Nambling Notes - June 29, 2001

Tidbits from the US -- Nevada has just enough time to step back and take a deep breath before entering the next phase in the process of legalizing online gambling. With a new law setting up a regulatory framework for Internet casinos in place, the state Gaming Commission's next task is to create a system of regulations and that process will begin at the end of July. A five-member panel has been charged with the task of developing rules that meet conditions outlined by the legislation. The first two hearings have been set for July 31 and August 1. The other necessary step is determining whether federal law permits online casinos.

U.S. Rep. Bob Goodlatte, R-Va., has indicated for months that he will eventually reintroduce his Internet gambling prohibition bill, but just when he intends to do it has remained a mystery. A spokesperson from his office told IGN that he is currently busy with another piece of legislation, but could introduce a new Net betting bill anytime after Congress reconvenes following its July 4 break.

The Oregon Racing Commission last week approved a wagering hub application developed by Television Games Network. TVG wagers are currently run through a hub operated by NTRA Services; TVG will take over operation of the hub July 1. Bloodhorse.com reports that TVG and NTRA will likely continue their marketing partnership. Officials told the publication that TVG "has applied for the hub license exclusively, and is not in partnership with other entities, such as Churchill Downs Inc. and Magna Entertainment Corp., on the Oregon betting hub."

Tidbits from the UK -- As Australia sets up the parameters for banning Internet gambling and Nevada moves toward regulating it, U.K. policy makers have somewhat quietly been looking into what they will do. For months England's Gambling Review Body has been discussing changes to the country's antiquated gambling laws. Among possible changes is the consideration of regulating online casinos. A representative from the panel told IGN this week that its report will be finished in a matter of days. Upon its completion, the report will be sent to the Department of Culture, Media and Sports. When the report will be published hasn't been determined.

U.K. National Lottery Commission Chairman Lord Terry Burns has reportedly recommended that the upcoming U.K. government review of lottery legislation consider avoiding a monopoly by appointing separate operators for scratchcard and draw games. Doing so, Burns contests, would prevent a repeat of last year's controversy in which Camelot, the lottery's current operator, and Sir Richard Branson's People's Lottery consortium battled for the rights to run the lottery for the next seven years.

Meanwhile, Reuters reports that the Lottery Commission is expected to reveal in a report due out Wednesday that Camelot will come up £5 billion short of its intended £15 billion contribution to good causes.

New Stuff -- The Age reports that Australian online casino operator gamble.com.au, through a deal with a pay television operator in India, intends to roll out a sports wagering service for Indian pay TV subscribers. The company intends to tap into the Indian and Sri Lanken markets by offering wagers on cricket, hockey, English Premier League soccer and additional sports. The joint venture is also expected to participate in pari-mutuel pools. The newspaper also reports that several European and South African casino operators are believed to have approached the gamble.com.au board to propose a capital injection.

World Gaming plc (formally Starnet) announced Wednesday that it has completed implementation of eFalcon, a real-time Internet fraud detection solution from HNC Software Inc. The augmented system is now available to the more than 750 websites powered by World Gaming. "We are committed to providing our customers with the best possible solutions to limit risk and enhance profitability," said Michael Aymong, CEO of World Gaming. "HNC worked with us to implement a solution that would ensure safety and security for the more than 500,000 players who wagered in excess of US$2 billion through our licensees last year." eFalcon, currently used to protect more than 400,000 million payment card accounts worldwide, is an intelligent Internet credit fraud detection and risk management solution designed to lower fraud losses and increase revenue opportunity for online merchants and service providers. The solution uses neural networks, scores and rules to distinguish between legitimate shoppers and fraudulent purchasers.

Tidbits from the Far East -- While policy makers in Hong Kong examine the possibility of legalizing soccer betting, at least one government official says the most important gambling-related matter is figuring out how to effectively ban offshore bookmaking. Deputy Secretary for Home Affairs Betty Fung Ching Suk-yee told HKiMail that offshore bookies are a huge problem and that legislators are struggling with a way to stop them. The publication reports that approximately $20 billion is spent annually on offshore betting, depriving the government of around $2.8 billion in tax revenue. The Hong Kong Jockey Club, which has exclusive rights in Hong Kong to offer gambling services, reports that its turnover has fallen from $92 billion in 1997 to $71.6 billion this year. The decline has been attributed to an increase in illegal offshore gambling.

Legendary Macau gambling kingpin Dr. Stanley Ho is charging through cyberspace, according to Japan Today, "and scoring a huge success with people whose penchant for gambling is legendary--Asians." Ho's US$20 million casino website, www.drho.com, has had 13 million hits from curious visitors and 30,000 account holders since its soft launch in March, with 75 percent of them from Asia, said Peter Kjaer, CEO of the company. Of the remaining 25 percent, 10 percent are from the United States and the rest are from Europe, Australia and New Zealand. "Asians are much more wary about who they put their money with. They don't feel comfortable giving their credit card details on the Internet. . . but with Dr. Ho's name, the Asians are coming," Kjaer said.

The online casino, the front page of which sports a quote from Ho stating that "the games are fair, and the girls are very pretty," features 60 human dealers handling the cards and executing orders from gamblers in real-time. Bettors can try their hands at baccarat, blackjack, poker and roulette beamed live from a large studio in Antigua. Asian gamblers are typically larger bettors, with the average Asian customer betting $370 a month on the site, compared with the $150 per month that most American gamblers spend. The website, Kjaer's brainchild, was bankrolled by his father-in-law Ho, whose Sociedade de Turismo e Diversoes de Macau (STDM) holds monopoly rights to all gaming activities in Macau, including its 10 casinos, horse and dog racing. STDM's 40-year-old license expires at the end of this year and the Macau government is widely expected to give out more franchises. Kjaer is predicting that the site will recoup Ho's $20 million investment within two years of the rollout. He criticized efforts to outlaw Internet gambling, saying, "It's folly to pass a law that is unenforceable. It's like trying to outlaw radio," adding that it would be more sensible for the governments to start regulating -- and taxing -- offshore gambling operators.

Makin' Deals -- betandwin.com has acquired 100 percent of the shares in sports betting operation Simon Bold (Gibraltar) Ltd. for around EUR 2 million in shares and cash. Simon Bold (the company) is the holder of the last of seven betting licenses issued in Gibraltar. The group, founded by Simon Bold (the person), established a telephone betting operation in Gibraltar in December 1999 and set up an Internet betting service there in June 2000. Bold will continue running the company.

Entertainment company ValCom, Inc. has entered into an exclusive agreement with ANteve Television Network of Jakarta, Indonesia. Through the deal, ValCom will license television format rights and produce satellite bingo throughout Indonesia and eight other countries in the region, reaching a potential viewership base in excess of 49.5 million households. ANteve Television Network will begin broadcasting the one-hour interactive game show Sept. 1, 2001. The show will remain as a one-hour, once-a-week program until Oct. 1, 2001, at which point it will be aired as a half-hour program five days a week. The live, interactive show, for the first time in this market, will invite home participants to play along with the chance of winning cash and other prizes.

Online person-to-person betting service Betfair has inked a deal with the Racing Post through which Betfair will be the only one-to-one betting exchange partner on the Racing Post's website. Betfair's service will be available to bettors at www.racingpost.co.uk.

Go Call Inc. has announced the acquisition of established casino and sportsbook Vegas International (www.vegasintl.com) of Costa Rica--Go Call's second acquisition this year. Earlier this month the company purchased Kokobe SA, also a sports betting agency. Go Call recently completed an 18-month restructuring effort that included the spin-off of all remaining non-core related business holdings as well as the arrangement of private placement funding to accelerate the company's schedule of acquisitions. With year-to-date sales volume exceeding US$1.7 million, Vegas International is expected to provide additional profits to Go Call's first and second quarter financials.

Total Entertainment, Inc., an interactive marketing and Internet gaming technology company, announced Wednesday the signing of a contract with www.just4game.com, a substantial network of gaming sites in East and South East Asia, to provide online gaming facilities. The deal will complement Total Entertainment's existing marketing agreements.

A Tidbit from the Down Under -- Australian Independent game developer Next Generation Entertainment (Aust) Pty Limited issued a statement this week emphasizing that the expansion of the company will not be slowed by the recently passed Internet gambling ban in Australia. "Despite what Senator Alston and certain members of the Press would have you believe, Australia is still the 'clever country,' and smart companies such as NextGen already had carefully developed contingency plans to operate outside of Australia well in advance of the government's announcement last May," CEO and founder Tony McAuslan explained. "Although overwhelming odds had been created artificially by the federal government’s short-sightedness, Next Generation Entertainment has managed to overcome these and establish a niche for itself that in any other industry would be lauded as a major coup by a minister for technology." McAuslan says that the company has signed a "lucrative supply" of contracts with both online and offline gambling companies located in Australia, Europe, Canada, the United States and South Africa. He also said that the company, which just completed a third round of funding, is "now executing on its plans to move in to the rapidly expanding wireless gaming and interactive television markets in Europe." The company will seek a public listing in the United Kingdom around this time next year.

A New Face -- Risto Nieminen has been appointed as the new managing director for Oy Veikkaus Ab (the Finnish Lottery). Nieminen, currently the CEO of Finnish Sports Television Ltd., was the communications manager and the communications director of Oy Veikkaus Ab between 1989 and 2000.