YOU'VE GOT JAIL
ex-AOL spam thief sentenced
The long-running saga of the AOL employee who used another employee's access code to steal 92 million email addresses and sold them to spammers has finally been concluded with a jail sentence for the accused.
MSNBC reported this week that 25-year-old former America Online employee, Jason Smathers was sentenced to a year and three months in prison.
"I know I've done something very wrong," the soft-spoken and teary eyed Jason Smathers told U.S. District Judge Alvin Hellerstein as he apologized for a theft that resulted in spammers sending out up to 7 billion unsolicited e-mails.
"The Internet is not lawless" was the lesson of the case, said Assistant U.S. Attorney David Siegal.
Smathers' lawyer, Jeffrey Hoffman, called the theft a "dumb, stupid, insane act" that his client feels terrible about.
Earlier this year, Smathers pleaded guilty to conspiracy charges in a plea deal which had called for a sentence of at least a year and a half in prison.
In a letter from Smathers to the court that was read partially into the record by Siegal, Smathers tried to explain the crimes that AOL has said cost the company at least $300,000 and possibly millions of dollars.
"Cyberspace is a new and strange place," Siegal said Smathers wrote. "I was good at navigating in that frontier and I became an outlaw."
The judge imposed the reduced sentence of one year and three months, saying he recognised Smathers cooperated fully but lacked information to build other criminal cases.
In December, Hellerstein said he was not convinced Smathers had committed a crime, but he accepted the plea in February when he said prosecutors had sufficiently explained why he had.
Smathers admitted accepting $28,000 from someone who wanted to pitch an offshore gambling site to AOL customers, knowing that the list of screen names might make its way to others who would send e-mail solicitations.
The judge has recommended that Smathers be forced to pay $84,000 in restitution, triple what he earned. He delayed the order to let AOL prove the damages were higher. The judge suggested the $300,000 damage figure was speculative.
Prosecutors said Smathers had engaged in the interstate transportation of stolen property and had violated a new federal CAN-SPAM law, short for Controlling the Assault of Non-Solicited Pornography and Marketing Act, which is meant to diminish unsolicited e-mail messages about everything from herbal penile enlargement pills to mortgages.
America Online Inc., a wholly owned subsidiary of Time Warner Inc., has since launched a major assault on spam, significantly reducing unsolicited e-mails.
Smathers was fired by AOL a year after stealing the lists and allegedly selling them to Sean Dunaway, of Las Vegas, who used same to send unwanted gambling advertisements to subscribers of AOL, the world's largest Internet provider. Charges are pending against Dunaway.
The stolen list of 92 million AOL addresses included multiple addresses used by each of AOL's estimated 30 million customers. It is believed to be still circulating among spammers.
The judge refused a Probation Department recommendation that Smathers be banned from his profession as a software engineer, saying he trusted Smathers had learned his lesson.
Gambling is illegal in Japan, but pachinko and pachislot are not technically considered gambling because users can only win merchandise such as food, beer, shampoo or small appliances. But the great popularity of this genre clearly offers opportunities to offshore Internet gambling sites when and if the software providers translate the concept to the online arena.
Yano Research estimates that pachislot machine sales jumped 32.5 percent in 2003 to 525.5-billion yen ($5.7-billion).
The increase was spawned by two games: Daito Giken Inc.'s Yoshimune and Sammy Corp.'s "Hokuto no ken", despite the fact the former was not launched until July of 2003 and the latter came out a few months later. Of the 1.8 million pachislot machines in service, 45 percent operate one of these two games.
Most machines feature a video screen where animated characters hint at coming fortune. Yoshimune adds shutters that open, close, tremble or reveal shadows of characters, depending on how close a player is to a big win.
Hokuto turned a popular 1980s comic about a fighter into a pachislot game. Offering smaller but more frequent winnings, it lets players improve through experience. Yoshimune may be the longest-running game, but Hokuto is the best seller. Sammy, Japan's largest pachislot maker, has sold 620,000 of them. A game is considered a hit if sales reach 20,000.
Both companies sell Sony PlayStation and cellphone versions of their games, as well as branded merchandise ranging from cigarette lighters and action figures to instant noodles and mini refrigerators.
Daito Giken has released two Yoshimune CDs and contributes to a compilation CD of popular pachinko music.
"High-school girls who don't know the music came from a pachislot game are dancing to it," said Daito Kiken spokesman Yasuhiro Yamada.
The company's revenue last year was about 40-billion yen, most of it from Yoshimune-related sales. Mr. Sasaki said Sammy's Hokuto-related sales, including the machines, have earned the company about 300-billion yen in total.
The legal situation regarding the pachislot industry could persuade the originators to consider online deals. Under Japanese regulations, pachislot machines must be taken off the market after three years.
$3 MILL FOR A CENT
It's a land casino win, but a feel-good story anyway
A lucky American gambler won nearly US$3-million last week playing the one-cent slot machines in a Nevada casino, scoring a world record in the process.
Shigeko Ide Stein, 61, won $2,99-million last Wednesday after popping penny coins into the Twilight Zone Video Slots in a casino in the Nevada town of Laughlin, near Las Vegas, which she visits three times a week.
Stein said she took her seat at the machines in the AVI Resort and Casino because it was the only place available but immediately had a premonition she would win.
"I just had a good feeling after seeing a woman had a winning combination but didn't have a max coin bet," she said in a statement issued by slot machine maker IGT.
However the resident of the small California town of Needles, near the border of Nevada, famed for its gambling cities, had no idea just how much cash she would go home with.
Her win of the MegaJackpot broke the previous world record of $2,06-million set earlier this year, according to IGT.
LADIES AT THE BICYCLE
WPT Ladies Night lll set to go on August 31
The now famous excitement and tension of World Poker Tour (WPT) Ladies Night will be on the cards at California's Bicycle Casino this August 31, giving entrants the chance to win a seat at the WPT Championship, and raise money to fund breast cancer research in the process.
Buy-in for the event is $125 dollars, 20 percent of which will be donated to charity.
The poker tournament is two tiered, starting off with a qualifier game, tagged as “Ladies Poker Party.” The winner of the Ladies Poker Party will win a seat to WPT Ladies Night III, slated for the following evening. The winner of Ladies Night, in turn, will win a seat at the WPT championships, worth over $25 000.
Notable female poker players expected to turn up for the prestigious event include celebrity poker players Jennifer Tilly, Shannon Elizabeth, Jennifer Parker, and Sarah Rue, as well as current title holder Isabelle Mercier, Aidily Elviro, wife of Michael “The Grinder” Mizrachi, and more famous names.
ZONE4PLAY GROWTH UP 127 PERCENT
Second quarter mobile gaming revenues up x 4
Mobile and iTV technology company Zone4Play had plenty to crow about in releasing its second quarter results this week.
The company has posted quarterly revenue growth of 127 percent to US$343,457, with licensing income now comprising half of total revenues.
Mobile gaming was the star of the Zone4Play show with revenues soaring upwards by almost 400 percent during the quarter. "Zone4Play's continued growth reaffirms our commitment to maintaining our position as a leader in the delivery of gaming software across multiple platforms", Shimon Citron, chairman of Zone4Play, said.
LVFH BENEFITS FROM STRONG POKER DEMAND
Canadian poker software provider on a roll
Continuing strong growth in demand for online poker has produced bumper results for Canadian software developer Las Vegas From Home (LVFH) according to its quarterly report issued this week.
The company showcased a rise of 28.7 percent in revenues for the second quarter - an impressive increase of 849 percent over the same period last year at Canadian $2.68 million, generating earnings of Canadian $385,773.
LVFH estimates that the total poker market has grown at just over 20 percent during 2005. The cpmpany operates the Action Poker Network, whose major licensee is Tiger Gaming.
TOUGH TIMES FOR BOSS MEDIA
Swedish software company profits fall dramatically: Bertilsson on the way out
There was little to cheer about for Boss Media shareholders this week as the turnkey provider posted an 82 percent fall in half year profits to US$2.8 million, despite poker driving royalty revenues up 63 percent to US$11.5 million, with more than 50 percent of the increase coming from the Boss online poker network.
And further strife could lie ahead with reports that Sportingbet is expected to reduce its usage of Boss in moving customers onto the Paradise Poker network.
The termination of a video lottery terminal joint venture with Norwegian firm EssNet was part of the reason for the drop in profits, causing a 192 percent dive in licensing revenues.
Boss remains committed to the land-based gaming sector, which it has targeted as an area for recruiting future licensees, says a company spokesman. “There are around 140 WLA members around the world, of which about 60 are in Europe, plus some 500 land-based casinos that all constitute potential customers,” he said.
The firm recently signed a deal to provide an online casino and poker room for land-based operator Princess Group, which operates casinos in Eastern Europe, Turkey, St Maarten and Belize.
The firm also announced that its president and chief executive Peter Bertilsson is stepping down. Bertilsson is leaving for family reasons, and will remain with the firm until a replacement is appointed in the autumn.
“Peter has done an excellent job and it is regrettable that he has now chosen to leave,” Bjorn Nordstrand, president of the Boss Media board, said.
32 RED PARENT SET FOR IPO?
Trafalgar Gaming group hires listing experts
The UK media is speculating that Trafalgar Gaming, the Gibraltar-based online casino operator, is preparing for a US$145 million IPO on the London Stock Exchange (LSE) in the near future.
Trafalgar operates the popular and widely respected 32red.com online casino and poker site, and has reportedly retained investment bank Numis to advise on a listing.
Profits in the region of US$7million are anticipated by analysts, although it seems likely that Trafalgar will be over-shadowed by Cassava Enterprises, owner of 888.com, scheduled to list in September at a valuation of US$1.5 billion.
The proposed Trafalgar listing could net a US$52 million fortune for its co-founder and chief executive Ed Ware, who owns a 36 percent stake in the firm.
Ware is a former Ladbrokes executive and was a contemporary of Nick Rust, now director of gaming at UK digital TV giant BSkyB.
RECORD PERFORMANCE FROM B&W
Turnover soars 204 percent at Austrian public company
The Austrian listed gambling group Bet & Win has enjoyed another record quarter following a substantial marketing drive this year.
Turnover at the sportsbook and online casino group soared 204 percent to US$693 million and profits went up to US$3.25 million.
The number of active sports betting customers rose to 297,221, as the firm spent almost US$9m a month on an increasingly brand-focused campaign designed to improve long-term positioning rather than solely maximising the number of customers in the short term.
Sports betting gross win was up 184 percent to US$31.3 million, with a solid margin of 9.1 percent from a mainly recreational player base. The gaming side had the most impressive quarter with casino gross win up 199.3 percent to US$9.7 million and soft gaming gross win up 297 percent to US$1.33 million.
Poker was also successful, with the new poker room showing a gross win of US$2.47million, a rise of 74 percent.
BetandWin now boasts a turnover of over US$1 bilion for the first half of the year.
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