Nambling Notes - May 25, 2001

Makin' Deals -- Austrian interactive gaming company betandwin.com announced this week its expansion into Italy through a joint venture with Italy-based Horizon S.r.l. The venture, betandwin Italia S.p.A, has signed a letter of intent to take over an existing betting business along with its stationary betting license. The company will launch an Italy-based online sportsbook, pursuant to the formalization of a May 2 decree by the Italian Finance Minister that paves the way to legalizing online sports betting in Italy. The Italian betting license will enable betandwin Italia to offer sport betting in Italy nationwide via the telephone and on the Internet.

betandwin.com also announced this week the signing of a letter of intent to take over a betting company based in Gibraltar. The closing of the deal awaits the completion of customary due diligence procedures and the transfer of the unnamed company's betting license.

Australian e-commerce security provider eSec Limited has announced the formation of a strategic alliance with Internet transaction insurance provider SafeTrade Limited. Under the terms of the deal, SafeTrade will recommend eSec's managed security and secure payment gateway services to its customers, while eSec will promote SafeTrade's insurance products to its e-commerce merchants.

Scientific Games Corporation announced yesterday that it has been chosen by Loteria Electronica Internacional Dominicana, S.A. (LEIDSA) to provide a nationally televised online lottery system and service for SUPER BINGO^TM. The five-year contract, which started May 15, 2001, contains five one-year renewal options. Based on estimated ticket sales, the contract has a potential value of approximately $12.5 million over the initial term of five years. SUPER BINGO^TM operations will commence in September 2001. The new televised online lottery system integrates iTV Games' PowerTrak^TM game generator software with Autotote Systems' (a Scientific Games subsidiary) existing central online lottery system.

Tidbits from the UK -- BBC News reported Wednesday that ticket sales for the U.K. National Lottery have fallen during the last six months below £5 billion for the first time in four years. The lottery's operator, Camelot, reported returns of £4.98 billion in the year to March 31--a 2.1 percent decrease from the previous year. Camelot says that plans for a "large investment" as well as an aggressive marketing campaign should reverse the trend. The company admits, however, that declining ticket sales could keep it from delivering the £15 billion for good causes that it promised when applying for and receiving the license to operate the lottery for seven more years.

Go Racing's recently signed £291 million media rights deal with Britain's major race courses isn't kosher with British bookmaker William Hill. David Harding, William Hill's chief executive, told the Telegraph that the deal is flawed in critical areas and that its shortcomings could do it in. Specifically, Harding questions Go Racing's belief that it will attract 23 percent of all U.K. betting on horseracing--roughly the same size as Ladbrokes' share--and criticized Go Racing's concentration on pool betting instead of fixed-odds wagering. "The UK punter doesn't want pari-mutuel betting," he explained. "If he did, he would have demonstrated it as the chance has been there for ever. The Tote takes less than 5 percent at the moment." He also says that bettors, as a whole, will not want to switch from telephone betting to iTV betting, as suggested by Go Racing. "We have consistently said we do not believe the £100 punter will bet in front of his family via the television," he said. "Gambling is a private activity." Finally, he questioned the consortium's decision to use Gibraltar as a betting base despite the removal of England's betting duty. "There is no legal reason why they cannot run it from offshore," he said, "but it flies in the face of the spirit and intent of what the government is trying to do."

New Stuff -- Coral Eurobet, the interactive division of the U.K.'s Coral bookmaking firm has thrown its hat into the mobile betting ring. A new service, delivered through a partnership with wireless entertainment company 12Snap, will enable registered users to place bets via interactive voice recognition systems (IVR) and then receive confirmation by SMS. Users will also receive text alerts about sporting events of their choice. 12snap hopes to have 40,000 customers for the new service by December.

Sports betting firm Blue Square is diversifying against the grain, so to speak. The Internet and iTV betting company announced this week that it will launch a phone wagering service to coincide with the introduction of Great Britain's new betting tax policy. Chief Executive Martin Belsham says the new service will begin in autumn.

This Is London reports that spread betting firm Cantor Index, through its purchase of the Hollywood Stock Exchange, has extended its betting menu to include wagers on movies and music. Customers can now make real-money spread bets on the success of films, actors and albums.

Total Entertainment, Inc. announced Tuesday the launching of its Version 4.5 gaming software at www.theonlinecasino.com, the company's flagship Internet casino. "Version 4.5 incorporates the latest in Internet design, functionality and marketing, into a one end-all product catered to the end user," Chief Internet Architect Brian T. Lauda said. "The new site has been specifically created with the end user in mind. By incorporating the next generation of Internet gaming standards into our site, emphasizing the quality of visual appearance and ease of use."

Tidbits from South Africa -- South Africa is expected to legalize Internet gambling in the near future, but until legislation is passed, placing wagers over the Internet is off limits to South Africans. The South African Reserve Bank recently warned South Africans that gambling at offshore sites is a violation of foreign exchange laws, a position that's been backed by the National Gambling Board. Sfiso Buthelezi, the Board's CEO, feels that "South Africans will be doing themselves a favor by abstaining from Internet gambling at the moment to avoid being taken for a ride by dubious sites." According to a spokesperson for the Board, the regulatory framework is expected to be ready around August of this year.

The Daily Mail & Guardian, reports that the National Gambling Board of South Africa has commissioned DGS of Australia to draft the framework regulating Internet gaming. The Board will pay the firm R900,000.

Tidbits from the US -- Greyhound advocates formally announced Wednesday the formation of GREY2K USA, the first organization in United States history devoted to putting a stop to greyhound racing through political means. The formation of the organization was a response to the narrow loss of a Massachusetts ballot question that would have ended greyhound racing in that state. Question #3, which appeared on the November 7, 2000 ballot, lost 51% - 49%. It was the first attempt in United States history to end dog racing through the initiative process. The group has already launched a number of advocacy campaigns, including a legal challenge of a Florida slot machine initiative being pushed by racetrack owners and a national educational advertising campaign in the Portland Oregonian.

CNN.com visitors have made their voices heard, and what they've said might just bring a tear to the eyes a few congressmen who've been down and out. The site featured Internet gambling in its "Quickvote" section and readers came out in droves against it. CNN asked, "Do you think gambling should be allowed over the Internet?" At the time IGN checked in, 66 percent of the 57,117 respondents said no.

A Tidbit from Oz -- According to an Australian IT article, the New South Wales TAB is interested in providing interactive betting via free and pay TV services and will oppose the federal government's proposed Internet gambling laws. TAB Chief Executive Warren Wilson says the company is looking to enhance its Sky Racing pay TV channel by integrating a betting service once pay TV services are digitized to enable interactivity. Wilson says that the plans will be halted, however, if an Internet gambling ban is passed. The company wants to launch a free-to-air wagering service as well.

Success Story of the Week -- Online gaming systems provider Poker.com, Inc. announced yesterday that its licensee, Antico Holdings S.A., has dealt its millionth hand at www.poker.com. Antico Holdings implemented the 2nd generation poker software at the beginning of 2001and has now dealt more than 1 million hands.

A New Face -- Internet gambling software supplier Starnet Communications International Inc. today announced that Michael Aymong has been named president and CEO of the company. The company called Aymong's appointment "the first in a number of steps to be taken by the company as part of its reorganization plans." Prior to joining Starnet, Aymong served as executive vice president of marketing, sales and customer service at GT Group Telecom.