Online Casino News - June 2005 Week 4

PARTYGAMING'S IPO UP TO EXPECTATIONS

Biggest London flotation since July 2000

Reuters is first with the news that shares in online casino group PartyGaming surged on Monday after it completed the biggest London flotation in five years, with a value of GBP 4.64 billion ($8.5 billion).

The well-subscribed offer values PartyGaming higher than many British household names such as British Airways and chemicals group ICI, and is the country's biggest flotation since Dimension Data floated for 6 billion pounds in July 2000.

PartyGaming priced its initial public offering at 116 pence per share, but by 0720 GMT the stock had jumped 9 percent to 126-1/2 pence, taking its value straight past that of supermarket J Sainsbury to just over 5 billion pounds.

The float sees existing shareholders sell a 20.6 percent stake in the company, which reaps a profit of almost $1,000 every minute as it pulls in revenue of $100,000 every hour of the day.

"The listing will reinforce the group's position as one of the world's leading online gaming companies and enhance the group's profile as we seek to expand internationally," Chief Executive Richard Segal said in a statement.

The pricing was just below the midpoint of PartyGaming's indicative range of 111 to 127 pence.

PartyGaming, formed in 1997, runs three main brands -- PartyPoker, StarluckCasino and PartyBingo -- and now has more than half the global online poker market.

Poker has become a big money-spinner for Internet gambling companies, which estimate the size of the world Internet gambling market between $7 billion and $12 billion per year and say it is growing by about 20 percent per year.

The Gibraltar-licensed group has suffered a bumpy ride to market, dogged by fears that it could lose its main market as the United States looks to crack down on Internet gambling.

PartyGaming's prospectus warned that its directors risk jail if they travel to the United States, but industry experts said the threat of legal action from the Justice Department was minimal.

The offer consists of 781.6 million existing PartyGaming ordinary shares, prior to the exercise of an over-allotment option of up to 115.3 million shares, it said.

Dresdner Kleinwort Wasserstein is acting as sponsor, sole global co-ordinator and bookrunner.

EU DISPUTE OVER CROSS BORDER GAMBLING COULD END SOON

Belgian lawyer tells law conference it could be over in three years

Reuters has reported encouraging news from the Gambling Law Conference this week, saying that European restrictions to cross-border gambling over the Internet will face a growing number of legal challenges and could fall away within the next three years.

Although European Union law allows cross-border trade by gambling companies, many individual states prevent it, and critics accuse them of doing so to protect their own often monpolistic state lotteries.

"It‘s no longer a case of will the barriers come down but more a question of timing," Ewout Keuleers, an attorney at the Bar of Brussels, told the Gambling Law Conference.

"In two or three years, part of the market will be opened up for more socially acceptable forms of gambling such as sports betting," he told Reuters afterwards.

"It‘s also possible there will be an opening for poker, if courts view it as a game of skill," he added.

Poker has become a big money-spinner for Internet gambling companies, which estimate the size of the world Internet gambling market at between $7 billion and $12 billion per year and say it is growing at around 20 percent per year.

Keuleers said legal challenges to cross-border gambling restrictions have come up in European courts four times since July 2004, compared with five times between 1992 and July 2004.

Last month, Finland‘s Supreme Administrative Court overturned a government decision preventing Hilton Group‘s Ladbrokes from operating there.

"In theory there are restrictions, but in reality the restrictions are becoming increasingly difficult to enforce," Keuleers said.

"It‘s unlikely that within 2006 we‘ll see an open gambling market in the EU, but slowly we‘ll get there," he added.

AMERICAN HITS THE KIWI JACKPOT

US$ 250 000 win on Internet progressive slot

Online slots player Marie from Illinois in the U.S. had only been a Kiwi online casino member for two days when she hit the bigtime this week on the Gold Rally progressive slot. After just nine spins of the reels she turned a $16 bet into a $295,000 win.

"I was so shocked I could not believe my eyes, she said. "I was just hoping to get the dynamites in the corner so that I could play a bonus round and keep on playing. I had to call my son and my best friend to come and confirm that I won!"

The American has big plans for her winnings "I'm going to clear off some of my mortgage, do some repairs to my house, put some away for my son's college education and then pay off my bills, every last one of them. Miracles do happen but I never thought it would happen to me."

Gold Rally is an eight-line, progressive jackpot, video slot game. Its jackpot amount regularly reaches over $500,000 and has recently been as high as $1.8 million. The game play, interactivity and exciting bonus levels all combine to form a really enjoyable experience.

The big win will be paid in one cash amount.

POKER STARS TO LICENSE ON ISLE OF MAN

A wise move from the shores of Costa Rica

Media reports as InfoPowa went to press indicated that the successful online poker operation Poker Stars will be officially announcing its move to the Isle of Man this week.

Accounting for more than 10 percent of market share in the poker sector, Poker Stars will undoubtedly bring millions in revenue with it, and the island is likely to cash in on this agreement through a licensing fee and by collecting tax revenue. Recent changes to corporate taxation in the island have made for attractive levels of tax for groups like Poker Stars.

The reports argue that at this point, online gambling law gets tricky. Thanks to the island's change in law, Poker Stars believes it has the right to accept US bets. Poker Stars is banking on the fact that because the Isle of Man's defence and foreign policy is protected by England, it falls under the authority and laws of the World Trade Organisation.

The Poker Stars move has once again generated rumours that it might try to pursue a listing on the London Stock Exchange, a tactic that could further cement Poker Stars' legitimacy in the international business community.

PokerStars' move from Costa Rica will also help to increase its image throughout Europe, allowing them to target a new audience that will support its core of US users. Poker Stars is hedging its bet on its European success in another way as well. It is the main sponsor for the European Poker Tour and has launched a major advertising campaign in the U.K.

END OF THE ROAD FOR POKER BOOK

Senticore shelves the brand

Public company Senticore, Inc. has formally terminated its use of the PokerBook brand following the introduction of Lobo Poker.com through new subsidiary LoboGaming, a gaming software development and licensing company.

In addition, Senticore and Silver Star Capital Investors have mutually agreed to rescind Senticore's former purchase of the controlling interest in PokerBook Gaming Corp. Silver Star Capital Investors will return to Senticore the full purchase price paid, including a reimbursement of expenses borne by the company during the past six months for software development.

"After experiencing numerous issues during the beta testing phase of PokerBook's proprietary software package, and spending over six months of development time, we decided it would be best to bring in a proven and tested software solution. The LoboPoker.com software is already operable and will officially be rolled out next week through an aggressive marketing campaign," explained Jay Patel, CEO of Senticore.

Patel also spoke of offering a stock swap for each shareholder of PokerBook who purchased their shares between December 6, 2004 and June 16, 2005. "We believe shareholders who backed our original dream are entitled to continue to be a part of it. Once legal arrangements are completed we intend to offer shares in the new company on a share-for-share basis as soon as possible," he said.

TEN SEAT POKER FULLY OPERATIONAL

New site operates through Red Felt

Test programs completed (see previous InfoPowa reports) Ten Seat Poker.com is now fully operational CYOP Systems International Inc. announced this week.

Operated through the company's UK subsidiary Red Felt Software Inc. the no-download Texas Hold'em poker game at TenSeatPoker.com is ready for cash play, saving players the hassle of installing large files on their computers. A secure transaction system has been developed with multiple layers of security and redundancy, allowing players to use multiple forms of payment.

The site joins more than 200 online poker sites that are collectively generating about $3 billion a year in revenues, equal to 60 percent of last year's $5 billion in gambling revenues from all of the Las Vegas "Strip" according to some analysts.

Making the announcement, Mitch White, CEO of CYOP, commented, "We are happy to have taken CYOP's poker out of development and into revenue. The amount gambled on poker websites around the world in 2005 is estimated to be more than USD $60 billion, and the commission revenues around USD $3 billion. CYOP intends to begin marketing its software immediately to the end user and through business partnerships with existing gaming sites and portals."

POKER ADDICT IN THE MONEY IN WSOP TOURNEY

An exciting first time out ...

The respected online poker portal owner "Poker Addict" has had an exciting and educational first attempt at a 7 card stud hi/lo WSOP tournament, finishing in the money to the tune of $4875 after making it to a creditable 14th place out of a field of 595 poker players. The buy-in was $1 000.

"After being the chip leader for a while it was a bit disappointing to go out 14th but never having played a live tournament I certainly cannot complain," he said after the event, where he came up against some of the top professional players in the game at the final tables. "The 14th prize was $4875 and 1st paid $157,000, eventually won by Steve Hohn for his first WSOP bracelet. I must say that being at the same table as Men the Master and Paul Darden (he sat next to me for at least 2 hours) was a pleasure. Beating Darden on a big pot was the highlight." There were many notable names in the field. Among them were last year’s seven card stud high/low winner Cyndy Violette, Andy Bloch, 2004 Main Event winner Greg Raymer, John Juanda, Mike Matusow, Mark Seif, Doyle Brunson, Barry Greenstein, Daniel Negreanu, and Dutch Boyd. "Of these only Paul Darden, Men “The Master” and Barry Greenstein made it in to the money," Poker Addict reports. "I had the pleasure of knocking out Mike Matusow early on. I did not even know it was him until he was gone and several players at the table congratulated me." PA has written the full story at www.rakerebatereview.com. It's very readable and certainly exciting and we recommend it to anyone interested in the game.

MAJOR SECURITY BREACH, WARNS MASTERCARD

Check those credit card accounts carefully

Security Focus and many other media outlets reported the shocking news this week that data thieves had breached the systems of credit-card processor CardSystems Solutions and made off with extensive data on as many as 40 million accounts affecting various credit-card brands such as Discover and Visa.

The reports were confirmed by announcements from MasterCard International.

The credit-card giant's anti-fraud systems detected the breach and, after analysing the data, MasterCard pinpointed the Atlanta, Georgia-based third-party processor as responsible, the company said in a statement.

"Working with all parties, including issuing banks, acquiring banks, the processor and law enforcement, MasterCard immediately launched an investigation into the breach, and worked with CardSystems to remedy the security vulnerabilities in the processor's systems," the statement said. "These vulnerabilities allowed an unauthorised individual to infiltrate their network and access the cardholder data."

The breach is thought to be the largest data leak to date, potentially affecting one out of every seven credit cards issued in the U.S., according to MasterCard estimates.

The credit-card giant verified that information on at least 68,000 MasterCard accounts was taken from CardSystems' database by "running a script," said spokeswoman Jessica Antle.

MasterCard declined to release more information on the vulnerabilities for fear it would impact the ongoing investigation, she said.

According to CardSystems, the company first identified the "potential security incident" on May 22 and notified the FBI as well as Visa and MasterCard. The company hired a security company to check and took additional measures to harden the systems, the company said in a statement.

CardSystems processes more than $15 billion annually in credit-card transactions on behalf of more than 105,000 small to medium businesses, according to the company's site.

The breach potentially exposed 40 million cards of various brands. As many as 13.9 million MasterCard-branded credit cards may have been affected, the company stated. MasterCard notified its member banks of the specific card accounts affected.

Highly sensitive data, such as social security numbers or birth dates are not kept on the cards and are not at risk, the company said. MasterCard stressed that consumers have zero liability for unauthorised transactions and asked that consumers report suspicious transactions to the card's issuing bank.

MasterCard has given CardSystems a limited amount of time to meet the credit-card giant's standards for security, the company said in the statement. The vulnerabilities that led to the current breach have been fixed, MasterCard said.

SKYLINE CASINO TO CLOSE

Sportingbet operation on the way out

Online players who are members of the Skyline Casino owned by Sportingbet have received emails this week giving them short and abrupt notice that the operation will close its virtual doors permanently on Thursday, June 23rd, 2005.

All players with legitimate deposits and winnings will be paid in full within fifteen business days, the email advises. Any accounts suspected of fraudulent activity will be reviewed by Sportingbet's Fraud Department prior to finalising the status of the account.

Players with any questions are invited to contact support@skylinecasino.com. As at going to press InfoPowa had received no response to a request for further detail.

COOL CASINOS

New from Chartwell Tech Club World Casino.com is the latest Flash and download online casino from Chartwell Technology, and sports 27 games supported by 24/7 Support and a choice of financial arrangements via eCommerce Services United Kingdom. The casino deals in Euro, US dollar and GBP sterling. Both download and Flash versions offer a variety of games including 3 Reel and 5 Reel Slots, Progressive Jackpots, Video Poker, Roulette, Craps, Blackjack and a variety of other card games, Instant Games (including scratchcards) and a selection of Soft Games (Fixed-odds games). The software is tested and certified on an ongoing basis for fairness and randomness by an independent authority, Technical Systems Testing. A $, £ or € 500 Welcome Bonus is currently on offer to launch the casino.

CASINO CAUTIONS

Affiliate bitterness

Several successful and prominent affiliate marketers were clearly less than pleased, and were letting everyone know it at the recent GIGSE conference in Montreal.

The cause of all the bitterness is apparently some unilateral decisions being taken by big online casino groups like Vegas Partners and Fortune Lounge that adversely effect the rewards that affiliates receive in terms of their agreements with the casinos.

"They (the casinos) assure us that we are in a partnership, yet they make these one-sided decisions without even consulting us. That is not a partnership as far as I am concerned and I will be reacting appropriately to this latest attempt to reduce rewards for sending players to their sites," one angry marketer told us.

Exacerbating an already ugly situation is the fact that the casinos concerned in the changes are making them retroactive, widely regarded as unfair and unprofessional especially in light of the excuse apparently being offered that it would be too difficult in an accounting sense to do otherwise where some arrangements are based on the "lifetime" value of players sent by affiliates.

Another prominent affiliate marketer and portalmaster said that he would be pulling the offending programs from his sites, concluding: "At the end of the day, it's all about mutual trust. If a casino changes its program from a given date, clearly broadcast, that's fine. But if it applies this to players sent under a previous contract, it may be contractually legal or it may not, but it tells me I cannot trust them to treat me right in the future."

Big money is said to be involved - up to $600 000.

It is understood that several affiliate collectives such as the GPWA and CAP are becoming involved in the dispute, and it is likely to be an item high on the agenda at upcoming affiliate conferences.

EXHIBITION AND CONFERENCE ORGANISER TAKEN OVER

ATE now controlled by the UK's Clarion Events

BACTA, the UK trade association for the pay to play amusement industry, has confirmed that Clarion Events, a UK based organiser of trade and consumer exhibitions has acquired a controlling interest in ATE, BACTA’s commercial exhibition, conference, publishing and services subsidiary.

In a statement Colin Daniels, President said, “We are pleased to conclude this transaction which we believe will be good for BACTA, securing the future of the association and good for ATE, giving it the opportunity to do bigger and better things for the industry. We are especially pleased to have found in Clarion a young and dynamic company which shares ATE’s values and will continue the strong working partnership that BACTA and ATE have always shared.

Simon Kimble, Managing Director of Clarion Events said he was delighted with the acquisition of ATE. “Under BACTA’s ownership ATE has become a world leader in the amusement, gaming and betting industries and we believe that together we can benefit from each others range of skills and experiences.

“ATE has a great team of people who have won success by knowing their industries and working with them. That is exactly what Clarion looks for and we want to help and support it in any way we can. I am really looking forward to meeting more people myself and offering any help and support that I can.”

SERVER BASED GAMES FOR WMS

$15 million software deal

U.S. based WMS Gaming Inc., a subsidiary of public company WMS Industries Inc. has entered into wide ranging technology transfer agreements with software developer Cyberscan / Cyberview Technology Inc. in a five year deal worth $15 million.

WMS will get the latest versions of Cyberview's server-based and downloadable gaming systems and related technologies. The non-exclusive agreement also give WMS the right to create derivative versions of these systems and to use, sell, lease, export or distribute the Cyberview technologies in all gaming markets.

In addition, Cyberview has granted WMS a non-exclusive, perpetual, irrevocable, worldwide license to its technology patent portfolio related to server-based gaming. Cyberview will provide WMS' system technology team with initial technical and functional support to enable WMS to operate and further develop these technologies.

The deal includes a five-year agreement for WMS to license certain of its game content to Cyberview on a royalty-based, recurring revenue basis for use in lottery and other non-casino markets outside of North America.

Cyberview will be paid total cash consideration of $15 million over 2 years for these agreements and WMS has been granted rights of first refusal relating to common shares of Cyberscan Technology held by Jean-Marie Gatto and Sylvie Linard.

Cyberview designs and develops server-based game downloads that have been certified by Gaming Laboratories International, Inc. for use in domestic Class III casinos. In addition, Cyberview won a first-place award for Best Productivity-Enhancement Technology at the Global Gaming Business Gaming and Technology awards in November 2004 and recently received the Gold Award for product innovation for both its Downloadable Games Platform and Games Activation Scheduler as displayed at the gaming industry's most prestigious trade show, G2E, in October 2004.

GTECH CLINCHES FINNISH LOTTERY AND SPORTS BETTING DEAL

National lottery Veikkaus partnering

The company that is arguably the world's biggest computerised lottery systems developer, Gtech Holdings Corp., has teamed with Veikkaus Oy, operator of Finland's national lottery, to develop and sell games and technology, with an emphasis on sports betting.

Gtech will hold an 81 percent stake in the venture, with Veikkaus holding the remainder, the West Greenwich, Rhode Island- based company said in a statement. The venture will be based in Finland and will be staffed initially by Veikkaus workers, Gtech said.

The company expects to benefit from Veikkaus's success at developing new games and distributing them through other means than traditional retailers. For the fiscal year ended in February, Gtech's revenue outside of the U.S. and Brazil rose 9.9 percent to $599 million.

The venture is expected to be in operation beginning in the fiscal third quarter, Gtech said.

BOOM IN U.S. GAMBLING SET TO CONTINUE

And the PricewaterhousCoopers figures don't even include Internet operations...

A new study on gambling released this week by internationally respected business services group PricewaterhouseCoopers contains new long-range projections that have gambling revenues growing at a compound annual rate of more than 8 percent over the next 4 years to an expected $100 billion global pie.

According to the Global Entertainment and Media Outlook Study, casino gambling revenue nationwide in the USA will jump from last years' $47.3 billion to $64.1 billion in 2009.

And that includes only the legal, tracked revenues brought in by the nation's casinos and "racinos," be they on Indian reservations, the Jersey Shore or the Las Vegas Strip.

Parimutuel betting, lotteries and Internet gambling are not figured in.

Nevada will see fastest growth in the States, the study said, due to an improved economy and new casino openings. It cited the recent launch of Wynn Las Vegas; the recent combinations of MGM Mirage with Mandalay and Harrah's takeover of Caesars; and other big-money plans including Las Vegas Sands' 3,000-room Palazzo that is set to open next to the Venetian in 2007.

Meanwhile, Atlantic City's take could grow from $4.8 billion last year to $6.3 billion by 2009 and the regional casino category, which includes the "riverboats" of the Midwest and South, will go from $13.4 billion to an even $16 billion over the same period..

Tribal casinos will still rake in the most, though, with an estimated $26 billion in 2009, vs. $18.5 billion in 2004.

Overseas markets will grow rapidly, too with the Asian Pacific region the most vibrant of all as multinationals move in and countries including China (in Macao) Taiwan, Japan, Thailand, Singapore, Malaysia, Korea, Australia and the Philippines open up to or expand casino gambling opportunities.

The region can expect a 15.9 percent compound growth rate out to 2009, the year when gambling revenues will reach $18.5 billion.

Two other regions, Europe-Middle East-Africa and Latin America, will grow at rates of 7.9 percent and 12.6 percent. Factors moving them along include an expected loosening of regulations in the U.K. and legalisation in Mexico and Chile.

The U.S will remain the largest gambling market. At top properties in Las Vegas, food, hotel rooms, entertainment, stores, spa treatments and the like often bring in more money than gambling.

MGM Mirage has big Vegas ambitions and is preparing to hit Las Vegas with its Project CityCenter, a $4.5 billion undertaking to feature thousands of new hotel rooms, a cluster of condo towers and a host of restaurants, stores and entertainment venues. It is expected to open in 2010.

BODOG GOES BIG ON WSOP

Check here to see who the favourites to win are...

There were some interesting poker odds in Bodog's latest World Series of Poker assessment.

The company has qualified over 70 of its players for the World Series of Poker in addition to providing betting odds on the event.

Bodog.com's oddsmakers favor poker superstars Phil Ivey and Daniel Negreanu at 200/1. They are followed by top players Phil Hellmuth, Howard Lederer, Gus Hansen, Chris Ferguson and Erick Lindgren at 225/1.

"With the incredible growth of poker, our players have been clamoring for wagers on the WSOP, " said Calvin Ayre, Founder and CEO of Bodog.com. "It really brings together two of our great strengths – event wagering and poker."

Bodog.com is poised to make a big splash at the 2005 World Series of Poker. In addition to fielding the 70-member Team Bodog and offering odds, the site will host the Bodog.com Poker & Sports Marketing Conference in Las Vegas on July 6 th and 7 th. Sports and poker luminaries expected to attend the conference include Reggie Jackson, Mike Ditka, Daniel Negreanu and WSOP tournament director Matt Savage.

INNOVATIVE FIXED ODDS GAMES FOR STANLEYBET

There are some real Dynamite Ideas here... Fixed odds e-gaming developer Dynamite Idea, and gambling system partner Orbis Technology have launched a suite of brand new fixed odds betting games for Stanleybet, one of the top bookmaker chains in the UK and Ireland. There are 3 initial games. 'Triple Spin', the unique and patented Hi Lo game remains one of the most popular fixed odds betting games in the market where the player predicts if the next number will be higher or lower, uniquely selecting from a choice of 3-reels. In 'Squares' a play-on-demand version of the popular scheduled draw numbers game of the same name, players are offered a choice of numerous bet options, based on the combinations of the 6 numbers drawn between 1-36. 'Hi Lo Dice' invites the player to predict whether the total of both dice will be higher or lower than the current total: payouts and gameplay are increased over a standard Hi-Lo by linking the probability of rolling a particular number to the payout. The game can pay out up to 35 times the stake on a single Hi-Lo choice! Chris Brown, Director of E-commerce from Stanleybet said "Dynamite Idea was the obvious choice to provide games that could be integrated into our OpenBet system from Orbis. There has been a great initial response from our customers and as expected Triple Spin has proven to be hugely popular."

NEW POKER SITE FROM CYBERSPORTSBOOK

Tournaments aplenty

Online gambling site CyberSportsBook has launched its own online poker room, branded BetHold’em Poker.

The new online poker site gives players the option to play either for free (useful in a practice and educational sense) or for cash. Players can also choose from a number of poker variations, including Texas hold'em, 7 card stud and Omaha with table limits starting at 5 cents through to $100 no-limit games.

BetHold’em Poker is also offering tournament options, including freerolls and WSOP qualifying events.

NEW WPT 4 TOURNAMENT FROM TIGER

$14 000 sponsorship for winner

Starting June 20th, 2005 Tigergaming's new cardroom promotion will kick in for sponsored packages worth $14,000 to the World Poker Tour.

In terms of the offer, players can win a prize package valued at $14,000 including travel expenses, hotel accommodation and entry to the WPT Season 4 event at Borgata ($10000+$300).

For only 6 cents players can buy into stage 1 of the satellite tournaments. >From there, the top player who can beat 44 players wins the $14,000 package.

Registration starts Monday June 20th and goes all through the summer until September 3rd, 2005.

EMPIRE MARKET LAUNCH PRICE FALTERS

A promising start, but then significant drop

Empire raised £123m in London on Wednesday at 175p a share, with its Israeli chief executive Noam Lanir pocketing £50 million from a transaction associated with the AIM float, reported the Telegraph this week.

But Empire Online, an the gambling marketer, looked to have burned at least some investors when its shares dived 20½ to 153p on its second day of trading.

Later, Empire's advisers said it had been caught up in the poor sentiment over the mooted £4.76 billion float of PartyGaming, which has already had to cut its planned listing valuation by about £1 billion.

Jag Mundi, head of corporate finance at Numis Securities, Empire's adviser, said: "We have been caught up in the cross-fire over the PartyGaming float. There's a lot of talk over whether their float will succeed or fail or whether they will have to cut their price again."

He said the Empire business, chaired by Stanley Leisure founder Lord Steinberg, was "...the same as it was when it floated" but had been hit by PartyGaming cutting its planned listing price.

Of the cash raised by Empire at the float, only £18m was for the company, with the rest pocketed by the owners, who still have more than 75pc of the group, now valued at £448m.

There were further market jitters over PartyGaming, whose conditional dealings are scheduled to start on June 27. City bookie IG Index said its spread for the shares had slipped to 110p-118p, while Cantor Index has a range of 112p-115p. PartyGaming's indicative range is 111p-127p.

One City banker said: "I think it's really going to struggle. I'm trying to find some support."

Another banker said: "The institutions know Party's owners really want to get it away, so they're going to force the price down. You could get a share price of £1." The owners could pocket more than £1 billion from the float.

PARTY GAMING'S CHAIRMAN IN BREACH OF CORPORATE GOVERNANCE?

£3 million bonanza from coming IPO

Party Gaming chairman Michael Jackson, who could make £3 million from the companies market listing on June 27 demanded a three-year contract before signing up as chairman.

Jackson is reported to have told PartyGaming's bankers Dresdner Kleinwort Wasserstein it was the minimum tenure he would accept for taking on the role.

His contract breaches corporate governance guidelines stating that a non-executive chairman of a FTSE 100 company must not have a contract that is longer than 12 months.

News of Jackson's determination to extend his contract comes just a week after shareholders at Sage, the IT firm where he is also chairman, expressed concern over his new role.

Documents recently released confirm Jackson's £500,000 a year salary for his PartyGaming role in addition to a £1.5m bonus on flotation, scheduled for June 27. The firm is hoping to place its shares at between 111p-127p.

But in unofficial market trading this week the shares slipped to a 110p-118p range after news from the USA that "...there is a significant risk that criminal or civil judgments may be sought against the group of (Party Gaming) directors" in the US.

EXPERTS COMMENT ON U.S. PARTY GAMING THREATS

"...the chances approach those of being hit by lighting," says law expert

Reuters started the news week rolling over the weekend with a story on last week's perceived threats by US authorities that the Party Gaming directors in the States could face legal sanctions. The comments were widely seen as an attempt to diminish the IPO due at the end of this (June) month.

The report quotes observers as saying that such an action is "....about as likely as drawing four aces in a game of five-card stud."

U.S. law enforcers are unlikely to directly pursue PartyGaming or any other online-gambling company due to unresolved legal questions, several industry experts said.

"'It's so remote that the chances approach those of being hit by lighting,' said Joseph Kelly, a professor of business law at the University of Buffalo who has helped other countries draft online-gambling rules.

Efforts to pass an anti-gambling law that applies specifically to the Internet have repeatedly failed in Congress over the past several years amid a thicket of competing interests: horse racing, dog racing, state lotteries and Indian casinos that seek to be excluded from the provisions of any new lay seeking to ban Internet gambling.

PARTY GAMING IPO ON TRACK

Despite threats of US prosecution, the investors like this one

Fund managers planning an investment in Party Gaming have shrugged off the US regulatory risks allegedly attached to the Gibraltar-based online poker operator by placing sufficient orders for shares to ensure that the company will float next week.

By Tuesday evening this week, well ahead of the listing date of June 27 the group's book was fully covered, valuing Party Gaming within its indicated price range of $8 billion - $9.2 billion (£4.4 billion - £5.04 billion).

MAYFAIR CASINO TIES UP WITH CELEBPOKER

Gala celebrity finals scheduled for end July

The Palm Beach Casino in London's swanky Mayfair will be the scene of a gala celebrity Texas Hold 'Em match in late July, organised with CelebPoker.com.

The star studded tournament is to be held over the weekend of July 30/31st 2005 with a prize pool of $120,000 and will include Michael Greco the former Eastender and recent star of Celebrity Love Island. Also appearing will be Jesse Birdsall from Footballer's Wives. Further celebrities players will be announced over the coming weeks.

Players who want to rub shoulders with the glitterati can qualify or register online at Celebpoker.com.

Using the same site, players can qualify for all of the prestigious World Poker Tour Events including the forthcoming Paris tournament where $15,000 prize packages are up for grabs.

BETFAIR CAUTIONS ON U.K. TAXATION

Move offshore a possibility says chairman

The question of British government taxation on internet betting sites was front and centre again this week as the chairman of Betfair issued a veiled threat that it will move its operations offshore if it gets lumbered with a heavier tax rate than traditional bookmakers.

Writing in the companys annual report, Betfair's chairman Sir Robert Horton said that he had "pointed out" to the Treasury, which is reviewing how betting exchanges are taxed, the "...considerable drawbacks of introducing an inequitable tax structure among UK-based operators".

Betfair wants the Government to maintain the status quo of the same rate of tax for traditional bookmakers and betting exchanges, which match bets between individuals. Betfair's high street rivals argue that many of Betfair's customers are acting as professional bookmakers and should pay the gross profits tax which they pay.

Betfair has recently been granted a licence to operate in Malta, and is prepared to make a full-scale move there if the Government bows to the high street betting shops' demands.

It says all its customers should be treated the same, whether they back a horse to win or "lay" it to lose, as Betfair, which is a licensed bookmaker, pays its fair share gross profits tax on its customers' winnings. "Our gross profits tax payment rose to £14.3m from £9.3m last year," Stephen Hill, the chief executive of Betfair, said yesterday when announcing its full-year results.

Pre-tax profits for the year rose 74 per cent despite taking a £4m hit to bail out customers of its rival, Sporting Options, which went bust last year.

Mr Hill declined to comment on whether Betfair is soon to float, but it is understood to have been lining up bankers to take on the task and a decision on whether to pursue a listing is expected within the next month.

TOP BETFAIR MAN COULD BE IN THE MONEY

A public flotation could deliver share-based bonanza

And in a sequel to the Betfair annual report, The Times Online reports that the chief executive of the giant betting exchange company has been given shares that will be worth more than £10 million when the company pursues its much predicted and anticipated stock market flotation.

Stephen Hill, a former chief executive of the Financial Times Group, who joined Betfair in July 2003, stands to get 3.13 million shares, which have been put into an employee benefit trust in his name.

When the shares were put into the trust this year they were valued at 271p each, equivalent to a total of £8.47 million. The mooted £500 million valuation on the possible float would push the worth of the shares to well over £10 million.

A spokeswoman said that the share award was based on the rise in the value of Betfair under Mr Hill’s tenure and was part of his terms of employment. “He doesn’t get a bonus, he doesn’t have a pension or even a company car. This is directly related to the value of the company,” she said.

Mr Hill’s pay last year rose from £269,000 to £325,000.

The firm, which would not comment on its flotation plans, is about to appoint advisers with a view to a possible listing early next year. It has shortlisted Goldman Sachs, Morgan Stanley and UBS.

The biggest shareholders are Andrew Black and Edward Wray, Betfair’s founders, who between them have almost 30 percent. Europeatweb, an internet-based fund controlled by Bernard Arnault, the LVMH boss, has about 10 percent.

Responding to lobbying by the big bookmakers that it should pay more tax, Betfair revealed that its overall contribution to the Exchequer during the year was £26.9 million, made up mainly of gross profits tax and corporation tax.

UKBETTING ROLLS OUT NEW GAMES
10 new offerings from Electracade

British sports bet and casino site Ukbetting plc is increasing its online games portfolio by 10 new games, including 4 new products launched this week using Orbis Technology gambling systems and Electracade Ltd.

The games will appear on UK Betting.com and Total Bet.com.

The new games supplied by Electracade initially include four ‘British Style’ single line slot machines with more to follow shortly. The new slot machines Old MacDonald, Lucky Spell, Pirates Gold and The Fruity Loopy are based on Electracade’s unique SlotEngine, that enables Electracade to build any format of slot machine from any one ‘skin’.

The client can customise the slot machine including how many reels, pay-tables, multiplier reels, fonts, sound banks, which features to activate (nudges, holds, reel picker, super holds etc.) and frequency of feature occurrence.

“The addition of this exciting new content further enhances our games offering whilst the partnership with Orbis and Electracade on these and other products ensures we achieve speed to market”, Ukbetting Project Manager Paul Marchong commented.

WOMEN'S POKER BOOST
Prima and Gaming Club come to the party

Last week InfoPowa reported on the 2005 Ladies International Poker series (LIPS) and this prestigious event for the fairer sex is in the headlines again with some generous sponsorship from two leading online gaming companies. The Gaming Club Online Poker Room and the Prima Poker Network, a global card room network, will turn up the heat with awards of $5,000 to the winners of the LIPS Warm-up Free Roll Tournament, and sponsor three $1000 seats at the World Series of Poker Ladies Event on Sunday June 26th. Other prizes include three all expenses paid tickets to the LIPS Grand Championship in May 2006 and a laptop computer. The LIPS Free Roll Tournament will be hosted by two-time WSOP Ladies event winner, Susie Isaacs, and will be held on Saturday June 25th at 10am Pacific at the Binion's Gambling Hall and Hotel in downtown Las Vegas. The 250 seats available for the LIPS Free Roll Tournament can be reserved with a $20 entry fee. Of the entry fee, $5 is considered a "bounty chip". Each player will receive $1,000 in chips to play with for the tournament. When a player is eliminated from the Free Roll, they will be required to give their bounty chip to their opponent. Interested female poker players can register for the tournament at http://www.lipstour.com. "Our Free Roll event gives LIPS players the ultimate opportunity -- a chance to win this year's prize pot with no buy-in at one of the largest poker tournaments in the world," said Tim Johnson, CEO of Carmen Media Group, the parent company of The Gaming Club Online Poker Room.

"One of our goals is to provide players with an environment to hone their skills and become better poker players. This event allows us to provide that in a real-life environment, while supporting the continued presence of women in poker." The Gaming Club Online Poker Room is putting a $500 bounty on host, Suzie Isaacs. There is also a $250 bounty on Angela Baca, who won The Gaming Club/LIPS Free Roll and an all expense paid ticket to the LIPS Grand Championship earlier this year, as well as Kim Fontes, winner of the 2005 Grand Championship and Kathy Hartman, who won her ticket to the WSOP Ladies event after winning the WSOP Free Roll open to LIPS Grand Championship players. "The LIPS Tour ladies love The Gaming Club Online Poker Room. Their generosity and creative ways for women to play and win at poker has provided avenues for several women to reach their poker playing goals, like playing in higher stakes tournaments like the LIPS Tour Championship and ultimately, the World Series of Poker," said Lupe Soto, Founder and Director of the LIPS Tour.

2005 WSOP THE RICHEST ON THE PLANET

Last year's record prize purse has doubled

2005 is set to be a record year for the World Series of Poker tournament, owned by Harrahs Entertainment. This week organisers said the event was the richest sporting event on the planet, and predicted that the total prize pool at this year will reach a staggering $100 million, more than doubling the record the event set just a year ago. With a total of 45 events, the 36th annual World Series of Poker is the longest, largest and most prestigious event of its kind. Its unprecedented growth necessitated its move this year from its longtime home in downtown Las Vegas to the Rio All-Suite Hotel and Casino just off the Strip, where the tournament is hosted in a 60,000-square-foot gaming area equipped with 200 poker tables. "With each new event we host, we're breaking another record," said Gary Thompson, director of operations and communications for the World Series of Poker. "We have brought in 450 of the world's best poker dealers to accommodate the enormous crowds flooding in from around the globe looking for both tournament and live-game action. Those players are contributing to a prize pool that will dwarf such events as the Indy 500, the Kentucky Derby and the Masters." The record prize pool is being driven by the unprecedented number of players paying entry fees to World Series of Poker events. In 2003, the World Series of Poker generated a total of 7,572 player registrations and a total prize pool of nearly $22 million. In 2004, the total number of player registrations nearly doubled, reaching 14,054 -- and the total prize pool soared to nearly $45 million. Through only the first 19 events, total registrations at the 36th annual World Series of Poker have exceeded 13,500 and the total prize money has risen beyond the $23.5 million mark. With many of the most popular events still to come, organizers believe total prize money will reach $100 million by the time the tournament's main event begins July 7. "I've been playing tournament poker for a long time, but I've never seen anything like this," said Robert Williamson III, who has made multiple World Series of Poker final tables in the last five years and has won a gold bracelet in Pot-Limit Omaha. "I've always been bullish on poker -- it's the greatest game I've ever played -- but there's no way I would have guessed we'd hit $100 million this year. No way." The World Series of Poker is owned and operated by Harrah's Entertainment, Inc., which purchased the tournament early last year. All but the final two days of the 36th annual World Series of Poker will be played at Harrah's Rio casino. The tournament's final days will be played at Binion's in downtown Las Vegas, which hosted the World Series of Poker for its first 35 years.

ANTIGUA vs U.S.A. ROUND THREE

Islanders seeking strategic alliances

The Financial Times reported from London this week that the Caribbean island state of Antigua and Barbuda is looking at “strategic alliances” with UK companies to boost its online gambling industry, as it fights a clampdown from US authorities who apparently consider internet betting to be illegal.

Antigua is keen to benefit from the recently passed UK Gambling Act as a possible path that could bring more clarity to murky legal and trade controversies that threaten the industry.The island is one of several offshore tax havens used by internet gaming operators to avoid the regulatory perils of markets such as the US and to enjoy more lenient rates of tax.“The UK wants to be a leader in internet gaming,” said Kaye McDonald, a director of Antigua's Financial Services Regulatory Commission. “We're looking at all future implications of the UK law in consultation with online gaming operators.”Antigua has tried to attract online gaming operators keen to target the US market. In the next 12 months the Caribbean island state says it is to form a marketing corporation to represent the internet gaming industry as well as tourism and financial services.“My guess is that if you're a listed company [in the UK] and you want to take bets from outside the UK then this is why Antigua is offering its services,” said Peter Dubens, the chairman of UKbetting, a British-domiciled internet gaming operator that is listed on the UK market. The company has not established an offshore operation and would not target the US market until the legality of the industry had been clarified, he added.In a double-edged ruling, the World Trade Organisation found that some of the US measures (on moral protection grounds) were justified but ruled that they had not been applied fairly. However, Antigua contends that such prohibitions would have to be applied to all forms of “remote betting”, including horse racing and buying lottery tickets online, which are legal in some US states.Antigua filed a complaint with the WTO in 2003 after seeing its online gaming industry decline by as much as 60 per cent.Although US federal authorities consider internet gambling illegal, US gamblers account for 50-60 per cent of the $12bn global industry. Over the past decade US legislators have failed despite several attempts to pass a law that explicitly bans internet gambling, but the Department of Justice has stifled the industry by attacking banks that take credit card payments and media outlets that accept advertising from online gaming operators.

At the height of the industry, about 120 online gaming operators once did business in Antigua but that has fallen as low as 22 since the US crackdown. the FT report claims.

Mark Mendel, lead attorney for Antigua, accused the US of dragging its feet in complying with WTO rules and said the legal wrangling could continue for four or five years.

GERMAN SPAMMER SUED
Don't mess with Hotmail...

Techweb News reported this week that Microsoft's German unit has sued an unnamed company in the state of North Rhine-Westphalia for spamming the U.S.-based company's Hotmail service. One of Germany's 16 federal states, North Rhine-Westphalia is in the northwest part of the country. Notable cities in the state include Essen, Cologne, Dusseldorf and Bonn. The as yet unidentified company and its managing director were both listed in the lawsuit, which contends that several million spam messages were sent to Hotmail accounts. Most of the messages were advertisements for Web design and development services, but some touted online gambling or pornographic sites. A network of companies in both the U.S. and the Ukraine were used to send the spam, Microsoft alleges. The company's owner denied sending the spam, and blamed business partners who he refused to name. Although Germany does not have a federal anti-spam law in place, Microsoft was able to sue under a provision of the country's anti-trust legislation.