Nambling Notes - June 2, 2000

Tidbits from the U.S. -- A bill that would prohibit Internet gambling in the state of California passed May 30 in the Assembly by a 61-6 vote. AB 2179, sponsored by Assemblyman Herb Wesson, would authorize the attorney general to bring criminal and civil actions against Internet companies that offer prohibited games to California citizens. Operators could be charged with a misdemeanor with a maximum penalty of 90 days in jail and a fine of $1,000 per transaction. Gamblers could be charged with an infraction and fined $100 per transaction. The bill has been sent to the Senate.

Rep. James A. Leach, chairman of the House Committee on Banking and Financial Services, announced this week that full committee markup of HR 4419, the Internet Gambling Funding Prohibition Act, has been scheduled for Thursday, June 8 at 11 a.m.

The parliamentarian of the House of Representatives last week approved the request of the Commerce Committee to have H.R.3125, the Internet Gambling Prohibition Act, referred to it for review. Harness Tracks of America, in its daily newsletter, reminded the racing industry that the development exposes to danger "the hard-won exemptions in the bill for horse racing." HTA reports: "Congress is adjourned for the Memorial Day break until June 5, and it is important that tracks contact legislators from their states who are on the Commerce Committee and let them know why it is critical that racing's exemptions remain in the bill. HTA directors in those states are being faxed American Horse Council materials today that will assist in preparation of such letters. The materials include well reasoned arguments for support of the measure as it now stands in relation to racing, and excellent backup material on racing's position. Please act on this as soon as possible. We are going to need as much support as we can get to preserve the bill as currently written."

Gambling isn't the only activity on the Internet that U.S. legislators are trying to block by stifling avenues of payment. The Justice Department is seeking the power to stop Americans from purchasing drugs online from overseas pharmacies by blocking related financial or credit card transactions. On May 2, the FDA sent to Congress the "Internet Prescription Drug Sales Act," which would regulate online pharmacies. The controlling of domestic sales appears to be within the grasp of the DOJ. Many argue, however, as they do in the case of prohibiting online gambling, that circumventing international sales can't be done.

In Louisiana, where a bill legalizing account wagering was recently passed, Fair Grounds president Bryan Krantz was quoted in Blood-Horse Daily Edition as saying his track will not utilize the TVG wagering hub operated from Oregon by NTRA Services, but will use one that may be operated by his track. TVG and NTRA both responded saying they hoped Fair Grounds and other tracks would "maintain a national perspective" and realize the "established infrastructure" made economic sense.

Thanks to an in-house survey that found that less than half of the 100 most popular websites use industry-accepted fair information practices, the Federal Trade Commission has called on Congress to step up its efforts in protecting consumers via laws that establish standard practices for collecting information online. The survey revealed that only 8 percent of randomly sampled of sites and only 45 percent of the most popular sites, display a privacy seal. The FTC's recommendation for legislation comes as somewhat of a surprise because it has traditionally urged self-regulation by Internet businesses. Following the release of the FTC's report, Sen. Ernest Hollings, D-S.C., introduced the Consumer Privacy Protection Act, which requires online sites to obtain consumers' consent for their data and give them the choice to opt out of supplying information.

Tidbits from Europe -- The U.K.'s second biggest bookmaker, William Hill, will no longer be in the thick of the battle for supremacy among the region's heavyweight online wagering services. The company is ending its days of paying U.K. betting duties by pulling its online division out of Isle of Man and heading for the sunny beaches of Antigua and Barbuda. "In the current competitive climate we have been offering tax-free betting to U.K. customers and paying the duty ourselves. Clearly we could not do so indefinitely," William Hill Chief Executive John Brown said.

The government of Poland has been tossing several gambling issues around and Net betting has reportedly been a topic of discussion. Whether interactive gambling makes it to the final legislation, however, is still up in the air. According to MDAssociates, the Commission for Finance of the Polish Parliament has asked the Board of the Chamber of Operators to provide information from other nations' gambling legislation for comparison to their own.

New Stuff -- Stanley Leisure plc recently announced that it will open its up-market Crockfords-casinos.com online casino within the next two weeks. The Dominica-based site will accompany two additional online casinos-- Acropoliscasinos.com and Avaloncasinos.com--purchased by the company in March for £8.1 million. The company also said its Malta-based tax-free sports betting site will launch in August.

Wembley PLC, the world's largest commercial greyhound track operator, has announce that it will launch a greyhound racing website, called "24Dogs.com," that will offer real money wagering. Customers will be able to watch races live online and place wagers using a fixed-odds betting service provided by William Hill. The site, due to go live within two months, will feature commentary, full downloadable race cards a day in advance, a news service, breeding information and an online video and audio library.

Paramount Trading, Inc. announced Tuesday the launching of its new website at www.blackjack.com, a domain which the company purchased for $460,000. The new Flash-based site offers seven versions of blackjack, including Las Vegas and European versions, each with different dealing options. Another unique feature is that players have an opportunity to place side bets, namely a Super 7 side bet for a dollar.

Gaming software developer Boss Media announced this week the opening of its two latest online casinos: Camelot Casino (www.camelotcasino.com) and Prestige Casino (www.prestigecasino.com). Camelot Casino invites Internet gamblers to cross the virtual drawbridge and enter a medieval-style kingdom where they can embark on their quests for riches. Prestige Casino courts gamblers with shimmering marble floors, trickling fountains, and ivy-covered masonry.

During its annual meeting last week, Cryptologic Inc. delivered the first-ever public preview of its newest 4.0 version software. Additionally, shareholders agreed to accept the fiscal 1999 financial statements, the appointment of directors, the re-appointment of KPMG as auditors, and the increasing of the stock option plan to allow up to 15 percent of outstanding common shares to be issued as options.

Makin' Deals -- Boss Media, miles ahead of the pack this year in terms of selling online casino licenses, just announced plans for four new sites. The software for the new Internet casinos will be based on Boss Media's multi-player platform. Three of the casinos will be developed for Cyber Croupier Ltd. and are scheduled for release during late 2000/early 2001. The fourth will be operated by Boss's newest licensee, Playgate Ltd. Boss has sold 27 Internet casinos since it began licensing in 1998. Thirteen of the casinos were sold in 2000.

U.K person-to-person betting site flutter.com has signed a partnership deal with travel site lastminute.com. The travel site will be featured on flutter.com's home page, and will be the sole sponsor of a "last minute flutter" section. Additionally, lastminute.com will promote a co-branded flutter.com version in its weekly email to 1.1 million U.K. users.

It was yet another busy week for increasingly aggressive gaming software developer Online Gaming Systems, Ltd. (OGS). The company announced today that it has entered into an agreement with American Wagering, Inc. (AWI) in which it will provide portable devices for AWI's keno operations in Las Vegas. The terms and conditions of this agreement were not disclosed as per contractual requirements. Online Gaming President & CEO Richard A. Iamunno called the deal "an example of Online Gaming's ability to combine the skills of our Interactive technology group with a successful, traditional casino game."

OGS additionally announced the signing of a letter of intent with ETI Gaming, a division of ETI Inc., in which the two companies will jointly market a lottery solution that OGS claims will integrate online lottery, point of sales, video lottery, management and Internet applications to the worldwide lottery industry.

PlayandWin Inc. this week announced the finalization of its five-year agreement with Autotote Systems Inc., a division of Autotote Corporation, for the license and joint marketing of PlayandWin's pari-mutuel bingo-style game, Racingo(R).

Breakin' Deals -- Gaming Internet Plc of the U.K. has pulled its bid to acquire Australian online bookmaker Consolidated Gaming Corp Ltd. CGC says the decision to kill the $A40 million ($US22.92 million) deal was a result of the Australian federal government's attempt to impose a one-year moratorium on the issuing of interactive gaming licenses. Gaming Internet proposed to offer 26 if its shares and 42 pence for every CGC share, although CGC was reportedly asking for a better offer. CGC is licensed by the Northern Territory to operate a phone and Internet sports betting service.

A Tidbit from Down Under -- My Casino Limited, which recently purchased Vanuatu-based CasinoAustralasia.com, reports that the online casino's handle for the month of May was AUD$22 million--far ahead of the company's projections. "By July, it is projected that the marketing campaigns will lift monthly turnover up to about AUD$30 million to AUD$35 million," Managing Director Gordon McIntosh said. "The company expects to hold around five per cent of turnover as revenue."

New Faces -- E-Vegas.com Inc., a software and casino gaming business based in Costa Rica, announced this week the appointing of Antal (Tony) Markus as president of the company. Markus replaces Ed Gallagher, who resigned as the company's president and director on May 31. The company additionally appointed Larry Olsen to the board of directors as executive vice-president and Allan Serwa as vice president and director, both effective June 1, 2000. Erwin Liem has resigned as a director, but has retained his position as corporate secretary.

Quote Worthy -- "There's no way of regulating (Internet gambling). Banning it is the only way of dealing with it because you can't police it."

--Donald Trump, as quoted by the Newark Star-Ledger.