Nambling Notes - May 19, 2000

Tidbits from the U.S. -- The Daily Racing Form reported last week that Youbet.com is supporting an amendment to the Internet Gambling Prohibition Act--the Open Access and Equal Opportunity amendment--that would prohibit vendors from offering, or tracks from accepting, exclusivity. Harness Tracks of America, in its daily newsletter called the development "a pure anti-competition measure aimed at Television Games Network" that "threatens the passage of the bill in its present form." If the bill were passed today, it would include an exemption for race wagering.

The sentencing for World Sports Exchange President Jay Cohen, originally scheduled for May 25, has been postponed to June 29 at 10:30 a.m. because of a conflict in the Judge's schedule. Cohen was found guilty in February in a federal court on several counts of violating the Wire Wager Act and one count of conspiracy.

Congressional Quarterly reports that House Commerce Committee Chairman Thomas J. Bliley Jr., R-Va. has asked Speaker J. Dennis Hastert, R-Ill., to give his panel jurisdiction over Rep. Bob Goodlatte's Internet Gambling Prohibition Bill. Bliley's committee argues that the bill would impose a mandate on ISPs to enforce it. Bliley and Judiciary Committee Chairman Henry J. Hyde, R-Ill., have been battling for a while over which committee should handle legislation for regulating business activity on the Internet. Meanwhile, the Judiciary Committee, which approved the bill by a 21-8 vote on April 6, is scheduled to release a report on the bill today.

Massachusetts Racing Commission Chairman Robert Hutchinson, a member of the Governor's select panel to fix racing in the state, expects a plan to be drafted by next week that would clear the way for telephone wagering in that state. According to the Boston Globe, the panel has kicked around the idea of an account wagering bill that would also legalized Internet transactions.

Makin' Deals -- TrackPower, Inc. announced last week that it has entered into non-exclusive agreements to broadcast thoroughbred racing from Suffolk Downs, Sportsman's Park, Thistledown, River Downs and harness racing from Michigan's Hazel Park. The tracks will be included in the interactive race wagering service provider's planned fully integrated broadcast, interactive and phone wagering service. Vice President and GM Graham Simmonds says the company will continue to focus on the acquisition of both North American and international racing content.

Asian Star Development, Inc. and Chinapro Technology Limited have entered into an agreement in which Asian Star will acquire a 30 percent of the total authorized and outstanding shares of IBT Asia Pte. Ltd., a software developer currently owned solely by Chinapro, with an option gain a controlling interest by acquiring an additional 21 percent. Asian Star, a Nevada corporation with its principal offices in Hong Kong, broke into the interactive gaming business last year when it formed a partnership with VentureTech Inc. to market and develop online casinos.

Enic, the British entertainment, sports and media group, has strengthened its position as a heavyweight in the interactive wagering industry by acquiring Internet bookmaker ukbetting.com for £500,000 ($749,000). According to FT.com, ukbetting.com has more than 3,400 customer accounts and generated revenues between January and August 1999. Enic came onto the Net betting seen last year when it purchased a 25.1 percent interest in Victor Chandler's Internet bookmaking business.

The Minnesota State Lottery has chosen MDI Entertainment, a company with intentions of eventually operating an Internet lottery through its ownership of The Lottery Channel, to provide licensed lottery games and promotions designed to increase sales of instant "scratch-off" lottery tickets in the state.

Online Gaming Systems Ltd. has entered into an agreement with Sun International to provide Play-for-Fun Internet gaming software for the upcoming launch of the Sun's Bahamas-based Atlantis Resort website. The new site, www.AtlantisResort.com will utilize Online Gaming's Internet Casino Extension (ICE) software, providing a full suite of Play-for-Fun casino games for Atlantis website visitors. Sun plans to introduce the expanded site for Atlantis in July 2000. Financial terms of the license were not disclosed.

Oberthur Card Systems, which recently announced the development of a smart card payment system for the Hong Kong Jockey Club's mobile betting service, has acquired SmartCards International. The acquisition brings a converging of specialized smart card skill sets to deliver commercial, user-friendly and innovative software interface solutions to the smart card marketplace. "In acquiring SmartCards International, we have invested in the best technological expertise available in this market, ensuring Oberthur will be `writing the book' on card management," said Thomas Savare, chief operating officer for Oberthur Card Systems.

Tidbits from the U.K. -- U.K.-based one-to-one online betting service, Flutter.com reports that it has secured £21.8 million of funding, co-led by Chase Episode 1 and UBS Capital, in its second round. The company didn't reveal the proportion of funds coming from each source. Most of the money will be spent on marketing.

Ladbrokes, England's biggest bookmaker, has formed a co-branding multi-platform partnership with Teamtalk.com, a popular U.K. online sports service, through which Ladbrokes will supply betting odds for the Teamtalk site and Teamtalk will provide content for Ladbrokes. As a result, Ladbrokes bettors looking for content will be linked Teamtalk.com and Teamtalk visitors interested in wagering will be linked to the Ladbrokes site at bet.co.uk. Teamtalk will also supply content to Ladbrokes' interactive TV betting product, Scorecast. Ladbrokes launched its online betting service February 14 and is reportedly receiving over half a million hits a day. Teamtalk, meanwhile, had over 870,000 unique visitors in March.

New Stuff -- Gaming Internet Plc, a British online gambling and games company, this week officially launched its SportsMAD.com series of websites where visitors can play football, cricket, golf and grand prix. More games will be added soon. The group signed a co-branding deal with Sportinbet.com in March.

Adding merit to the belief that the future of interactive lotteries is in wireless application protocol (WAP) devises, GroupLotto, Inc., a subsidiary of Quintel Communications, Inc., has made its free online lottery, GroupLotto.com, available to Web-enabled cellular phone users. GroupLotto.com currently averages almost 100,000 plays per day and offers weekday prizes of up to $10 million per drawing.

Isle of Man-based online bookmarker Betinternet.com has added live video streaming of premier horseracing from Down Patrick Racecourse in Ireland. "We view this as an a opportunity to gauge global interest in an Irish Product," Chairman and Managing Director Vincent Caldwell said. The service starts tonight. The company additionally announced the hiring of Sean Graham and Pat Flanagan, a former manager for Ladbrokes.

Indiqu.com Inc., a provider of original and relevant, wireless-ready content for mobile devices, is currently working with a number of partner companies to offer mobile betting services wherever it's legal. The first offering will most likely be fixed-odds betting, but CEO Jim Newcomb indicated that casino games may eventually be added to the mix.

Online gaming and entertainment developer Zabadoo.com has released a new Internet lottery game, "Spaceman," that gives players the chance to win cash prizes, with a 95 percent pay-out, of up to $16,000. The new game, under the PLUSLotto brand, features an alien space traveler that players direct around a newly discovered planet. Craters on the surface light up as they are passed and dispense a sum of cash when they're clicked. The player must match three figures out of six to win that amount. The new game can be played at www.zabadoo.com.

Azul Electrico S.A. of San Jose, Costa Rica, a licensee of dot com Entertainment Group, Inc., has launched the Internet's newest pay-for-play bingo site at www.bingopalace.com. dot com's license agreement with Azul provides for the delivery of its bingo technology in consideration for an up-front license fee and a royalty payment which extends over the life of the license agreement.

A Tidbit from Oz -- The Tasmanian Gambling Commission recently released a report saying that Australian gamblers lost US$7.2 billion last year, an 8.6 percent increase from last year's losses. Whether it's warranted or not, the report will fit nicely into the collection of ammunition reserved by the federal government for stunting the growth of Internet gambling Down Under.

This Week in Cyber Law -- Representatives from eight of the world's leading industrialized states, "The Group of Eight" (G8), spent the earlier half of this week at a cybercrime conference in Paris trying to develop an international approach toward cracking down on virus writers, software pirates and hackers and preventing cyber attacks such as the recent notoriously destructive "I Love You" virus. The group won't make any formal announcements until the G8 summit in Okinawa, Japan in July.

Promotional Stuff -- When you flip on the tube to watch the Trans-Atlantic Rowing Race in October of 2001 (did you mark you're calendar yet?), take an especially close look at Team U.S.A.'s boat and you'll notice that it has an "F2Network.com sign" on it. The F2 Network is the new name for First Entertainment Inc. (pending shareholder approval), and the company has signed a sponsorship deal with the U.S. team. The race, which will leave Tenerife in the Canary Islands in October 2001 and finish in Barbados approximately 55 days later, involves a fleet of 50 two-person, sea-worthy rowing boats from around the world competing across the 3,000-mile passage. First Entertainment is a multi-media Internet entertainment company with divisions or subsidiaries in the areas of radio broadcasting, comedy clubs, and Internet gaming, as well as other Internet related activities.

What Others Are Saying -- The list of special interest groups irked by legislators pushing for the prohibition of Internet gambling has grown mightily for the past three years, but the one group that policy makers have carefully avoided crossing has been the casino industry. Thanks to the recently introduced Internet Gambling Funding Prohibition Act, that may no longer be true. An article in the Las Vegas Review-Journal points out that one of the bill's sponsors, Rep. John LaFalce, isn't in good standing with the casino biz. Writes Tony Batt, "Although the mainstream gaming industry favors the prohibition of Internet gambling, casinos are wary of any measure sponsored by LaFalce. Besides leading a 1994 hearing that eventually led to the creation of a federal commission to study the gaming industry for two years, LaFalce is sponsoring another bill that would ban automated teller machines from casinos."

Quote Worthy -- "Given the growth of this industry, I believe it's only a matter of time before we see a bill. ... We realize Internet gaming is here, and it's here to stay."

--Nevada Gaming Commission Chairman Brian Sandoval, commenting during his presentation at the Global Interactive Gaming Summit & Expo on the likeliness of Nevada opting to regulate Internet gaming through legislation.