Online Casino News - May 2005 Week 3

NET ENTERTAINMENT HAS RNG CERTIFIED - TWICE!

Top labs approve Swedish companys RNG

Earlier this month InfoPowa reported on Real Time Gaming's success in achieving TST certification for its random number generator, and Net Entertainment is following closely on the heels of that announcement with similar news.

But the Swedish provider has had its random number generator (RNG) certified and approved by not one, but two independent certification bodies: Canada-based Technical Systems Testing (TST) and the Swedish National Laboratory of Forensic Science (SKL).

The results of both certifications confirm that the RNG used in the Net Entertainment gaming platform, Casino Module, adheres to the requirements of highly regulated jurisdictions and yields results that meet the strictest criteria for randomness.

“These certifications are a seal of credibility and fairness which we extend to our clients, aiding them in their ambition to provide an exciting and trustworthy online gaming experience to their customers," says Net Entertainment CEO Pontus Lindwall.

Some 30 online gaming operators use the Net Entertainment casino solution. The company is the Internet gaming division of Cherry, a company listed on the Swedish stock exchange with more than 40 years of experience in traditional casino gambling with 350 land based casino licenses and over 800 employees.

LIVE POKER WEBCAST FROM BICYCLE CASINO

A potent combination of live poker and videostreaming

The synergy between the game of poker and the Internet continued this week with another new initiative - webcasting of live poker from the Bicycle Casino in Bell Gardens California.

Throughout the project cameras pick up unscripted and unedited poker action with real players and real money supported with some commentary.

"Live at the Bike" is filmed live and streamed over the Internet every Wednesday thru Saturday 3pm-10pm Pacific Time. Up to fourteen cameras pick up real and unedited poker action involving genuine members of the playing public. In addition there are instructional videos from the pros and many more poker features.

"As good as some TV shows are, the picture needs a little better quality and while the announcers are knowledgeable, they should talk a little less and allow the viewer to hear more of the action." says a review from Jim Bullough-Latsch of PokerCalifornia.com. The Bike intends to provide just that.

NEW POKER ROOM JOINS BOSS NETWORK

Texas Hold 'em and 7 Card Stud available

Latest poker room to launch using Boss poker software is Imperial Poker.com, a Kahnawake licensed site offering no limit and pot limit Texas Hold 'Em and 7 Card stud poker in English, Greek, French, German, Spanish and Italian languages.

Single table and multi-table tournaments are available, as well as tourneys where winning players are sponsored to major land competitions like WSOP. Turbo tables are also available for the convenience of the expert players who like plenty of fast action.

Financial arrangements on the professionally presented site, which includes full support and a poker school, are through Webdollar and include Neteller Instacash, Firepay, Delta, Switch and Solo. Incentives to join up include a variety of free rolls over the next three months and a $100 bonus for new signups.

When InfoPowa visited the site late on a midweek night, the network had 2034 players online at 353 tables.

GWIN TO ENTER ONLINE POKER BUSINESS

Two poker sites planned for global target markets.

The chairman & CEO of GWIN Inc, Wayne Root, this week signed a Letter of Intent with Live Cast Media to enter the online poker business by capitalising on the brand name Wayne Allyn Root ("WAR").

The agreement is that Live Cast Media (LCM) will create, support and operate at least two new poker Web sites: WARPoker.com and WARPoker.net.

WARPoker.com will be focused internationally, specifically at the Asian and European markets and those localities that allow online poker playing, and will not accept play from U.S. citizens or from citizens in any countries or localities where such play is prohibited.

LCM has a strong history of marketing to the Asian and European markets, and feels confident that utilizing Root's personality and recognition as "America's Handicapper" and "The Face of Las Vegas Gambling" will create a powerful image attractive to an international audience.

WARPoker.net will be a non-rake model for fun & prizes only and will be available for play in all localities where it is legal. This non-rake business model has been enjoying great success and increasing popularity in the United States.

The parties believe that the Wayne Allyn Root name, and the promotional support that GWIN will be able to provide utilizing its database of gamblers and its various media properties, including "Wayne Allyn Root's WinningEDGE" television and radio shows, and Web site will provide a strong user base. Subject to completion of a definitive agreement, the Letter of Intent calls for GWIN to receive 50% of the profits of the WARPoker.net site and 25% of the profits from the WARPoker.com site.

Live Cast Media has been operating globally since 2003 with offices in five worldwide locations including Asia, the United Kingdom and North America. It offers turnkey solutions for online gaming, global marketing and multimedia.

ACR POKER NETWORK CHANGES TO ONGAME SOFTWARE

America's Card Room takes selected poker rooms to new provider

In what poker software provider Dobrosoft describes as "...an amicable arrangement" it was revealed this week that the America's Card Room (ACR) online poker network is changing to the Swedish Ongame poker software, taking some but not all of the poker room *skins* with it to the PokerNetwork.

The changes came to light after online poker players started posting on the gambling fora that changes seemed to be taking place, leading to public statements on the 2+2 poker forum and subsequent media interest.

Nicholas Aron, general manager for ACR's myPokerNetwork confirmed that the network had left Dobrosoft software for Ongame, and revealed that the following poker rooms would be part of the move:

Americas Cardroom
http://www.acrpoker.com

Poker Shootout
http://www.pokershoutout.com

Aloha Poker
http://www.alohapoker.com

BetMaker Poker
http://www.betmaker.com

Casual Poker
http://www.casualpoker.com

DSI Poker
http://www.dsipoker.com

Fabulous Poker
http://www.fabulouspoker.com

Live Action Poker
http://www.liveactionpoker.com

NetPoker24
http://www.netpoker24.com

Panther Poker
http://www.pantherpoker.com

Poker Stand
http://www.pokerstand.com

Poker Playground
http://www.pokerplayground.com

PST Poker
http://www.pstpoker.com

Delta Poker
http://www.deltapoker.com

It appeared as InfoPowa went to press that the other poker room skins formerly with the ACR network were being temporarily held under Miami Poker, but that these sites would ultimately join a new and independent network to be branded The Association of the Independent Game Room Operators currently being put together by Dobrosoft and scheduled for launch in June or July 2005.

Vinko Dobrosevic of Dobrosoft told InfoPowa that the split had been amicable after a four year association with ACR.

"The primary reason for switching software was inability as a stand alone to create a sufficient critical mass to keep the rooms interesting to new players," he said. "The decision was made by BetCris as the parent company of ACR. We parted as friends and BETCRIS is keeping the present licensing rights for Dobrosoft software and may consider using it in the future. Because of the limitations of the new software platform ACR was allowed to bring only a restricted number of franchises to the new network."

Explaining the Miami Poker situation, Dobrosevic said that rather than losing or closing down those ACR franchisees that were not going across to Ongame, it had been agreed that Miami Poker would temporarily add those franchises to its license and provide the same services as they had on ACR. Dobrosoft agreed to assist in handling communication with franchisees for the first two months of the operation. Miami Poker is apparently owned by a European brick and mortar casino operator and their marketing is primarily focused on European players.

One thing stood out in the matter...communications with the playing community could have been much better handled by the companies involved, obviating the speculation and confusion that was evident on several poker-oriented message boards.

UK POKER FANS TO GET MORE POKER TV

SkyTV's Poker Zone is on the way...

Encouraged by the positive legislative moves on Internet gambling in the UK, and the very high profile currently enjoyed in a global sense by the game of poker, SkyTV Channel 226 will launch Poker Zone, a new poker and casino lifestyle entertainment channel on May 18.

Recent surveys show that Britain is widely perceived as the next biggest poker market after the USA, with an estimated daily $7 million spent in online card rooms alone.

The new channel is expected to capture a significant audience of UK poker enthusiasts and probably a healthy chunk of the extensive advertising and sponsored events which poker rooms represent in this highly competitive sector.

Regular programming will include exclusive tournaments, movie nights, brand new documentaries, classic entertainment series and interactive gaming options.

Televised poker is also a catalyst in the new nationwide interest in poker, creating star players through televised tournaments, interviews and instructional programs featuring the best-televised players in the world. British poker personalities like The Hendon Mob and Dave “The Devilfish” Ulliot are becoming household names and A-list celebrities both in the UK and abroad.

It is understood that Sky has plans for Poker Zone beyond the British Isles, too as the game's popularity is growing dramatically in Europe.

“Interactive poker is very popular amongst our viewers” said Jim Sibcy, Managing Director of Pokerzone. “We are providing a service through one of our shows, ‘Poker Night Live’ that aids the poker boom and gives us a distinct advantage ahead of our competition. Poker is becoming increasingly available across a spectrum of UK channels but I can guarantee that pokerzone will provide the most exciting and up to date coverage available.”

The new program officially launches on both SKY and global broadband on Wednesday, May 18th.

GFED POKER TO BE PROVIDED BY TRIBECA

Provider's network now claims 130 rooms

Online poker provider Tribeca Tables Europe Ltd, inked an important deal this week to supply online poker facilities to Internet casino franchiser Gambling Federation, a business association that will enable the many GFED licensees to set up poker rooms on the Tribeca network.

Gambling Federation CEO Flaviano Fogli said, “We are extremely excited at the prospect of working with Tribeca Tables. We see all our existing casino brands benefiting from Tribeca’s poker expertise and network experience and we are looking forward to the launch and a long fruitful partnership”.

Steve Cook, European managing director for Tribeca Tables said, “We are very pleased to welcome Gambling Federation and its family of online brands to the Tribeca network. Online poker is still increasing at a phenomenal pace and in the last year we have gone from two major partners to six. Each of our poker partners offers sublicensing or customized skinning that has already extended the network to over 130 poker rooms”.

Commodore Casino will be the first GFED implementation of the Tribeca Tables custom software. The new brand, Commodore Poker, will be part of the first casino in the group integrated with the new poker facilities.

Tribeca Tables is registered in the Channel Island of Alderney and is committed to providing software solutions to clients exclusively in the arena of ePoker. Other Tribeca clients include Blue Sq, Victor Chandler, Paddy Power, Easyodds, Golden Palace, Poker In Europe, and Doyle Brunson’s poker room Doylesroom.com.

GAMING VC CHOOSES BOSS MEDIA FOR POKER

Casino Club.com to offer poker

There will be more competition in the poker room field soon, following Gaming VC Holdings S.A. announcement this week that it has signed an agreement with Swedish provider Boss Media to provide an online poker platform for Casino Club.com, Gaming VC’s online casino.

The launch is scheduled for July 2005, when Gaming VC plans to offer poker in various European countries and will localise its offering to cater to players’ culture, language and currency. In keeping with its historical strategy to eschew U.S. bets, the Gaming VC will not accept U.S. customers.

The agreement extends the successful four year relationship between the two companies, with Gaming VC Poker joining the Boss poker network.

KING OF VEGAS WILL SOON BE A REALITY

New TV show planned for US Fall season

The apparently insatiable craze for reality TV shows will soon have a newcomer that will be popular with gamblers - King of Las Vegas.

The Las Vegas Sun reported this week that Wayne Allyn Root has entered into an agreement with Spike TV (Cox cable channel 29) to produce "King of Vegas." Root describes the concept as similar to an ironman race, with contestants testing their skill in every form of major gambling found inside a Las Vegas casino.

"To win, you can't just be good at poker," said Root, chairman and chief executive of GWIN Inc., a publicly traded sports handicapping company based in Las Vegas. "Contestants will play craps, blackjack, roulette, baccarat and other games."

The series will culminate with the winner receiving $1 million, being crowned King of Las Vegas and named the best gambler in the United States. Rules for entering the competition will be announced later.

"Donald Trump's 'The Apprentice' inspired me to come up with this," Root said. "The show was a great idea, but if you went to every young male in America and asked them which they would rather do, be with Donald Trump in New York selling real estate or in Vegas, the most exciting city in the world -- two out of three would choose Vegas."

The series will air in the Fall.

SOLEI CLOSED

But players can opt to join new operation

The recent announcement that software provider Playtech has not renewed its license to Casino Solei.com has been followed by the news that the casino site is no longer available.

Players have been informed that Solei has closed, but that they are being migrated with their accounts to Mega Sport Casino.com that Solei's Croatian based land casino owners have apparently acquired.

COSMOTRADE CHOOSES ZONE4PLAY FOR MOBILE GAMES

Europe the market for South Africans

Multi-platform gambling software developer Zone4Play, and Cosmotrade Investments, operator of a large online casino in South Africa, have signed an agreement for the development and delivery of mobile casino games to be distributed throughout Europe.

Under the agreement, Zone4Play has granted Cosmotrade a non-exclusive, non-transferable license for a period of five years to distribute, promote and sub-license Zone4Play's mobile gaming software. Zone4Play will provide platforms consisting of ZoneMAS BackOffice system, ZoneITS interactive terminal server, in addition to front-end development of mobile casino games.

ZoneMAS is an advanced cross-platform back office system enabling the delivery of betting services on numerous interactive platforms such as internet, mobile, iTV, and SMS-TV, using a one-time registration process and a single user account.

WORLD GAMING LISTS

Turnkey provider raises GBP 2.5 million and sees a market cap of GBP 19 million on first day

This week saw the listing on the London AIM stock market of World Gaming plc, which went public under the symbol WGP. The company has raised a total of GBP 2,499,000 at 52.5 pence (US$1.00) per share.

Daniel Stewart & Company plc is acting as advisers and brokers and the following placing statistics were released:

Issue Price: 52.5p;

Number of new Ordinary Shares being placed: 4,760,000;

Gross proceeds of the Placing receivable by the Company:
GBP 2,499,000;

Net proceeds of the Placing receivable by the Company:
GBP 2,029,000;

Proportion of the Enlarged Share Capital represented by the Placing
Shares: 13 per cent.;

Number of Ordinary Shares in issue at Admission: 37,985,203; and

Market capitalisation at Admission at the Issue Price:
GBP 19,262,632.

Prior to October 2004, WG's gaming software was owned and developed solely by the group through its wholly-owned subsidiaries. A joint venture agreement with Sportingbet Plc was entered into in October 2004, through which the software was transferred to an equally owned exempt liability partnership with Sportingbet.

World Gaming currently licenses the gaming software to eleven operators, and is now actively seeking additional quality licensees and white-label partners.

Results for the year were the subject of a recent InfoPowa bulletin. After a reorganisation of the group's operations in the year, turnover of $16.288 million (2003: $17.698m) was achieved, resulting in an operating profit of $5.080 million (2003: $2.330m). After exceptional items of $12.187m in respect of a transaction with Sportingbet in the year, profit before tax grew to $17.370 million (2003: $3.108m).

The following were listed as directors of the company at listing:

James Grossman, Non-Executive Chairman: an attorney with experience in the international business, corporate, and venture capital areas.

Daniel Moran, Chief Executive Officer: over 15 years of international business experience, primarily in the technology and Internet sectors. Most recently, he was the Managing Director for Sportingbet Australia.

David Naismith, Chief Financial Officer: a qualified chartered accountant with several years experience in Internet gaming in various jurisdictions, most recently holding a senior finance role with Sportingbet.

Jon Moss, Sales and Marketing Director: has 8 years senior management experience in the e-gaming sector. Immediately prior to his appointment at World Gaming, Jon held the position of Business Development Director at WagerLogic Limited, the licensing and services subsidiary of CryptoLogic Inc., one of the industry's leading e-gaming software providers.

Clare Roberts, Non Executive Director: has served as a Director of the Company since 18 October 2000 and was Chairman of the Board from 20 November 2002 to 11 April 2003.

Michael Cumming, Non Executive Director: has over 35 years of experience in the field of Private Equity. He is currently Chairman of Mercia Fund Management, Matrix Venture Fund VCT PLC, Private & Commercial Finance Group PLC and UK Smaller Companies Tracker Trust PLC

Commenting on the listing, Daniel Moran, Chief Executive Officer said: "We are delighted to have listed on AIM today. Given the current strength of the online gambling market, we believe that our UK listing will offer a great opportunity to continue the development of the Company. We are delighted to welcome our UK institutional shareholders and look forward to driving the Company forward and providing exceptional value for shareholders."

World Gaming is also traded on the Over The Counter Bulletin Board market in the U.S. under symbol WGMGY.

MILLIONS AVAILABLE FOR ONLINE GAMBLING ADVERTISING IN THE USA

But agencies must navigate sometimes confusing legal waters

Major online gambling groups are looking to place tens of millions of greenbacks on US advertising and promotion, and they're looking for the right agencies to give it to, according to an article in Adweek.com this week. The problem is navigating the often confusing legal waters surrounding these major deals in an environment where conflicting claims on legality are often made.

In recent times the actions of the US Department of Justice in issuing investigative subpoenas and notifying advertising media that they *may* be breaking federal law in accepting online gambling advertisements has exacerbated the situation. No prosecutions have been launched despite this activity, which has caused many important media and search engines to shy away rather than risk an indictment.

A DOJ rep told Adweek that agencies are on their own when it comes to deciding if creating such ads runs afoul of the law.

Adweek says online gambling companies are looking for a bigger cut of the poker-crazed U.S. market, and are asking agencies to help pave the way.

Since February, AAR Partners in New York has launched agency searches for two online gambling companies.

Gibraltar-based Fortune Lounge Group last month tapped Eisner Communications for a $20 million integrated campaign, including TV, print and online ads.

Two weeks later, Belle Rock Gaming, also based in Gibraltar, circulated an RFI calling for pitches for an integrated $20 million campaign. The form asked for driving Web site traffic and measuring ROI.

Both clients and AAR declined to comment for this article; Eisner executives declined to be interviewed based on Fortune Lounge's request.

It is no secret that there are large sums of money to be made in online gambling, a $9 billion market worldwide, according to Dresdner Kleinwort Wasserstein, a European investment bank. The bank projects that consumers' online poker losses, expected to reach $2.9 billion this year, will double by 2008.

To some, the gold rush seems a bit too familiar. "I don't trust it," said one executive who has pursued such accounts. "It almost reeks of the dot-com era, with grandiose budgets but no real money."

"It seems a little bit like the Wild West," said Ellis Verdi, president of New York agency DeVito/Verdi. "There's tremendous growth and not a lot of money but a hell of an interest in marketing. ... If you want to roll the dice, it could be the right client."

But those who have worked with online gambling clients said the suspicion is unfounded. "The proof is in the pudding," said Robert Davidman, CEO of EarthQuake Media, a New York agency that buys media for PartyPoker parent PartyGaming. "We pay our bills on time, we do have good credit."

Jon Weilbaker, an account director at DeVito/Verdi who worked with several online bookmakers while he ran his own business from 1999 to 2002, said those clients "were some of the most straightforward people I've ever worked with. There was not a lot of corporate bureaucracy, and they were some of the most honest clients I've ever had."

Forrester Research analyst Chris Charron suggested that industries shut out of most mainstream advertising have little recourse but to turn to guerilla and viral advertising. Online casino GoldenPalace.com has often resorted to stunts, such as paying boxers to have its name written on their backs during matches.

Gibraltar- and London-based PartyGaming has found legal access to mainstream audiences by advertising its free learn-to-play site on national TV, said Davidman. The agency places ads that tag PartyPoker.net as "the world's largest poker school," he said. Accepting the ads is legal, he added, because neither they nor the site mention the company's wagering site, PartyPoker-.com. NBC runs ads for both PartyPoker.net and HollywoodPoker.com, which launched ads on May 1, deeming the sites educational.

"People just play for free and interact with their brand," Davidman said. "And [the company] hopes when they're ready, they'll be smart enough to find the play-for-real site," which drew 5.6 million U.S. users in March, according to Nielsen Media Research.

For online gambling clients, ROI is king; both Fortune Lounge Group and Belle Rock asked shops for ROI methods, sources said. "The advertising has to basically pay out," said Weilbaker.

NEW CASINOS

Recent arrivals from Playtech and RTG

The first of our newbie casinos this week carries a range of financial instruments that illustrates what a wide choice is open to players in financing their online gambling. Amber Coast Casino.com offers Neteller Instacash, Moneybookers, MyCitadel and Citadel, 900Pay, Navaho eWallet Express, Ecocard, UseMyBank and Instadebit through which players can gamble in dollars, Euros or GBP on the good quality 60+ download casino games on offer. However, read the T&Cs carefully as there are restrictions on what currencies can be used from various countries. The site is cleanly designed and well laid out, with a loyalty program, full 24/7 Support and a typically Playtech range of bonuses. But what are hopefully teething problems earlier this week indicate that players need to be cautious on the bonus front, as the management pulled some questionable "bonus abuser" disqualifications. The licensing is through Curacao in the Netherlands Antilles, and the holding company has the rather provocative title Nameguard Holding Inc, a subsidiary of Amber One International NV. It is understood that Amber One's parent of the same name is a European group. The onsite blurb says that fair gaming is assured by the OPA, which many Internet gambling experts do not feel is a credible entity.

Latest from the RTG studios is the quaintly named JV8Casino.com, a Costa Rican based entity that also owns a sportsbook. The site does not contain sufficient information by today's standards but is professionally if sparsely presented with Support facilities and a pretty standard range of financing options. The lack of upfront information, and a tendency for the software to start downloading without so much as a by-your-leave is disappointing. As at going to press there had been no response to our emails requesting more information on this operation.

MOBILE GAMBLING TECHNOLOGY IMMINENT FROM CHIMERA

Final testing in progress - on schedule for July launch

Nevada-based gambling software developer Chimera Technology Corp. confirmed this week that its Mobile Gaming Platform (MGP) is in the final stages of testing. The platform has thus far been ordered by 724Sportsbook.com and is offered to other licensees of the company's casino and software products.

Chimera's wireless gaming platform will enable users to access various casino games through cellular phones and other wireless mobile devices such as PDA's. The platform will support real play as well as play for fun options.

Industry analyst Juniper Research, has forecast that the mobile gambling industry will reach US $16 billion in revenues by 2008. Market information suggests that currently there are more than 1.7 billion mobile phone users globally.

The Nevada Assembly recently unanimously approved Assembly Bill No.471, which authorizes the use of mobile gaming communication devices for gaming in public areas in Nevada casinos. The introduction of Bill No. 471, has the potential for significant impact on the future of wireless mobile gaming. The Bill now rests with the Senate Judiciary Committee.

Chimera President Ken Chua encouraged shareholders to try the beta games destined for the mobile service either on their cell phones, wireless PDAs or their personal computers. Interested parties with cell phones capable of Internet access can test drive Chimera' mobile gaming platform to play for fun, by entering the following web address in their cell phone:

http://www.724wap.com, ID: viper, password: chimera

The majority of mobile cellular phones with Internet / WAP access, manufactured by Sony Ericsson, Motorola, Nokia, Samsung or Sharp will be able to access the mobile gaming platform.

ANTI-SPYWARE SCENE WARMS UP

CDT wants to hold advertisers to account for adware / spyware intrusions

Interesting moves against adware and spyware have been reported by eWeek.com, which says that the nonprofit Center for Democracy and Technology (CDT) wants blue-chip advertisers to join the fight against shady practices by adware and spyware vendors.

Browser hijacking and other manipulation of PC settings; covert installation through security vulnerabilities; hidden uninstalls; automatic reinstallation; degrading system speed and performance; and the opening of security backdoors that could be used for malicious attacks are all cited as consequences of irresponsible adware activities.

As a public policy group, CDT plans to start contacting about two dozen mainstream advertisers to discuss their direct funding of an industry that it claims thrives on deception and borderline illegal activity.

The campaign is the brainchild of CDT associate director Ari Schwartz, who is also leading an effort to develop industry guidelines around spyware definitions.

"The big money is floating between the advertisers and the adware vendors. That's why we think the advertisers are a key part of the puzzle," Schwartz said in an interview with Ziff Davis Internet News.

Schwartz said the CDT campaign would be used to highlight the absence of accountability in the controversial adware sector.

Schwartz described malicious spyware applications as "close cousins" of adware programs marketed by legitimate adware vendors and said mainstream advertisers are unaware of the shenanigans.

"We want to see the advertisers take accountability for the places they spend their ad dollars. We want them [the advertisers] to call on the adware companies to clean up their acts," Schwartz added.

According to published research by anti-spyware critic Ben Edelman, advertisers include Travelocity, Time Life Walt Disney Classics, Virgin Mobile, Sprint PCS, T-Mobile, Verizon, Chase, Ameriquest, multiple DirecTV resellers, Pitney Bowes, Merck, multiple Viagra sellers, and multiple online gambling sites.

Schwartz also threw his support behind a call for the adware vendors to prove they are willing to clean up installation practices that are being blamed on rogue distributors.

"The idea is for them to go back to their users and ask them to 'opt in' again [to download the adware program]. Our message to them is: If you are willing to come totally clean, then ask your users to opt-in again."

"What we are asking for is reasonable," Schwartz said.

Schwartz recently testified on spyware before the Senate Committee on Commerce, Science and Transportation, where he warned that the entire adware installation and ad-placement process was "sustained through a nearly impenetrable web of affiliate relationships" that is used to "deflect accountability and frustrate law enforcement."

ONLINE BETTING BREAKTHROUGH FOR YOUBET

The $400K compensation must be worth it...

The Tacoma News Tribune reported something of a breakthrough for online gambling in Washington this week. It may not be big for online casinos, but it does take a step in the right direction.

The State Horse Racing Commission has agreed to license Youbet.com, an Internet gambling company that for years had been *illegally* accepting millions of dollars in bets from Washington residents.

The license allows California-based Youbet to accept online bets on horse races around the country from Washingtonians and requires the company to give the state’s horse racing industry a cut of each bet. The company had been taking roughly $12 million a year in bets from state residents, according to the commission.

As a condition of the license, Youbet. com must pay the state $400,000 to compensate for wagers it accepted illegally in 2004.

It’s new turf for the state, which had banned all Internet gambling until last year and is still feeling its way on who should be allowed to offer it and how to regulate it.

Commission Chairman Gary Christenson said, "By giving (Youbet.com) a license, we are insuring that the state of Washington is getting the money that’s due it. If we didn’t give them a license, it wouldn’t guarantee that they’d stop.”

Last year, the state Legislature legalised another form of online gambling called “advanced deposit wagering” on horse races. Youbet.com is the third company to get a state license since the law passed.

Robert Leichner, the Horse Racing Commission’s executive secretary, said it’s the job of the Washington State Gambling Commission, not his five-member racing commission, to enforce laws against illegal Internet gambling.

Ron Crockett, owner of Auburn’s Emerald Downs, the state’s only top-tier horse track, supported the license for Youbet. Emerald Downs has to sign a contract with Internet gambling companies before they become eligible for a racing commission license.

HORSERACING WANTS TO USE THE INTERNET

Another *exception*?

One of the idiosyncracies of the US legal situation is that, whilst legislators do their damnedest to ban Internet gambling, they are often prepared to allow *exceptions* for influential interests in trying to get their proposals approved.

Horse racing is one such group, and in the recent WTO dispute with Antigua the USA was on precarious, double standards ground in this area in claiming that its actions were for the public good and protection.

This week horse racing personalities in New York were clamouring for an Internet betting window to increase their profits, highlighting again this sensitive area.

The occasion was an Albany hearing on the future of racing in the state, and several prominent industry figures recommended that the state should revamp its laws to allow people to bet over the Internet, saying that online betting was a route through which lifegiving revenues could be generated to revitalise an industry that is waning in New York.

"It's (online betting) real, it exists, and we shouldn't just be allowing entities that are not our own to have the whole marketplace," said Jack Knowlton, the managing partner of Sackatoga Stable. "It's a real convenience, particularly when you're talking about attracting younger people to the game. If we want to bring New York racing into the 21st century, this is a part of that."

The hearing was told that the New York Racing Association, which operates the Saratoga, Belmont and Aqueduct race tracks, lost $20 million in 2003, $21.7 million in 2002 and $12 million in 2001.

Attendance at the state's harness tracks has been flagging for years and Off-Track Betting executives testified that they are struggling to compete with out-of-state operators, particularly those in New Jersey where online betting is legal.

Years ago, the Legislature passed a law allowing thoroughbred and harness track betting over the telephone. The law did not address Internet gambling because it didn't exist, said Joe Lynch, chief of racing operations for the state Racing and Wagering Board.

Bills that would have allowed Internet gambling on horse racing in New York failed last year. A spokesman for William Larkin, chairman of the Senate Committee on Racing, Gaming and Wagering, said the measures would be introduced again.

While online betting is closed to New Yorkers, people in states where it's legal can make wagers on races at Belmont or Saratoga at sites such as Youbet or TVG.

Tim Smith, president of Friends of New York Racing, a group of prominent horse racing, breeding and business officials that's trying to help reshape New York's thoroughbred industry, says his group is "enthusiastically in favor" of online betting.

"It's more convenient and customers prefer it," said Smith, the former commissioner of the National Thoroughbred Racing Association. "All things being equal, that ought to produce more revenue, purse money, taxes and so forth."

State Sen. Frank Padavan, a Queens Republican and vocal gambling opponent, said there are already 1.1 million compulsive or problem gamblers in New York, a number he says will increase with ever more gambling venues.

"It's mind-boggling that they want to put more people in a position to be enticed into gambling," Padavan said. "It'll be more people gambling more often. Should that be state policy? I hope not. There is no reason to make an already serious problem worse than it is."

"I think it's a big future for all of us," said Michael Connery, chief executive of Capital OTB. "It's something that has to come about if we're to compete in this era."

WSOP FOURTH STOP AN ENDURANCE RECORD THIS YEAR

Property investor wins with a pair of tens

This year's World Series of Poker (WSOP) fourth stop turned out to be something of an endurance test, with a record playing time of 12 hours 35 minutes at Harveys Casino Resort, reports the Tahoe Daily Tribune.

It turned out to be the longest final table in circuit history when the winner, a 39 year old property investor called Jeffrey Lisandro finally wrapped the game up at 3:15 a.m. with a pair of tens to take the top prize of $542,360.

Lisandro battled against Phil Ivey for two and a half hours in a 12-hour, 35-minute game, edging the 28-year-old who looked like he might take the grand pot with bluffs and persistence, and a pair of deuces in the end.

MFORMA MOBILE TO CARRY WPT ACTION

WPT Texas Hold 'Em online

Global distributor of mobile entertainment, MFORMA Group, Inc., is collaborating with World Poker Tour to bring the excitement and high profile of the WPT to the wireless arena, and announcement reveals this week.

The idea is to create a new way to enjoy the high-stakes, high-energy brand of exciting poker revolutionised by the television series. In just under three years, the World Poker Tour circuit of televised poker tournaments has become one of the most lucrative ventures in sport. Not only has it already crossed the $100 million mark in prize money, but the third season alone awarded over $70 million in prize money and averaged "a millionaire a week."

World Poker Tour Texas Hold 'Em is now available on major U.S. wireless networks and incorporates elements of the WPT TV show, the highest rated TV series in the history of the Travel Channel. It features real time six-person multiplayer capability so that fans may celebrate and play the game together whenever they want to.

"The poker phenomenon is carrying right over to mobile," said Dan Kranzler, MFORMA CEO. "In just a short time, we already have our first virtual millionaire with many more gunning to beat his chip total. The number of users wanting to play in tournaments is beyond all expectations and we've had record numbers of simultaneous multiplayer users."

The game allows users to play free poker with up to five other players in real time. Top graphics make for the sharpest details on crisp card faces and the unique side-to-side camera panning action shows the largest game play space ever seen in a mobile poker game. Every mobile user has the ability to interact with the WPT through promotions, tournaments and prizes, furthering the fun and excitement.

"WPT fans can now play poker anytime, anywhere and engage others in the action! This is real Texas Hold 'Em, where anyone can learn and play. It is the perfect game for the mobile phone that can now truly go all-in," said Andrea Green, Director of Global Consumer Products at WPT.

GAMBLING RAIDS IN NEW YORK

36 arrested in federal actions

Reports from the United States were coming in as we went to press on large scale illegal gambling raids across the New York City and Pennsylvania, with federal officials apparently arresting 36 people.

Five people were initially arrested during the early morning hours of Tuesday, with 31 more picked up on Wednesday morning.

Queens District Attorney Richard A. Brown and Police Commissioner Raymond W. Kelly, announced the indictment of 36 individuals on charges of operating an illegal gambling ring, apparently with organised crime connections. The ring handled illegal wagers on horse racing, professional baseball and football and other sporting events totaling a staggering $360 million over two years.

The indictment also alleges that the ring used a non-traditional "wire room" in the form of an off-shore, internet-based gambling service used by bettors and runners to actually place their wagers. It is alleged that the ring used the off-shore wire room to maintain numerous runners' and bettors' gambling accounts through the Internet website in an effort to evade law enforcement detection through traditional methods.

The criminal enterprise allegedly handled about 2,000 bets each day that generated gross revenues of nearly $500,000 daily, $15 million a month and $180 million a year during the 28-month period covered by the indictment. It is alleged to have relied on modern technology to generate its criminal proceeds including computers, the Internet, e-mail and AOL instant messaging to safedepositsports.com and a toll free telephone number that ran up a monthly bill of over $50,000.

Safe Deposit Sports operated out of Costa Rica last year.

The reports said that a feature of the law enforcement tactics was the use of wiretaps, where Queens District Attorney Richard Brown is "...making his mark as the nation's leader in using wire taps."

Brown recently filed notice of 216 court-authorised wiretaps... almost as many as other D.A.s use in the rest of New York State put together, says one report, claiming that a legal expert called the number "staggering." Brown says the wiretaps are an invaluable weapon against organised crime, illegal drugs and gambling.

And new technology enables the surveillance of emails, instant messages, web site servers and in some rare cases interactive message boards.

Several dozen computers in the tri-state area were seized. Later in the week 31 of the 36 indicted members of a gambling ring were arraigned in State Supreme Court in Queens, with 5 other indicted members still being actively sought.

The accuseds were arraigned on charges of enterprise corruption and promoting gambling. The alleged ringleader of the gambling ring and owner of Safe Deposit Sports was apparently one Christopher Bruno, 34, of Bethpage, L.I., who it was claimed was caught on an FBI tape bragging that he was "...the Osama Bin Laden of gambling." His brother, an employee of the Cantor Fitzgerald stock broking firm was also indicted for allegedly taking bets along with 5 other executives of that company.

GAMBLING ARRESTS CONTINUE IN CHINA

Over 1,300 detained in raids on Internet cafes, nightclubs, homes

Shanghai police raided nightclubs, Internet cafes and private homes, detaining more than 1,300 people suspected of crimes including illegal gambling, Shanghai Daily News reported this week.

More than 1,000 officers joined in the raids early in the week, which resulted in the seizure of 17 vehicles suspected of being used in crimes and eight "gambling machines." Among those detained, two were on a national wanted listed for allegedly organising gambling on the Internet, it said.

The raids are part of a citywide anti-crime crackdown launched at the beginning of May, the paper said and are part of a nationwide crackdown on gambling launched at the beginning of the year. Police had arrested more than 10,000 gambling suspects as of last month and closed hundreds of illegal gambling parlours, some of them operating as recreation centres for the elderly.

Long a mainstay of popular entertainment, gambling was criminalised by China's communist leaders after they seized power in 1949. However, such practices have made a strong comeback in recent years in parallel with the growing economy and a relaxation of social controls.

Authorities complain that gambling is fueling official corruption, organised crime and other ills, saying gamblers often bet with funds embezzled from their companies or the government. Gambling on the Internet is seen as a challenge to the authorities' attempts to block online content they deem as offensive, destabilizing or politically subversive.

WILL HILL GETS THE STANLEY LEISURE DEAL

GBP 504 million for 624 betting shops...amd e-business to be reviewed by Stanley

After weeks of speculation (see earlier InfoPowa bulletins) William Hill Plc, the U.K.'s second- largest bookmaker, has agreed to buy Stanley Leisure Plc's betting shops for 504 million pounds ($930 million) in a deal that enables it to overtake Ladbrokes as the industry lader in Britain.

Bloomberg's reported this week that the purchase of Stanley's 624 betting offices will create a chain of 2,237 bookmakers, quoting William Hill Chief Executive David Harding (49) on a conference call.

Ladbrokes, owned by Hilton Group Plc, runs about 1,900 bookmaking shops in the U.K.

William Hill said it won't proceed with plans to return 453 million pounds to shareholders as a result of the acquisition. The betting-shop operator had planned to give money to investors after being deterred from expanding into the U.K. casino industry when the government scaled back proposed changes to gambling laws.

The planned purchase, which is subject to review by U.K. competition authorities, will create about GBP 13 million of cost savings in fiscal 2006 and add to William Hill's per-share earnings in that year, according to the company.

About GBP 7.5 million of the savings will come from eliminating duplication in areas such as headquarters, sais Will Hill'sFinance Director Tom Singer. The other 5.5 million pounds will come from improving the performance of Stanley shops under William Hill's ownership, according to Singer, who was today promoted to the new position of chief operating officer.

William Hill plans to sell 30 to 50 of the Stanley shops in towns where regulators may deem that the company is gaining a local monopoly, Harding said. The risk of the transaction being stopped by competition authorities is "minimal,'' he said.

Several analysts opined that Will Hill had paid too much for the shops, but acknowledged that the potential for future financial reward was significant.

The Stanley business made earnings before interest, tax, depreciation and amortization of GBP 37.2 million in the year ended May 2, 2004, and profit in the year ended this month was probably "marginally lower'' because of unfavorable horse-racing and sports results, the company said today.

Stanley, the U.K.'s largest casino operator, said the sale will leave it with surplus cash of about GBP 300 million. The company may return a "substantial'' amount to shareholders, Chief Executive Bob Wiper said in an interview.

The betting business is being sold for 13.5 times historic earnings before interest, tax, depreciation and amortization, which is "...a very attractive price,'' Wiper said.

Stanley's online and international betting businesses aren't part of the William Hill transaction, and the Internet unit may now be sold separately, according to Wiper.

"We will now conduct a fairly quick review of our e- businesses, but we don't see them staying in the group in the long term,'' Wiper said. "They may be sold separately, but we expect to hold onto our international business for some time.''

Ladbrokes will remain Europe's No. 1 bookmaker, with 2,400 outlets in the U.K., Ireland and Belgium, according to Hilton Group spokesman James Mason.

CONFERENCE CORNER

Knowledge is power...

Sue Schneider's River City Group in the United States is developing a new InDepth series of events exploring various niches suggested by industry people and we preview these below. Take a look at the upcoming calendar of events now being planned, and contact RCG if you see yourself as a prospective speaker, sponsor or exhibitor.

InDepth: Skill Games - September 8-9, 2005 Hyatt Regency Lake Las Vegas –– This 2 day event will take a look at the specialty area of skill games and where they fit in the world of i-gaming. What’s popular? What’s not? Why add skill games to your suite of player offerings? What business models work best to attract and retain people to your site?

I-Gaming Public Offerings (IPO) - September 27, 2005 Harvard Club in New York City – This one-day event is co-produced with the New York Society of Security Analysts (NYSSA) and will focus on financial and legal experts giving overviews of the industry as well as presentations by 9 public companies.

European I-Gaming Congress (EIG) – Now established as a firm favourite on the European i-gaming industry calendar, this is scheduled for November 7-9 2005 at the Acropolis Convention Center in Nice, France – co-produced with ATE (which produces the ICE show in London), attendance at the fourth year of this event is expected to grow again.

InDepth: Online Poker – December 8-9 2005 Wyndham Nassau Resort. It’s clearly time for a 2-day event devoted exclusively to online poker….and what better place and time than the Bahamas in December. This event will cover information on both internet and mobile poker. Building critical mass for your site, finding the right software provider and tying in with land-based poker are among the topics that will be covered regarding this rapidly growing segment of the industry. Poker is clearly going mainstream on continents around the world, fueled by immensely popular television adjuncts. Learn how to take advantage of this burgeoning market and yet watch out for the pitfalls which may lie in your path.

Pacific Congress on Interactive Gaming (PCIG) Now in its fourth year, PCIG will be held at the Mandarin Oriental Hotel in Macau February 20-21, 2006. Interest in Asia is high and learning how to penetrate that market and serve it with key web and financial services is important to those who seek a truly global strategy.

Websites for each event will be updated as information is available.