loss of executive power is only temporary. Estrada has reportedly told several government officials that he'll be back and reminded them that under the Philippines constitution, the president is allowed to resume his duties when he claims he is able to. He'll be served with a formal order Tuesday requiring him to answer to charges against him.

New Stuff -- Net Entertainment, a company that operates online casinos, has launched what it's calling the world's first Java-based multi-player Texas Hold'em poker game at www.cherrycasino.com. The software, developed by Ongame, was available for over a year in free-play mode at Ongame's www.pokerroom.com. During that period Ongame acquired over 35,000 registered poker players.

Makin' Deals -- Virtgame.com Corp., an application service provider specializing in e-BorderControl technologies for the gaming and lottery industries, announced Monday the signing of a technology integration letter of intent and a reseller agreement with e-Success Inc., a leading real-time auditing and fraud detection company. Under the agreement, Virtgame.com will enhance its e-gaming platform to provide the capability for its systems to be continuously monitored by Integrity, e-Success' real-time transaction auditing product. Virtgame.com will be able to provide its customers the same degree of assurance currently supplied by e-Success to various government state lotteries. Additionally, e-Success will interface Virtgame.com's eBorder product with Citadel, e-Success' payment fraud detection system. Virtgame's e-BorderControl technology will provide the capability for Citadel customers to restrict Internet gaming to specific geographical jurisdictions.

dot com Entertainment Group, Inc. has announced that it has entered into a license agreement with Punto Equiz S.A. of Costa Rica to deliver and install a complete Internet bingo system for Punto. Punto's online bingo system was delivered and installed at its facilities in Costa Rica on January 11, 2001. "As is typical in our online bingo license agreements, Punto will remit to dot com an up-front installation fee and future royalty payments, which will be based on Punto's online bingo revenue," said dot com President and CEO Scott F. White. "We expect to generate cash-flow from Punto's online bingo operations in this financial quarter."

betinternet.com Plc last week announced that Euro Off-Track, its 50-50 joint venture with the Greyhound Channel, Inc., has signed an exclusive broadcast and waging agreement with the Irish Greyhound Board. Through a live feed the U.S. greyhound public will be able to bet directly into the Irish Tote Pools.Customers will also be able to place bets directly into the Irish and American Totes and through a clipping service to view the races live. The agreement gives Euro Off-Track the exclusive rights to receive and broadcast the live audio-visual feed of races from Shelbourne Park and Harold's Cross, directly into the United States and the other markets in which it operates. Further, Euro Off-Track can sub-license its broadcasting rights of Irish Greyhound races to third parties, such as Internet and telephone betting service providers and traditional betting shops. The agreement exposes Irish Greyhound racing to a U.S. viewing public of several millions and with an annual turnover of $2 billion.

Go Call Inc. has announced the arrangement for divestiture of its interest in Margarita Villas Hotel in the Dominican Republic. Most of the liability for the hotel was removed in a marketing arrangement last December, but the asset remained on Go Call's books pending sale of the hotel. The divestiture has removed all remaining interest in the hotel from Go Call's books entirely.

A New Face -- eLOT, Inc. announced this week that Gregory P. Ziemak has been named senior vice president of sales and marketing. Ziemak will be responsible for domestic marketing of eLOT subsidiary eLottery’s products and services to state and governmental lotteries. Ziemak has over 27 years of lottery industry experience; 18 of those years were spent in key executive positions managing diverse lottery operations. Prior to joining eLOT, Ziemak was the executive director of the Kansas Lottery.

Quote Worthy -- "I think it’s good. It's a very complex subject that has to be dealt with at the federal level, but it's very possible that it could be good for the casino industry."

--Casino Owner Donald Trump referring to recently introduced legislation that would enable Atlantic City casinos to offer their games over the Internet.