Nambling Notes - Sept. 3, 1999

The Woes of Starnet -- They've somehow managed to withstand a bitter feud with an ex-licensee, a massive search by half of Canada's police population, heavy criticism from the NCAA and a nose diving stock. You could say August was a bad month for Starnet Communications. To make matters worse, the company filed a report with the SEC last week confirming that independent auditor Ernst and Young is dropping them as a client. A spokesperson for Starnet said Ernst and Young quit because "all of our gaming operations are being moved to Antigua, and they (the auditors) don't have offices down there to accommodate us."

New Sites -- Inland Entertainment kicked off its long awaited online casino portal, Vegasathome.com, this week with a contest that will land grand prize winners a New Year's Eve vacation package at Mandalay Bay. Sweden's Boss Media opened the doors to Pharaoh's Casino, its tenth online casino. A new player, software developer INNOCO, Inc. meanwhile unveiled its first work, Mavericks Casino (www.maverickscasino.com), a Shockwave- enhanced Western flavored site with multi-player casino games.

Wheelin' N' Dealin' -- Xirtrix Gaming subsidiary Transnet Services announced Wednesday a licensing agreement with Future Concepts Ltd. for EZ Money Casino. Transnet will develop the site as an online casino at ww.EZMoneyCasino.com. It's scheduled to go live in October 1999 and will be licensed in the Dominican Republic.

Investors' Corner -- Toronto gaming software developer CyptoLogic Inc. saw its stock rise by 10 percent following its August 27 announcement of a pursuit of a Nasdaq listing. The company is making the move, in part, to attract the attention of U.S. investors. "In the U.S., they're more aware of Internet stocks than in Canada," CryptoLogic CFO Harvey Solursh said. Solursh expects to have a response from Nasdaq officials by the end of October.

Interactive Gaming & Communications Corporation (IGC) announced that its consolidated operating income for the second quarter of 1999 was $410,636, on revenues of $3,302,461, a 12.4 percent return on revenues, and for the six months was $878,707 on revenues of $6,642,722, a 13 percent return on revenues. Net income for the second quarter was $309,301 and for the six months was $622,355. The company also reported that, in accordance with its Century Industries acquisition, an Executive Committee has been appointed to begin the roll up of its Century Industries subsidiary public shareholders. During the acquisition process of Century, both IGC and Century had the opportunity to sell their respective 50 percent equity interest in the joint effort, Gamblenet Technologies Inc., for $2.6 million to Diversified Management Group Partnership, an Irish company. The company received $140,000 in cash and took back a note for the balance to be paid over five years at $500,000 per annum. Diversified Management will have the European rights only to market IGC's ToteMaster(TM) software on a cost plus royalty basis when it is completed.

From the 'General Observation' Department… -- The two North American company's recently subjected to police searches and investigations into illegal gambling activities, Handa Lopez Inc. and Starnet Communications, both underwent hostile breakups with online casino operator Las Vegas Casino, Inc. prior to their legal troubles.

Now That's Scary -- A recent ruling allows the FBI to listen in on conversations and track the location of wireless phone users, as long as the agency first gets a court order. The ruling could be used as a platform to gaining even more privileges. They're now looking for powers to break through security software that renders email and other Internet communications incoherent when traveling along a digital network. Privacy advocates, who, by the way, aren't too happy about this, argue that giving law enforcement easy access to protected email and other files could open the door to hackers.

Quote Worthy -- On Former Michigan State football star Bubba Smith's involvement in marketing an online casino and sportsbook, NCAA Director of Agent and Gambling Activities Bill Saum said, "This kind of action by a former athlete....sends a poor message to our athletes, our boosters and to society." The Harness Tracks of America daily newsletter, which can always be counted on for some verbiage with a little bite, responded, "Really, Bill? First of all, we don't understand what Michigan State has to do with an alumnus, celebrity or not, pursuing whatever he or she chooses. As for the NCAA, if it so concerned about 'sending poor messages to athletes, boosters and society', it might start worrying about the wife and mistress beaters and goons and bullies performing under its banners, and get them out of sports instead of having coaches coddle and protect them." Ouch.