Nambling Notes - June 11, 2001

Highlights from the Summit -- Last week's third annual Interactive Gaming Summit & Expo saw roughly 800 interactive gambling professionals doing lots of business and /or gaining an invaluable education in online gambling. As we had hoped, plenty of happenings throughout the week proved to be newsworthy. Following is a rundown of some of the event's highlights:

The hottest issue from the get go was naturally the Nevada Senate's passing of a bill that lays the foundation for legalized, regulated Internet gambling in that state. The seminar that attracted the most attention, thus, was a panel of Nevada and New Jersey regulators that included American Gaming Association President Frank Fahrenkopf, Nevada Gaming Commission Chairman Brian Sandoval, former New Jersey Director of Gaming Enforcement Frank Catania and New Jersey Assemblyman Tony Impreveduto, the sponsor of a bill that would legalize online gambling in New Jersey.
The buzz at the commencement of the day's sessions was confirmation that Nevada Gov. Kenny Guinn intends to sign the Nevada bill. Sandoval, followed up the news by stating his intention to seek an opinion from U.S. Attorney General John Ashcroft on the federal status of Internet gambling. Sandoval, who said that the two will meet "in the very near future," stressed repetitively that the recently passed law does not legalize online gambling in Nevada, rather it represents only one step in a long process. The next step, accordingly, is the aforementioned clearance with the Justice Department. Sandoval said that before the Gaming Commission can move forward, it must determine that "interactive gaming can be operated in compliance with all applicable (federal) laws," namely the Interstate Wire Act.
Impreviduto, meanwhile, conceded that the outlook for his New Jersey bill wasn't as rosy--at least in the immediate future--for political reasons. One point of interest was his explanation of how the New Jersey bill is quite different from the Nevada bill. Unlike the Nevada Bill, which leaves most of the policy making in the hands of the Gaming Commission, Impreviduto's bill assigns the task to state legislators.
Australia's pending prohibition didn't generate nearly as much discussion. It appears that operators and regulators there are prepared for the worst. The biggest attention grabber from Down Under has been the likeliness of an exile similar to that of the one that took England's bookmakers offshore to escape betting taxes. The man of the hour in Toronto was casino operator/media mogul Kerry Packer, who has apparently committed to planting offshore roots of his own at Vanuatu. A regulator from Vanuatu was quick during discussions to clarify that Packer has not yet received an online gambling license there, but he also said that he expects Packer to eventually set up shop on the island.
The week's bravest presenter was Catherine DeMaria of Visa, who spoke to a borderline hostile audience about her company's policy toward Internet gambling--an extremely sensitive issue in light of Visa's and MasterCard's unwillingness facilitate online gambling transactions. DeMaria perhaps made the mistake of presuming that her audience would appreciate her willingness to open a line of communication between Visa and I-gaming operators. Disappointingly--and yet not surprisingly--a few audience members, painfully incognizant of the fact that DeMaria did not personally draft Visa's policy and is not out to get everyone in the business, used her presence as an opportunity to vent their frustrations with transaction processing problems of late.
The summit marked the software supplier formerly known as Starnet's first appearance under its new moniker, "World Gaming." The company, which recently relocated to the United Kingdom, exhibited its new C++ software package and intends to make the suite available to licensees in July.
Boss Media of Sweden displayed its new Java-based gaming platform, which will complement its downloadable suite of games, while its Casino.com holding officially debuted its Casino.com print publication, a magazine dedicated to covering online gambling from the consumer's perspective.
LikewiseChartwell Technologies introduced its next generation of games. The new system is powered by a Java back end and interfaces with players through a Flash front end. Chartwell licensees will begin carrying the new software in mid summer.
The River City Group, the publisher of Interactive Gaming News and the producer of the summit, offered a preview of a study--slated for release in July--that will profile more than 2,000 current and potential online gamblers. "The River City Gambler Monitor" will focus on identifying key trends in an effort to determine ways of acquiring and retaining customers. Stay tuned for more details.

And now, Nambling Notes . . .

Tidbits from the US -- According to the Iowa State Daily, an Iowa State sports team is under investigation by the ISU athletic department regarding the suspicion of Internet gambling within the department. Both the NCAA and Big 12 Conference have been informed of the violations. The athletic department says the development is "an isolated incident involving a non-revenue sport and Internet gambling." The identity of the team hasn't been disclosed, although the Des Moines Register reports that it was the men's golf team.

As briefly mentioned in the summit highlights, a spokesperson for Nevada Gov. Kenny Guinn said last week that the governor will likely sign the Internet gambling bill passed by the Nevada Senate last month. "Barring some technical or otherwise unforeseen problem with it, we're anticipating signing it," spokesman Jack Finn said. Guinn has 10 days to sign or veto the bill from the day he received it. According to Reuters, the Gaming Commission could take up the issue as early as its regular meeting in July.

New Stuff -- Bingo.com, Inc. has thrown its hat into the expansive "games of skill" arena. The provider of free online bingo entertainment announced last week that it is developing a skill-based bingo game to be offered in a pay-for-play format. Upon its formation, the company set out to offer real-money gambling, but it switched to a free-play model in March 2000. It has since established a membership base of 700,000 players and has been ranked several consecutive months by Media Metrix as the "Stickiest Site on the Web."

Horsepower Broadcasting Network (HBN) International Ltd., a wholly owned subsidiary of Sungold Entertainment Corp., began accepting USD wagers at its website, www.horsepower2.com, over the weekend. HBN operates the Horsepower^TM2 game on a Sun Microsystems/Cisco platform and is utilizing both Oracle and Horsepower proprietary software. Horsepower 2 is a unique online virtual horseracing game that enables all players an equal chance to win when wagering on common pari-mutuel pools. The pools are created by players on the Web betting on continuous races with 14 virtual horses. The game is played in real time 24/7 and features a new virtual race every 90 seconds. Players can wager as little as $2 or as much as $100,000 on one horse or up to six horses in exact order of finish.

Makin' Deals -- dot com Entertainment Group, Inc., through its dot com (Antigua) Ltd. subsidiary, announced last week that it has entered into a license agreement with Universal Marketing Ltd. of Nevis to deliver and install a complete Internet casino system in August 2001. Universal Marketing Ltd. and its affiliates have several years of experience in the Internet gambling market. Making use of its proprietary traffic generation system in Israel, Universal Marketing anticipates that it will quickly be able to formulate a "top-tier" Internet casino. "Given their experience in this sector and their innovative marketing infrastructure, we believe that Universal Marketing Ltd. has the capacity to do very well in the competitive e-gaming sector," dot com President and CEO Scott F. White said. "We will be working very hard to help this licensee launch its Internet casino at the earliest possible date in order that we can generate royalty streams in Q3 2001." The announcement marks the completion of dot com's 15th license agreement, up from two licensees in Q2 2000.

On the Advertising Front -- Irish bookmaker Paddy Power thought it would try something cute by suggesting that it would place odds on two elderly women making it across the road safely. The two women were depicted in a poster advertising the launch of the company's U.K. betting service. Odds were placed on each woman, along with the caption, "Let's make things more interesting." More than 50 complaints later, it appears that not everyone found the advertisement humorous. The Advertising Standards Authority (ASA), which fielded the complaints, has consequently banned the campaign. The company stressed that the bet was on which woman would reach the other side of the road first and not which one would be crushed by an approaching truck. Nevertheless, the ASA says the ad "mocked (the elderly women's) mobility and was likely to cause widespread offense" and has ordered Paddy Power to withdraw the poster.