Nambling Notes - Sep 15, 2000

Tidbits from the US -- As time runs out on Rep. Bob Goodlatte's drive to pass the Internet Gambling Prohibition Act, it should be very interesting to see how he and Senator Kyl approach climbing the mountain. They haven't revealed their strategy yet, but it's clear that it doesn't entail the concealing of desperation. Nor does it entail discretion when it comes to ruffling feathers in the House. The two congressmen appeared together this week on Dr. James Dobson's "Focus on the Family" radio show, pleading with listeners to remind their congressman how terrible online gambling is and how important the Goodlatte/Kyl bill is. Goodlatte complained that Republican leadership is blocking the bill because their pockets are being lined by gambling companies, particularly the lottery companies, who stand to lose tens of millions of dollars should the bill pass. Specifically, they named Reps. David Dreier (Calif.), Tom DeLay (Tex.), Tom Davis (Virg.) and Chris Cox (Calif.) as major disruptions to the bill's passage. Dobson asked listeners to make "emergency, quick" phone calls to the four congressmen. Kyl once again iterated the importance of getting the bill passed before the session ends. "If we can't get this done this session," Kyl asserted, "the amount of money involved in the gambling interest. . . It is going to be so significant that I fear we will never have a chance to get this passed in the future."

The United States Congress is pushing hard to give American bettors yet another reason to patronize Internet betting companies. Against all odds, legislation to outlaw betting on college sports refuses to die. This week, it won approval from the House Judiciary Committee, which passed it by 19-9 vote. The Senate Commerce Committee approved a similar bill in April.

Makin' Deals -- Starnet Communications International Inc. announced this week that its World Gaming Services subsidiary has entered into strategic partnerships with Bloodstock Research Information Systems and TrackData Systems Corporation and has signed a simulcast wagering agreement with Dania Jai-Alai. Starnet says the agreements will enhance pari-mutuel offerings on its WorldRacetracks.com site (www.worldracetracks.com) by making handicapping and historical performance information available to users. The company additionally announced that World Gaming Services Inc. has re-signed Bally's at Ocean Downs, Tucson Greyhound Park and Phoenix Greyhound Park to simulcast wagering agreements. Each partner track's racing product will be web-cast and wagering will commence with the new product's launch.

eLottery, Inc., a subsidiary of eLOT, Inc., has continued its aggressive pursuit of the "future" U.S. Internet lottery market by becoming the provider of Internet marketing technology for the Hoosier (Indiana) Lottery "Very Important Players" club. eLottery will receive transaction based fees for the service. The company's IMARCS (Internet Marketing, Analysis, Research and Communications System) database marketing solution is the foundation for the VIP club that will enable the Hoosier Lottery to attract, register and communicate with lottery players through the Internet. The Hoosier Lottery will be able to deliver one-to-one personalized e-mail marketing messages. Lottery players can register for the VIP club on the Hoosier Lottery's updated web site located at www.hoosierlottery.com and can elect to receive game information, newsletters, surveys and more.

eLOT also announced the hiring of Alex S. Burstein as a consultant. Burstein, previously the director of software and systems development for GTECH Corporation and a consultant to Camelot, has over 15 years' experience in the lottery industry and will be responsible for accelerating the company's international lottery ticket web retailing strategy.

Wiremix Media Inc., a digital business solutions provider, announced that it has been awarded the contract to market Takara Casino (www.takaracasino.com), a full service online Japanese casino, featuring Pachinko, table and machine games. The marketing will be executed by the company's Wiremix Japan division.

Software developer dot com Entertainment Group, Inc. announced that it has entered into a license agreement with FHB Holdings Inc. of the Marshall Islands in which dot com will license and deliver a complete Internet bingo system for use by FHB as a companion product to its Internet casino operations. For its development and license of its award-winning bingo technology, dot com will receive an up-front license fee and ongoing royalty payments from FHB, which will extend over the life of the license agreement and will continue as long as the software is used by FHB. FHB plans to operate both an Internet casino and bingo hall using dot com's proprietary technology. The parties are finalizing the license agreement for the casino software and support services which will launch sometime in early 2001. FHB will supply its own e-commerce, banking, marketing and related operational services, with dot com providing technical support and related maintenance throughout the term of the license agreement. The FHB deal is one of several license agreements which dot com expects to consummate over the next few months. The location of the FHB site was not announced.

Madge.web^TM, a global provider of rich content applications and managed network services and a subsidiary of Madge Networks N.V., has been selected by SNAI, a provider of global betting solutions, to support its U.K. Internet-based services. Madge.web is enabling SNAI to grow its online business through the provision of a range of rich content delivery services, including managed hosting. Madge.web will support and manage SNAI's online content and operations to ensure that mission-critical requirements are met. Madge.web says the Madge.web Overnet, which bypasses the bottlenecks of the public Internet, ensures that customers using www.Snaisport.com for online betting will find the site quick, easy-to-access and available 24 hours a day, seven days a week. Customers can place online sporting bets through the website and manage their accounts while having access to up-to-the-minute sporting news. SNAI operates the U.K.-based website www.snaisport.com as a springboard for development of the British market while a joint-venture with Trigem, a South Korean computer company, is planned for a venture in the Asian gaming market.

New Stuff -- e-Success Incorporated this week introduced the Ticket Internal Control System (ICS) for Lotteries, a technology that monitors online lottery system, giving lotteries the ability to independently trap and reconcile any discrepancies with their online lottery systems as they occur. The first lottery to utilize the instant ticket module will be the South Africa Lottery operated by the Uthingo consortium. e-Success also announced that its Integrity online ICS, a system that provides a means for auditing every transaction processed in real time, successfully went live at the Vermont and New Hampshire State lotteries in early July with the Autotote Lottery Corporation online system, and at the Idaho Lottery in June with GTECH's system. Furthermore, the Integrity system successfully monitored the introduction of the new Rolldown game for the Idaho, Montana and New Hampshire Lotteries in early September.

Go Cash Inc., a subsidiary of Go Call Inc. has announced the implementation of processing for Lucky Charm (www.gowager.com), a site using updated sportsbook software that will be used at most of Go Cash's future sportsbook sites. Lucky Charm is the second sportsbook site to enter an agreement with Go Cash. Go Call CEO James W. Palmer says the site is the first of many new and updated sites to be announced soon. "Very soon you will see the customers will be able to play online casino and sportsbook games almost seamlessly and we will be processing more transactions than ever," Palmer said. "We will also be adding a capability to link between our sites directly from the casino to www.goscratchtickets.com and others to be announced soon."

Toronto-based gaming software supplier CryptoLogic Inc. announced that its Australian licensee, eBet Limited, has gone live with its Internet casino, one month ahead of schedule. Available at www.casinoebet.com, virtual casino games expand eBet's growing range of online gaming services offered to their customers in regulated gaming markets around the world. "eBet fits perfectly into CryptoLogic's strategy of licensing its technology to world-leading gaming organizations in the international gaming industry," said Andrew Rivkin, CryptoLogic's president and CEO. "eBet's extensive experience and brand strength, coupled with CryptoLogic's state-of-the-art gaming software position this new service for success."

Virtual Gaming Enterprises, Inc., last week announced that opening of its corporate website at www.vgam-ent.com. The company operates a family of 18 virtual casinos and is a master gaming licensee for the Commonwealth of Dominica.

Promotional Stuff -- Total Entertainment Inc., a leading global interactive marketing and Internet gaming technology company, this week announced a comprehensive $20 million multi-media advertising campaign to launch its new company website at www.onlinesportsbook.com and existing website www.theonlinecasino.com. The company has declared the move "the largest ever multi-media campaign in the Internet gaming industry." The campaign will begin October 1, 2000. The print portion of the campaign will include, publications such as Continental Airlines In-Flight Magazine, TWA In-Flight Magazine, Playbill, Ocean Drive Magazine and Ego Trip Magazine. The campaign will include strategically located billboards, including a 6, 000 square foot illuminated billboard in New York City at the entrance to the Lincoln Tunnel. The broadcast portion of the campaign will include television and radio in strategic markets. The company also announced that it will launch www.casinomaven.com, a gaming portal offering gaming information, crossword puzzles, travel, sports information and an Internet based customer loyalty "comp" program, next month.

Ten online casinos powered by GamblingSoftware.com's software are participating in a unique cooperative promotion that will award nearly $25,000 in cash and prizes in a free bonus sweepstakes. CasinoContest is a free sweepstakes that gives online casino players unlimited chances to win a Chrysler PT Cruiser or one of 12 cash prizes. Players can enter as many times as they wish, increasing their chances to win a Chrysler PT Cruiser, $1,000 cash, $500 cash or $50 casino credit. Each month the top winner among players at participating casinos will receive $1,000 cash and a $100 casino credit. CasinoContest (www.CasinoContest.com) this week announced its first Weekly Bonus Draw winner, a regular player at Vegas Grand Casino, (www.VegasGrand.com) who won a $50 credit in the participating casino of his choice.

This Week in Cyber Crime -- Yahoo! reports that a group of white-collar criminals using stolen credit cards was the major factor behind online gaming operator My Casino Ltd's $A1.1 million ($US610,280) first-half loss. A statement released by the company said the company was allowing for fraud losses of up to $A3.5 million ($US1.94 million) in its half-yearly accounts. Upon realizing how serious the problem was, the company shut down its credit card system for a month and rebuilt it from scratch. The company has since appointed Cardstream as its new authorizing agent and introduced a system where winnings are credited back to the card account. "You'll never totally eradicate credit card fraud," Managing Director Gordon McIntosh told AAP, "but we're confident we'll now get it down to a managable level." McIntosh says the outlook for the company is still strong.

The Associated Press reports that Western Union's website was closed for a few days last week after hackers reportedly broke into the site and copied credit and debit card information while staff were conducting maintenance on the site. The attack came shortly after Thursday's launching of Western Union MoneyZap , a new Internet-based person-to-person payment service. An AP report said that the hackers copied the credit and debit card details of 15,700 Western Union customers who use the site for transfering funds over the Internet.

A Tidbit from Down Under -- Spincycle, Gocorp's Internet game developing subsidiary, announced that it has received regulatory approval by the Queensland Office of Gaming Regulation for six games now available on Gocorp's AusVegas online casino site. The company says that three more games are under development.

A Tale of Success -- Bingo.com, an online bingo site that currently offers only free play, has issued its second quarter review, showing 300,000 registered users have signed up since its December 1999 debut. Company officials estimate that the site grew registrations at a rate of 1.5 new registrants per minute, 24 hours a days, seven days a week. Additionally, the company reports that it attracted over 2,000,000 unique visitors to its site during second quarter 2000.

On the Move -- Online betting service firststake.com announced that it has been awarded a license to operate in Malta and will soon be offering tax-free betting from the island jurisdiction. The company's new international operations center will be based at the Portomaso business and leisure development and will be fully operational by January of 2001. This next phase in the company's development will mean the creation of additional jobs, both at the existing corporate headquarters in Bristol and on Malta. The company's risk management team, currently based in the U.K., will relocate to Malta.

New Faces -- Independent casino game developer Next Generation Entertainment (Aust) Pty Limited has announced the appointment of Brian McKay to its board of directors. Mckay, a former attorney general for the state of Nevada, was most recently senior vice president and corporate counsel for Reno-based International Game Technology, the world's largest manufacturer of gaming machines.

GTECH announced that Robert Vincent has been appointed vice president of corporate communications. Reporting to Donald Sweitzer, GTECH's senior vice president of public affairs, Vincent will assume the role as company spokesperson and will directly oversee GTECH's internal and external corporate communications and media relations worldwide, including all public relations and community relations activities. Prior to his new position, Vincent served most recently as vice president of business development for Dreamport, GTECH's gaming and entertainment subsidiary.

Autotote Corporation has announced the appointing of six new members to its board of directors, upon the closing of the company's acquisition of Scientific Games Holdings Corp. and the investment of $110 million in new Autotote convertible preferred stock, principally by an affiliate of Olivetti S.p.A. The newly appointed directors, who join the four previous members of the Board to bring the total to ten members, are William G. Malloy, previously the president and CEO of Scientific Games; Peter Cohen, the managing member of Ramius Capital Group, LLC and previously the vice chairman and a director of Republic New York Corporation; Colin J. O'Brien, a senior member of Xerox Corporation's executive team since 1992 who in 1996 became the CEO of Xerox's New Enterprise Board; Luciano La Noce, the director of corporate finance for Olivetti S.p.A.; Michael S. Immordino, a partner in the London office of the worldwide law firm of Latham & Watkins; and Roberto Sgambati, the chairman and CEO of Cirmatica Gaming S.A. and the CFO of Lottomatica S.p.A. Cirmatica.

The Dobson Diet -- On a side note regarding Sen. Kyl's and Rep. Goodlatte's aforementioned emergency call to action on Dr. Dobson's radio show, the overweight population in America has struggled for decades with various "miracle" diets, but none seem to produce consistent results across the board. It dawned on me while listening to the three gentleman speak, that Dr. Dobson might be the answer (albeit not exactly what you'd call a scientific answer). Because I was taken aback by the urge to vomit that overcame me while listening to Dr. Dobson speak, I thought that perhaps dieters could just tape a handful of his shows and play the tapes whenever they get the urge to eat. Might be worth a shot.

Lousy Ad Campaign of the Week -- This week's "ICQ Spam of the Week" honors belong to "Julia," who would like you to come play the games at www.bigplayers.com. Julia wrote to me Monday, "Hi, my name is Julia... Let's gamble online casino. http://196.40.4.36/w/in.php3?c=bigmoney." Way to go Julia! She fell short, however, of landing the coveted "Command of the English Language" prize.