Nambling Notes - Mar 9, 2001

Tidbits from Down Under -- Australian Arts Minister Peter McGauran, a supporter of the country's moratorium on Internet gambling, is on the hot seat for a perceived conflict of interest through his financial interest in a hotel that's home to 70 poker machines. The opposition says that his roll as an owner conflicted with his duty as the minister who guided the moratorium bill through the House of Representatives because limiting the expansion of Net betting would presumably benefit holders of poker machine licenses. Prime Minister John Howard, however maintains that McGauran met all of his disclosure responsibilities and did not participate in the cabinet meeting during which the moratorium was endorsed. "The minister in piloting the legislation through the House was merely publicly advocating government policy which, as a member of the government, he was bound to do," Howard said. "Any suggestion that he has behaved improperly I absolutely reject."

Meanwhile, ninemsn reports that Labor spokeswoman Kate Lundy was also accused this week of failing to declare a potential conflict of interest over poker machines during an inquiry into online gaming. In response to the opposition's attack on McGauran, Communications Minister Richard Alston pointed out that Lundy and former frontbencher Daryl Melham were or had been directors of clubs that operated poker machines and donated money to the Labor Party. Alston accused Lundy of breaking disclosure rules by not informing fellow members of the Senate IT committee that she held such a position. Lundy pointed out, however, that unlike McGauran, who earned $190,000 a year through his hotel ownership, she has received no financial benefit. Further, she added, "Additionally, Labor's stance against the Online Gambling Moratorium bill would arguably have reduced poker machine takings."

What do the people think of the squabbling? The latest Bulletin-Morgan poll, taken shortly after the McGauran fiasco hit the headlines, shows that Coalition support is at 30 percent, the lowest level for the conservatives since the party was founded in 1944. Labor, on the other hand, has seen its approval rating rise to a record-setting 63 percent.

Progress on the moratorium has been held up of late and may remain at a standstill until after the March 17 elections.

Tidbits from the US -- For now it looks like easy come, easy go for a new law that would bring legalized Internet betting on horse races to Arkansas. A bill that would grant Oaklawn Park a reduction in its pari-mutuel excise tax originally had language that would make it legal for Oaklawn and Southland Greyhound Park to operate account wagering services, but the account wagering amendments have been stricken. Even minus the amendment the bill failed to pass.

State officials in Ohio have spent a considerable amount of time recently debating ways to boost the state's suffering gambling revenues, but their efforts are being heavily criticized by a state-based public policy organization. The legislature is currently looking at plans for the legalization of slot machines at Ohio's seven race tracks as well as the lottery's inclusion of Powerball, proposals that Ohio Roundtable President David Zanotti calls "a step in the wrong direction." He added, "They (the policies) are both based on the flawed economics of gambling. Since 1973 Ohioans have been sold the lie that gambling is a valid tool for state funding. Now our General Assembly is hooked on the idea. It is time for intervention, time to end the denial, time to admit the lottery, slot machines, and all the rest are an economic scam." Among discussions for revitalizing the state's lottery was an inquiry into the feasibility of the lottery selling tickets over the Internet. The Ohio Lottery Profit Review Commission released a report looking into the matter in March 2000, but hasn't indicated whether it will pursue it further.

A Tidbit from South Africa -- South Africa National Gambling Board CEO Sfiso Buthelezi told I-Net Bridge this week that Internet gambling regulations will likely be in place in South Africa by the end of the year. "We have been working on this legislation for over a year already and we anticipate that the regulations will be in place by the end of the year," Buthelezi said. "The train is already well in motion." He added, "The name of the successful tender organization will be made public next week." Buthelezi said that the legislation being drafted will include a number of consumer protection measures, including strict age limitations and a self-exclusion clause. He also mentioned that taxation policy is still being formulated.

Tidbits from the Far East -- As reported by the South China Post, the Hong Kong Financial Secretary has announced that soccer gambling will likely be legalized in the island nation. The move comes as a bit of a surprise in the midst of efforts to ban offshore gambling.

IGN reported in March 2000 that South Korea's government has launched an effort to block its citizens' access to online gaming sites. According to a Yahoo! article published today, those who violate the new policy by either accepting or placing a bet over the Internet could receive fines of up to $177,000 (€195,000) and up to three years in prison.

The tight reign of the Chinese Government is showing signs of getting its grip on the online gaming industry. Reports out of Australia this week have the Chinese Government toying with the idea of banning access to foreign gaming sites. It is believed that the government is trying to keep its residents from accessing sites outside its borders, such as those hosted in Australia. One of Australia’s leading online sportsbooks, Centrebet, told the Australian Broadcasting Corporation that the move would be futile, since the vastness of the Web will make it easy for the users to access sites somewhere else.

Tidbits from the UK -- U.K. bookmakers might be celebrating the British Treasury's decision to kill the betting duty, but at least one offshore sportsbook is content with staying put. Victor Chandler says that Victor Chandler International one of the first British bookmaking operations to go offshore in an effort to avoid the duty, will not accept the Chancellor's proposed bargain in which British bookmakers will be free of the 9 percent tax if they agree to close up shop offshore and come home. As reported in Tax-News.com, Chandler says that the proposed 15 percent tax equates to a 3 percent betting duty, meaning that it would be financially advantageous to remain in Gibraltar.

Tax-news also reports that spread betting firms are unhappy with the new tax structure for U.K. bookmaking. Spread betting company IG Index says it would end up paying more under the new system. The company's chairman, Stuart Wheeler, says the firm plans to petition the Chancellor to reconsider his plans.

Makin' Deals -- Online P2P betting service Flutter.com has signed Covigo, Inc. a software company that helps businesses adapt to the changing wireless world, to facilitate mobile betting for Flutter.com customers. The Covigo Platform^TM will enable Flutter's clients to place bets from any wireless device, anywhere, anytime. The highly scalable platform will also provide bettors with the ability to check odds using wireless devices such as PDAs and mobile phones. Flutter.com's wireless site was built in a matter of days and deployed with full transactional capabilities within weeks.

U.S.-based VentureTech, Inc. announced yesterday that it has sold its wholly owned subsidiary, EuroAsian E-Casinos International, Ltd. of Antigua, to Nexus Marketing Inc., a British Columbia company, for US$350,000, less accounts payable and accrued liabilities of approximately $160,000. E-Casinos currently operates Asia Casino (www.asiacasino.com), an online gambling casino and (www.ecasino.com) a gambling portal. Under the terms of the agreement, VentureTech will receive the $190,000 balance based on a percentage of gross revenues generated by EuroAsian. The company will transfer the domain names when full payment has been made. VentureTech has shifted its focus to interactive non-gambling gaming.

Bookmaking company Sporting Index (NSI) announced this week that it and information technology company TranXactive are forming a joint venture company, called Innovate, that will focus on gaming technology as well as project management and the hosting and support of Internet gaming businesses. The support services will include a multilingual call center and the administration of gaming companies. Under Innovate's business plan, operators will pay Innovate transactional fees based on software usage, hosting and support fees. Much of the revenue is expected to come from offshore relationships. TranXactive, a development partner, will develop voice-intelligent telephone betting centers as well as a number of wireless applications to be used for online gambling. Additionally, offshore company Churchill Finance Services, acquired last year by NSI, will be restructured and positioned as the holding vehicle for NSI's offshore interests. NSI's name will change to NSI International.

Canal+ Technologies, Vivendi Universal and Sun Microsystems have formed a strategic alliance to develop Java technology for interactive TV systems worldwide. Sun will make an undisclosed investment in Canal+ Technologies, which has bought a license for Sun's PersonalJava technology. The PersonalJava technology will be integrated with the Canal+ Mediahighway interactive TV platform. Of significance to the I-gaming industry, Vivendi is the parent company to online gaming group Virtual Vegas.

Newgold Inc. subsidiary PlayLink, Inc., a third-party developer and provider of online games, announced this week that it will power DrHo.com, Asian gambling mogul Stanley Ho's new online casino, with a complete games community solution known as "Dr. Ho's Games." The agreement provides that PlayLink's entire collection of free word, action, card, board, strategy and casino games will be featured and accessible off the Dr. Ho's home page. PlayLink has created a customized games community for DrHo.com whereby it handles all game traffic and software operations updates.

Isle of Man-based Global Sports Corporation Ltd. (GSC) announced that it has finalized its purchase of the Internet and telephone bookmaker and casino operations GoldMedalSports.com and 7palms.com. GSC CEO Herd Rogers called the acquisition "a very exciting time for our company." Rogers says the purchase is part of the company's globalization efforts. The company plans to let both of the purchased sites to maintain their names.

Questico UK, Europe's self-proclaimed "first Internet exchange for questions and answers," has joined forces with Internet bookmakers NetBetSports.com and soccer site FullTimeWhistle.com to provide sports and betting experts' live answers and advice over the telephone. Questico's skilled tipsters will offer users advice and information to NetBetSports.com and FullTimeWhistle.com users in one-to-one phone consultations.

Gaming software developer dot com Entertainment Group, Inc., through its dot com (Antigua) Ltd. subsidiary, announced March 6 that it has entered into a license agreement to deliver and install a complete Internet casino system for CasinoLease of the Netherlands Antilles. As outlined by the agreement, dot com will deliver and install its software at CasinoLease's Internet hosting facilities in late March or early April. In addition to the licensing of dot com's Internet casino technology, CasinoLease has the option of purchasing dot com's Internet bingo technology at an established purchase price.

A Tidbit from the Channel -- Operating a licensed online casino from the Isle of Man may soon be a reality. The On-line Gambling Regulation Bill received its second reading and underwent the clauses stage in Tuesday's Legislative Council meeting. Officials expect the bill to be sent for royal assent by the end of the month.

New Stuff -- Play121.com has expanded its sports betting service to include horseracing under its person-to-person fixed betting system. Play 121 Director Simon Capreis said, "This really is as close as you can expect to get to the thrill of U.S. betting without flying to the track. It really is about time that this opportunity is available in the U.K. American racing is every bit as thrilling as the British sport." American bettors can participate as well, but not for real money.

Online gambling software licensor Poker.com, Inc. announced the launching of two of its licensees' online betting sites. LDDR Holdings Ltd. has launched www.davescasino.com, while Atherton Investments has launched www.1livesportscasino.com. In accordance with the agreements, Poker.com will provide LDDR Holdings Ltd. and Atherton Investments with a full Internet casino, sportsbook, and bingo interface.

Tales of Success -- The folding of a few person-to-person betting sites has some experts suggesting that the P2P model is not profitable. Many argue that the model is dependent on high volume and that high volume isn't achievable, but if that's the case, Coral Eurobet's Play2Match.com might have something to say about it. The P2P betting firm, a division of Great Britain's Coral betting shop company, recently reported that it eclipsed its own record for volume by taking a whopping 11,067 bets on a Manchester United/Arsenal football match.

Jackpot Madness, Microgaming's highly successful jackpot network portal, reached another milestone this week by exceeded a record-breaking $23 million in total jackpot pay-outs. The portal features five progressive jackpot games, the oldest and most popular being Cash Splash, which was introduced in October 1998. The game's popularity has boomed in the last two years and is now available at more than 60 online casinos. Two additional progressive slot games, WowPot and LotsaLoot, were added to the portal last April, followed soon thereafter by Supajax, a unique video poker progressive, and Fiesta, a popular $0.25 progressive slot. Over $713,500 has been paid out to 33 winners in March already. The landmark win that pushed Jackpot Madness over the $23 million mark was a $126,346.20 jackpot won March 3 on Cash Splash by a player at Caribbean Cyber Online Casino.

Pure Silliness -- While British bookmakers anxiously awaited Chancellor Gordon Brown's word on betting tax policy, spread betting firm City Index was taking bets on Brown's speech. Wagers available included the length of the speech, how many sips of water he would take, how many times he would use the word "prudent.

Not to be outdone, online bookmaking firm Blue Square announced this week that it's accepting wagers on hamster races until horse racing in the United Kingdom is back to par. "We've been running hamsters in these little dragsters," company spokesperson Ed Pownall told the Associated Press. "You put an exercise wheel in the middle of a 10-inch-long dragster. As they run in the wheel it moves the thing forward." The races consist of six hamsters running along a 30-foot-track. The fastest time so far is 38 seconds.

New Faces -- Six months after the resignation of CEO Meldon Ellis, Starnet Communications International Inc. announced this week that it has chosen his replacement. The new CEO, yet to be named, will take over March 19. Chairman Fred Hazell has filled the role of CEO since Ellis stepped in September. The new CEO will be officially introduced during a shareholders meeting March 20.

Global Entertainment Holdings/Equities Inc. announced yesterday the election of Thomas L. Glaza to its board of directors. In an unrelated matter, the resignation of the president of Prevail Online, Inc. (a wholly owned subsidiary of Global), Ron Pereira, was tendered and accepted on December 28, 2000. Pereira will remain, however, as a marketing and creative consultant to the company. In the interim period of finding a replacement for Pereira, Donald J. Lisa, president and CEO of Global Entertainment, was appointed acting president of Prevail.