Nambling Notes - June 1, 2001

A Ho Bunch of Confusion -- HKiMail reports that casino tycoon Stanely Ho is exploiting loopholes in Hong Kong law through a US$2 million marketing campaign aimed at luring Hong Kong bettors to his offshore online casino, DrHo.com. According to the publication, Ho is using the Internet to spread the word about his site, and there's nothing authorities in Hong Kong can do about it. He's also distributing free DrHo.com CDs on Singapore Airlines flights as well as on ferries that run from Hong Kong to Macau. Cheif Executive Peter Kjaer insists that what they're doing is legal. "We're sticking to the letter of the law,'' he explained. Hong Kong gambling laws don't cover offshore operations, so Ho's Web gambling business, which is operated out of Antigua, can continue the ad blitz. The Hong Kong government is hoping to close the loophole by passing a law that would prohibit offshore gambling. Kjaer, who happens to be Ho's son-in-law, says the government's plan is "unworkable and unenforceable."

Ho's response to inquisitions surrounding the delicate situation clouds things even more. According to Apple Daily, the 80-year old billionaire has denied his involvement with the site. "The website is the bright idea of my son-in-law, Peter Kjaer," Ho said. "He had expressed interest in an Internet casino when I visited him in New York some years ago. And he is now using my name to boost its publicity. . . . Thanks a lot to him." Ho's daughter, Pansy Ho, added, "My father is very professional; he will make careful considerations even when there is a business opportunity. He will not do anything against the law, including Internet gambling, on which we have a tacit agreement with the Hong Kong government that it is a no-go business."

Tidbits from the US -- Oregon's House of Representatives has passed a bill that would prohibit Internet gambling in that state. SB 755, which has already passed in the Senate, now goes back to the Senate for action on amendments. The bill, unlike similar bills surfacing elsewhere, focuses on financial transactions. Under the terms of the legislation, the collection of gambling debts through credit card payments, checks or electronic transfers would be illegal. The bill does mandate, however, that credit card companies would not be held liable for such debts. The House passed the bill by a 57-2 vote without debate.

America watched in amazement last week as Sen. James Jeffords of Vermont bailed out on the Republican party, leaving the majority control in the hands of the Democrats. The move will have numerous implications on several facets of policy making, including the legislating of gambling matters. The shift of power to the Democrats thrusts Nevada Sen. Harry Reid into the position of majority whip, making him the second most powerful member of the Senate. Reid, naturally a strong supporter of gaming in Nevada, becomes the highest ranking Nevada Senator ever, and the casino industry is thrilled. American Gaming Association President Frank Fahrenkopf said the shift was "very positive news for the industry and the state of Nevada." Wayne Mehl, the Washington lobbyist for the Nevada Resort Association, added, "Having someone there with his experience, his knowledge and now his power is awesome. It will have an impact the minute he assumes that role."

The Las Vegas Sun reports that Alliance Gaming Corp. of Las Vegas has sued a Costa Rica man to stop him from using the domain name "alliancegaming.com" to allegedly divert Alliance's website users to at least three gaming websites allegedly administered by him. Alliance seeks an order to stop David Highfield's operation of allegedly "unauthorized and unregulated" online casino websites. The company also seeks an order for an accounting of Highfield's profits earned from the use of the domain name, including ad revenues generated by his sites, sales made and information on how many people were diverted to the websites. Highfield argues, however, that he registered the domain name without knowing that Alliance Gaming existed. I told them earlier that I've no problem relinquishing the domain name provided they pay for it," he said. "But they never got back to me. . . . If they want the name back, they can have it. I can always register under a different website."

New Stuff -- Those who attended the European Lottery Congress in Cannes, France this week witnessed the unveiling of Access Gaming Systems' new SMS mobile gaming solution. The application enables lottery operators to offer draw and instant games to players via mobile phones and uses the ACES secure Internet gaming engine to operate and administer the games. Participants can play by registering with the ACES system and sending an SMS message containing their PINs and their chosen game numbers. Lottery operators can send players reminder messages asking them to play or informing them of jackpot amounts and other news.

Canadian gambling software developer CryptoLogic Inc. this week announced plans to expand its suite of online gaming products with multiplayer interactive poker technology. The company also announced that its WagerLogic subsidiary has signed LasVegasFromHome.com Entertainment Inc. as its first poker licensee. "Poker is the most popular card game in the world, and for CryptoLogic, it's a huge untapped segment of the Internet gaming market," CryptoLogic President & CEO Jean Noelting said. "We can leverage our new poker software with LasVegasFromHome's significant market expertise and relationships with global gaming brands in Vegas and abroad. Poker expands our game mix and will help our licensees leverage and increase their user base with another great offering. CryptoLogic's poker room will offer a total turnkey solution that links multiple licensees at one exciting destination, giving players a vast choice of games and stakes. Already under development, we expect this new game to be live and running by the fourth quarter of this year."

Wembley PLC's online greyhound betting business, 24dogs.com, has launched a tote betting service. "Tote betting is by far and away the most recognized form of betting globally," Chief Executive David Craven said, "so it is more likely to attract leisure bettors." Craven also said that the company is hoping to partner with trackside tote pools to achieve the critical mass necessary for making a tote system attractive. "We would place bets trackside on behalf of the Internet punters in a system called co-mingling, to provide a shared pool of winnings," he explained.

Transnational Market Development, Inc. this week introduced FLIDT, the company's quantitative methodology of due diligence analysis for the lottery industry. The FLIDT process has been developed and utilized for the past two decades with over 200 organizations throughout the world. The system offers a methodology that analyzes and scores 10 categories of an institution's operations. The process has been used for more than 20 years and has been accepted by some of the world's largest investment banks as one of the main criteria used in allocating investments for mergers and acquisitions.

Makin' Deals -- Sportinglife.com has finalized a deal with Yahoo! UK & Ireland through which Sportinglife.com will supply expert and in-depth sports content to Yahoo. The deal will enable Yahoo! users in the United Kingdom and Ireland, as well as throughout the world, to access the latest sports news and information. On Tuesday, Sportinglife.com began providing co-branded content from a U.K. perspective for a whole range of sports, including football, racing, rugby and cricket.

SafeTrade Limited, an Australian firm offering e-commerce sites what it terms "Internet transaction insurance," has signed its first I-gaming client, Gamble.com.au of Vanuatu. Through the service, which is underwritten by Lloyd's of London, SafeTrade guarantees online gamblers that they will be reimbursed for losses due to fraudulent use of their credit cards. Launched in March, Gamble.com.au is an online casinos that's fully licensed by the government of Vanuatu.

dot com Entertainment Group, Inc., through its dot com (Antigua) Ltd. subsidiary, announced this week that it has entered into a license agreement with Helix International Ltd. of the British Virgin Islands to deliver and install a complete Internet bingo system on or around August 15, 2001. In addition to its bingo license, Helix has also engaged the services of Inferno Media, dot com's in-house marketing department, to provide a complete re-brand of its current website. The announcement represents the successful completion of dot com's 14th license agreement, with 12 of the agreements being completed since Q3 2000. The company says it will announce more deals both its Internet bingo and casino technologies in months to come.

Breakin' Deals -- Coral Sea Petroleums Ltd. announced this week that it has discontinued its involvement with Internet gaming by terminating its relationship with Cybergaming Entertainment Inc. and International Gaming Technologies Inc. The company will pursue the development of its oil and gas properties while continuing to investigate other business opportunities. The company also announced that Vic DeLaet has resigned from the board of directors. DeLaet was appointed to the board because of his knowledge of Internet gaming

On the European Front -- The European Federation of Coin-Operated Amusement Machine Associations (EUROMAT), during its recent annual meeting in Brussels, called for equal treatment of all gaming activities--with or without prizes--on the Internet. EUROMAT President Eduardo Antoja says that the regulation of some sorts of Internet games and leisure activity and the lack of it for others, particularly gambling, creates unfair competition. "We encourage gaming regulators to modify the existing laws to address the situation." he said "Technology around Internet gaming applications develops quickly and these games will compete with or displace the legally established games."

The Racing Post reports that the British Horseracing Board is close to announcing plans to break up the sole distribution of live racing pictures into betting shops. The move will end SIS's 15-year stint as the sole provider. The contract with the Racecourse Association expires in April 2002. The Board is now said to be negotiating with RCA to put together an exclusive arrangement, although multiple bidders to take on-course pictures will be considered.

A Tidbit from Way Down Under -- Much change is in store for New Zealand's racing industry. Parliament introduced a bill Wednesday that would merge the Racing Industry Board and the TAB into one organization. Currently, the Board oversees economic development of the industry, determines the racing calendar and distributes funds, while the TAB focuses on providing race and sports betting.

Names and Faces Changing Places -- CryptoLogic has announced that Dennis Wing has been named the company's new chairman of the board. Wing, who succeeds Austin Page, has served as a director since June 1999, but has been actively involved with CryptoLogic since the company's initial rounds of financing as a private enterprise. Wing is also the president of Fahnestock Canada Inc., a U.S. investment bank.

Gaming Internet plc has hired actor and former football player Vinnie Jones to promote its gobarkingmad.com Internet greyhound racing service. Jones will be the promotional ambassador for the website for the next two years. He'll make public appearances and provide betting tips for greyhound punters. Gaming Internet will grant Jones 100,000 share options at an exercise price of 20 pence per share.

The Canadian Foundation on Compulsive Gambling (Ontario) is changing its name to the Responsible Gambling Council (Ontario).