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Best Gambling Guide for online gambling reviews, best gambling bonuses, gambling games, and gambling tips. Best gambling payouts and best gambling bonuses are featured in this gambling guide.

 

Gambling News by Gambling Headquarters

Tuesday, October 31, 2006

Online gambling firms in £1.6bn merger talks

 

Two leading online poker and casino firms, PartyGaming and 888 Holdings, have held talks about a £1.6bn merger as the industry scrambles to replace revenues lost through the United States' crackdown on internet gambling. The online gambling industry has been devastated by legislation passed in Washington this month preventing banks and credit card firms processing payments for bets. Analysts reckon PartyGaming earned between 75% and 80% of its revenues from the US. The ban caused shares across the sector to collapse. PartyGaming, which has dropped out of the FTSE 100, has made no secret of its plans to seek a deal with rivals to bolster its business. The firm cancelled its dividend shortly after the US ban and said at the time it hoped to take advantage of slumping share prices. Its chief executive, Mitch Garber, said in a recent interview consolidation was the "most sensible way forward" and told analysts he was in talks with several companies. The Stock Exchange might force a statement today. The desperate state of the industry has led to a frenzied round of talks among leading players. 888 was forced to put out a statement recently denying it was behind a bid for another UK listed firm. "I don't think it will come as a great surprise to learn that all parts of the industry are talking to each other," said one industry source. "How concrete those discussions are is another thing. Consolidation is absolutely on the cards. But I think we might see companies waiting to see how things pan out a little. Companies need to sort out their cost bases, for example." Discussions between PartyGaming and 888 are said to be at an early stage. The firms at least don't have far to go: they occupy the same office block in Gibraltar. A source close to 888 said they had not progressed further than "a coffee and a chat". Another industry source said PartyGaming was also pursuing other options, but an 888 tie-up would have obvious benefits. "Casino and poker are the mainstay of both businesses," he said. The US accounted for a little over 50% of 888 revenues, with the remainder largely from Britain and other parts of Europe. It still has around $100m (£53m) cash, even after it pays a planned special dividend. But its shares have also fallen sharply and the company has dropped out of the FTSE 250.

Online gambling firms are under pressure. The sudden disappearance of a large number of players makes online gaming less attractive to customers both because there are fewer people to play against and the companies are not able to offer the same kinds of jackpots.

Neither PartyGaming nor 888 would comment on the merger discussions.

Culture secretary Tessa Jowell yesterday called for an international agreement on the regulation of online gaming, before an international summit at Royal Ascot. Delegates from 30 countries, not including the US, will meet tomorrow to discuss methods for protecting vulnerable people and keeping the industry free of crime. Ms Jowell said companies would be welcome to operate in Britain but only after agreeing to a "very tough" code on social responsibility.

At its peak, PartyGaming was valued at £7bn on the London Stock Exchange. Despite 33 pages of warnings in its float prospectus, including over a possible ban in the US, investors piled in and the directors cashed in more than £1bn. London became the centre for the industry to raise money. Since the US ban PartyGaming shares have dropped by 70% to 30p and 888 shares have declined 24% to 108p.

Gambling Act has little impact

 

The introduction of the Gambling Act three years ago has had little impact on decreasing pokie machines in some regions in New Zealand and it's obviously not working well, says a gambling lobby group. Gambling Watch coordinator David Macpherson said all New Zealand regions had shown a drop in machines in the last three years with a nationwide decrease of 10.1 per cent, but some regions were well below the average. Southland and Waikato both had a reduction of less than 4 per cent. "Some localities within those regions have actually recorded significant increases in pokies," Mr Macpherson said. "It is obvious that the stated aim of the Act, to control the growth of gambling and to prevent and minimise harm caused by it, is not working particularly well in some areas." However, in other regions community concern about the harmful effects of pokie machines was having an impact with numbers decreasing about 15 per cent, he said. "We are pleased that some regions of high pokie concentration, such as the West Coast and Northland, are showing decreases significantly ahead of the national average." Pokie machines are cited by almost 90 per cent of people treated for gambling addiction as the primary cause of their problem.

West Coast Region -15.2 Otago Region -5.8 Waikato Region -3.9 Canterbury Region -8.5 Hawkes Bay Region -7.2 Marlborough Region -13.4 Bay of Plenty Region -5.0 Manawatu-Wanganui Region -8.9 Southland Region -3.7 Taranaki Region -10.1 Northland Region -14.4 New Zealand -10.1 Tasman/Nelson Region -9.4 Gisborne Region -8.2 Wellington Region -8.3 Auckland Region -8.2

Comments welcome on gambling act

 

A NEW system of licensing for premises that are involved in gambling is to come into force in the UK, and local authorities, including Alnwick District Council, will be at the heart of the changes. The Gambling Act 2005 is taking the licensing and regulation function away from the magistrates' courts and transferring it to local authorities, placing new and extended legal responsibilities on councillors and council officers. The new licensing responsibilities will not come into force until April 30, 2007 but in preparation for this new duty, the district council is consulting with the public on how it proposes to apply these new powers. The Statement of Principles, which is the draft gambling polic,y is available on the council's website or can be posted out to anyone interested. The council welcomes comments and feedback on the draft which will be finalised before the end of the year. Members and officers concerned in the decision making process will undergo training so they are fully aware of the facts and procedures to ensure the authority provides an efficient service.

UK seeks support for internet gambling code

 

UK culture secretary Tessa Jowell will this week urge 32 nations to back a code of principles on internet gambling, the first major international measure to regulate the industry as the US imposes a ban. Britain, France, Germany, Spain, Italy, South Africa and other nations will tomorrow meet outside London for talks hosted by Jowell to agree on a code of conduct for companies that offer gambling over the Web.Delegates will discuss age and identification verification systems, including the role of government in smoothing access to high quality data for gambling operators to identify customers. They will also look at social responsibility associated with remote gambling, including the role of government and whether operators should be required to fund awareness campaigns on problem gambling or offer website links to counselling. Delegates from each nation will be asked to examine whether there are any legal or ethical considerations around cross- jurisdiction treatment of problem gambling. A draft of the agreement proposed that nations should agree to "co-operate in development of and share best practice in protecting children and vulnerable people" and to "share findings of research into the remote gambling market". The measures are Britain's attempt to regulate internet gambling instead of criminalising it as US President George W Bush favours. Bush this month signed a law banning credit card companies from collecting payments for online bets. Jowell last week criticised the US for attempting to impose a "new prohibition" against online gaming, saying Bush's measures would prompt fraud and crime by forcing the industry to work illegally from nations that do not regulate the Web.

"America should have learned the lessons of prohibition," Jowell told the Financial Times, adding that the US might "create modern day speakeasies" in the internet gambling industry.

The world's biggest internet gambling companies lost $7 billion (R52 billion) of market value in a day after the US congress passed legislation on September 30.

PartyGaming shares have lost three quarters of their value since then.

The EU is pushing countries to scrap measures that protect domestic companies in gaming.

On October 12, regulators told members such as France and Austria to stop discriminating against international bookmakers and casinos.

Wan vows to come down hard on gambling syndicates

 

NEWLY appointed Criminal Investigation Department director Datuk Christopher Wan Soo Kee has vowed to come down hard on gambling syndicates. Wan said he would suggest to the local authorities to stop issuing new video arcade licenses to check on illegal gambling problems. "I plan to make this my priority. I know many video game operators have been modifying their machines for gambling purposes. " He was speaking after handing over his duties as State police chief to Datuk Koh Hong Sun. Wan takes over from Datuk Fauzi Shaari as national CID director and he begins his duties on Wednesday. He is the highest-ranking non-Malay police officer in the country now and his appointment also marks the first time a Chinese has assumed the post. Wan, 55, was formerly with the Special Branch in Bukit Aman and Malacca police chief before coming to Penang. He said he would use his experience from his stints as the Malacca and Penang police chief to come up with crime prevention initiatives for implementation nationwide.

Illegal gambling grows in Laredo, Texas

 

Gambling -- most of it illegal -- has increasingly been thriving in Laredo, Texas, reported the San Antonio Express-News. Under Texas law, game rooms that feature machines known as eight-liners can award only up to $5 in prizes. But many places in Laredo offer up cash prizes of $40 or more. The Express-News reported that there are 2,423 licensed eight-liner machines in Laredo. That's one for every 43 Laredo residents over 21. Although police have reportedly admitted that most places dole out cash prizes, investigations into the matter have been slowed by a lack of interest or complaints from city residents. Also, there has been little political pressure to step up the efforts, the newspaper said. The increase in illegal gambling is making it harder for law-abiding game rooms. Operators of such game rooms have complained of the slow investigation efforts.

Monday, October 30, 2006

Alcohol board rebukes bars with gambling violations

 

Bar owners heard the message over and over at recent liquor license renewal hearings: Gambling violations will not be tolerated by members of the St. Joseph County board of the state Alcohol and Tobacco Commission. Neither will multiple violations. The local board did not deny any permit renewals Wednesday, but board President Mike Pajakowski and Secretary Curtis Woolley issued stern warnings. A laundry list of violations, including ones for a gambling machine and other gambling materials, brought Grant Jones of Moondog's Pub North, 1516 N. Ironwood Drive, before the board. Woolley told Grant that a list of violations like those before him makes him wonder if the bar is operated like the "Wild West." "It's a slap in the face to all the establishments who abide by the laws and to the board members who granted you the privilege" of being able to do business, Woolley said. Jones assured the board there is no more gambling equipment or violations. "We learned our lesson the first time." Pajakowski said if there were any other violations, the bar's alcohol permit could be in jeopardy of not being renewed. An officer in the corporation that owns Jeannie's tavern, 621 S. Bendix Ave., had to explain to the board why his club lost three gambling machines and $400 that was seized in November by excise police. Don Larson, one of the bar's owners, said without the extra revenue, it is harder to make ends meet at the bar. The board also admonished Carl Blount of Clay Pub, 52170 Indiana 933, for failing to attend an earlier hearing to respond to a violation for having pull tabs, an illegal gambling activity.As Blount was laughing off the situation, Pajakowski told him sternly to "pay attention." Blount's license expired Oct. 19 so he was told he would need to get a letter of extension from the state to purchase alcohol from his supplier. D.L. Austin of Starz bar, 1505 S. Kendall St., won his license renewal after a two-month delay.

His prior violations included one for an unplugged gambling machine he had purchased as a present for his mother's 75th birthday and stored in the bar. She came to the board and verified that Wednesday.After Pajakowski warned its owner about a gambling violation, the board renewed the liquor license for MB's Sports Bar & Lounge, 1004 Roosevelt Road, Walkerton.

The liquor license of the American Legion Post 284 at 23571 Grant Road, was renewed by the board after being remanded from the state commission.

The local board had turned down the renewal when no one from the post appeared for two hearings required because of a gambling violation.

Sinajana leaders snub Prop "B", but allow gambling at village fiesta

 

Some would agree that certain types of gambling activities on Guam is part of the local culture. Also, during village fiestas gambling activities are allowed, but has to go through an approval process, just like this weekend's Sinajana fiesta. But what some may find sort of ironic is that the vice-mayor of the central island village is part of the group that is in opposition of Proposal "B", the initiative to allow the use of slot machines at the Guam Greyhound Raceway Park. The Municipal Planning Council granted approval for Sinajana to set up certain types of gambling activities, cockfighting and card games during this weekend's fiesta. But what may be viewed as ironic is that the village Vice-Mayor Robert Hoffman is also a member of a group that is in opposition of Prop "B", the initiative that allows slot machines. "I can understand why it would seem it's almost ironic," he admitted. "The difference is that the proposal and the gambling that exists here? There are so many different factors. The ones who are running it here are Sinajana people. "I had a great big debate with the Municipal Planning Council to understand this side and that side and saying that difference is 'this one is a weekend, a few hours', like a family get together and decided to sit down and play cards, gambling, we'll sit down and play 21. I know that there is an entertainment portion of it and gambling side to it, but my biggest objection to Prop "B" is the way its written, so many unanswered things." Sinajana mayor Roque Blas confirmed that he doesn't support Prop "B". But if Hoffmann and Blas are against the initiative, and since they are sort of in a position of village authority with what takes place in Sinajana, wouldn't they have some say of what may or may not take place in the village? "Can we say no? We have a Municipal Planning Council that does that," Hoffmann said. "We meet with them regularly and it's them who really decide that. It's not just a council made up of Catholics, or people who are pro or anti anything so it really gives us a really broad objective view."

Mayor Blas added, "It's a little bit beyond my control. Because this has always been one of the culture things that eventually, I guess, if it ever comes to an initiative then it can stop."

While Hofmann and Blas feel that gambling activities during fiestas and Proposal "B" are completely different animals, both venues are expected to benefit the community. Said the mayor, "We take some of that and we give it towards the kids to even host their games and even towards their uniforms for any kind of sports activities that they get involved into which takes some of that cost off of our government coffers because our funding is very limited right now."

Maine's only racino beating feared odds

 

The polished slot machines fill the room with light and noise: a constant click-and-whirl as customers press buttons and pull levers, and bells ringing for winners. The sound of money carries an almost deafening pitch. "It sticks in your head if you play here enough," said Tara Kelley, 26, smoking a cigarette outside Hollywood Slots on Main Street. "I think it's a great sound. Being here is like being in a different world." One year after Hollywood Slots opened on Main Street, and three years after state voters approved slot machines at the commercial harness-racing track, Maine's only slots parlor is thriving. The property, owned by Penn National Gaming, has netted more revenue ­ $32 million and counting ­ than analysts, state and city officials expected. The anticipated rise in police and social service demands have not materialized. And funding from the slots has given Maine's harness-racing industry new life. "There really have not been any glitches or drawbacks," said Jon Johnson, the general manager who transferred from a casino in Mississippi. That message of success has a lot riding on it. The political future of gambling expansion in Maine could very well hinge on Hollywood Slots, and the permanent facility the Pennsylvania-based company will begin building next spring. That $90 million project, across the street from the Bangor Raceway, will be licensed for up to 1,500 slots, three times the number in the temporary facility operating today. In 2003, state voters rejected a proposed casino that would have been run by the Passamaquoddy Tribe and Penobscot Indian Nation in Sanford, but they authorized "racinos," or slot machines at harness tracks. Gambling promoters are circulating petitions for citizen initiatives that allow a tribal-run racino in Washington County and a casino in Oxford County, while gambling opponents are trying to ban slot machines in Maine.

To gambling opponents, what Hollywood Slots calls success is just an illusion.

"They can only win when Mainers lose," said Doug Muir of Kittery, spokesman for No Slots For ME, a political action committee behind the drive to ban slot machines in Maine. "This is a form of gambling that is too addictive, it's too risky and it's too costly," Muir said.

A number of studies show slots lead to gambling addiction faster than other forms of gambling, Muir said. Slots are also connected to higher rates of suicide, crime and other social costs, he said. In terms of the economy, Muir said gaming takes money from other sectors, creating a net loss of jobs. "There is no product made here," Muir said. "It is just a transfer of money from citizens' pockets into their pockets."

From the outside, Hollywood Slots still looks like the buffet restaurant it once was.

Then customers walk into the sparkling lobby, replete with four ATM machines and a security checkpoint. The interior is dressed up with movie memorabilia. There is the sledgehammer wielded by Kathy Bates in "Misery," and the cape Robert DeNiro wore in "Frankenstein." Penn National spent $17 million to create two floors of slot machines, a small restaurant and merchandise shop. "Our guests are learning which machines they enjoy," said company spokeswoman Amy Kenney, during a recent tour. There is usually a line at the door before it opens at 10 a.m. Next week the business is changing its hours. It will be open from 9 a.m. to 1 a.m., instead of 10 a.m. to 2 a.m.

"We don't want to have people lining up out there in the winter," Kenney said. On a gray Thursday morning last week, Hollywood Slots was the only busy place on Main Street. A few hundred cars were parked outside, and by 4 p.m. the lot was nearly full. Johnson said the average daily attendance is about 2,500, and has topped 5,000. Except for a run of summer tourists, nearly all of the players are from Maine.

"It's fun, it's easy, all you do is push the button," said Brenda Radley, 24. Instead of coins, the machines pay out paper ticker tape that players redeem for cash. Radley and her father drive up once or twice a week from Rockland, about an hour and a half away. Bill Radley, 63, has gambled in New Jersey, Connecticut, Nevada and other spots. He would like to see a full casino with table games in Bangor.

"It's good entertainment, whether you win or lose," said Radley, who used to work in the bottle redemption business. Father and daughter usually gamble $20 or $40 apiece, and they don't expect to walk away as winners. For Brenda Radley, it's not just about the slots. "Back when he was doing bottle redemption, working seven days a week, we never had anytime to spend with him," she said. "This is time we can spend together." Bill Radley thinks casinos are good for the economy. That's a familiar sentiment here, where the past is inescapable. From the Hollywood Slots parking lot you can see the 31-foot statue of folkloric lumberjack Paul Bunyan, a tribute to the city's days as a lumber capital.

"We need something in this state," Bill Radley said.

Across the street, drinking a beer at Raena's Pub, Shawn Brad is skeptical. "If it could stay like this, it's enjoyable to a certain extent, it's mostly old people," Brad said. "But you know it can't." If the door is opened to full-scale casino gaming, Brad expects drug use, crime and social deterioration will follow. Bartender Maria Dorso said she can only judge based on what she has seen so far: "For the most part they've been a really good neighbor." Police Chief Don Winslow said the department was called to the property about 75 times since it opened, mostly to deal with minor accidents in the parking lot, and the occasional drunken patron.

"I have been in this industry for 30 years, I have never seen the crime and the problems that people talk about, and I have worked everywhere," said Johnson, the general manager.

Johnson said his staff is up front with guests about what they can expect from the experience at Hollywood Slots. They post information for guests who feel they might have a gambling problem. The state Gambling Control Board has created a new counseling service, which should start up next year. "What I always tell them, we pay back 93 percent of the money wagered, which means that, yes, there is a portion that we keep," Johnson said. "Casinos are not here because everybody wins. This is really entertainment."

The profile of the average player is a middle- or upper-middle-class woman who is over 50 years old, Johnson said. But several players disputed that claim last week.

"A lot of the people who play don't really have the money to be here," said Tara Kelley, a native of Brewer. "They find money wherever they can, and they stay here as long as they can."

Net revenues have climbed steadily, from around $2 million last November to $3.45 million in September. The money flow works like this: Players have bet about $470 million since the opening. About $440 million of that has gone back to players. One percent of the gross, or about $4.7 million so far, has gone to the state General Fund.

The remaining $26 million or so was net revenue. The company gets 61 percent of that, and the state disperses 39 percent to various funds. "It is smooth with a capital 'S,'" said Robert Welch, executive director of the State Gambling Control Board. The agency reviews financial records, and Welch has conversations almost daily with Johnson and other managers.

"We have inspectors on the floor seven days a week. This really could be a battle, and it isn't," Welch said. Slots revenues have generated more than $4.5 million directly for the harness racing industry, along with indirect help. "The horsemen have been the primary beneficiaries," said Fred Nichols, director of racing at Bangor Raceway and Off Track Betting. For the season that runs through Nov. 5, purses at this raceway totaled $1.2 million, more than double the $524,600 from last year. There were 44 race dates this year, 28 last year, Nichols said. Average daily attendance was up slightly.

How long that prosperity will last, though, remains to be seen. There is the potential for a ballot question seeking a slots ban, and other uncertainties. The five-member state Gambling Control Board has issued a nonbinding moratorium on any new facilities. The ban does not have any practical effect, but simply represents the majority opinion of the board.

Board Chairman George McHale of Orrington said Hollywood Slots appears to be running smoothly now, but more time is needed to evaluate the full impact.

Don't bet the schoolhouse on this loser of an issue

 

Criticism against state Issue 3 could easily be compiled a la Elizabeth Barrett Browning. "Let me count the ways ." While proponents dub Issue 3 "Learn & Earn" for its wondrous tuition-generating effect, opponents say this proposal to allow 31,500 slot machines statewide is a smokescreen that would make a handful of private racetrack owners and developers very, very rich. Also, some of the numbers are in dispute. While supporters, for example, say the measure would yield some $850 million each year for Ohio college students, the state's own budget and management office estimates that the annual ca-ching! of slot machines would generate not quite $325 million for tuition. Then, too, there's criticism bubbling up from Columbus, from folks who say Issue 3 is disproportionately nice to Cleveland - where, with voter OK later, slot machine operations could blossom into full-scale gaming tables. Oh, and let's not overlook the much ballyhooed social costs. You know, "the evils of gambling" and all that - no small consideration, as I see it. Besides, any time our vote would authorize a new state commission with the word "integrity" embedded in its name (as in, "Gaming Integrity Commission"), well, I'm thinking maybe the joke would be on us. We could keep taking inventory of specific objections to Issue 3, but that skips over what to my mind is one of the weirder aspects of Learn & Earn, namely: How long do people have to sit around drinking at some bar before they can convince themselves that slot-machine gambling equals the future of Ohio college students? Are we not in The Twilight Zone when we think it makes any sense whatsoever to use higher education as a pitch for voters to approve gambling? I try and try to envision how this came about, but all I can conjure up are conversations between Rod Serling and his doppelganger. "Man, I sure would like to see Ohio get a slice of those gambling dollars, Rod!"

"Boy, Rod, so would I! Wonder how we can do it?"

"Hey, Rod, I've got it! Let's make slot machines a constitutional amendment! But, gosh, how could can we sell it to voters?"

"Oooh, oooh, I know! We'll tell 'em it's 'for the children' - that one works every time, Rod!"

The premise of Issue 3 is so absurdly specious that, were I the bartender on the night Rod & Himself stopped in, I'd have cut them off long before they reached that conclusion.

Alas, no one did.

If you go to the Issue 3 proponents' Web site and read "About Ohio Learn & Earn," you have to plod through five whole paragraphs and 137 words before reaching that section's first mention of slot machines.

It's true that Ohio gets an "F" for college affordability.

No gambling for Johnson this time

 

Getting in position to win a Nextel Cup Series championship hasn't been a problem for Jimmie Johnson. Sealing the deal, on the other hand, that's a whole other matter. Since coming into the series as a rookie in 2002, Johnson has finished the season in the top five in the point standings every year. Two times he finished series runner-up, including a scant eight points behind Kurt Busch in the inaugural Chase for the Championship in 2004. "Looking back at the past few seasons of the chase, we felt we maybe gambled at the wrong time and tried to develop parts and pieces for the car and set-ups at the wrong times," Johnson said. "This year I really think we really stuck to a good plan and developed our stuff at the right time." Johnson's team has the appearance of a fighter exploding out of the corner after getting knocked down with a few left hooks in the first two rounds. After a few bumps in the road early in The Chase, Johnson is back in position to win a title, 41 points behind leader Matt Kenseth with four races left, including Sunday's Bass Pro Shops 500 at Atlanta Motor Speedway. "Obviously, with the slow start we had, I'm happy about it," Johnson said. "We've been knocking on the door for a championship for five seasons, and hopefully, this will be the year for us." Johnson will start Sunday's Bass Pro Shops 500 in third place after rain washed out all of Friday's on-track activity. The field will line up by points, putting Matt Kenseth and the rest of The Chase field out front for Sunday's race. Today's on-track action calls for two Nextel Cup practice sessions, the Crown Royal International Race of Champions season finale, and the NASCAR Craftsman Truck Series Easy Car Vehicle Service Contacts 200. The weather forecast for today is favorable with partly cloudy skies and little chance of rain. Getting in place to win a title hasn't come easy for Johnson, who entered The Chase in second place. After damage dropped him to a 39th-place finish in New Hampshire to start the Chase Johnson found himself in ninth place, well below his accustomed position of no worse than third up until the start of The Chase.

After a finish of 13th at Dover improved him to eighth, a chance for a big points day vanished two weeks later at Talladega where last lap contact between he, Dale Earnhardt Jr. and Hendrick Motorsports teammate Brian Vickers sent Johnson to a finish of 24th.

Since then, the No. 48 team has caught fire similar to the early-season fashion when it won two of the first three races to start the year. A finish of second at Lowe's Motor Speedway followed by last week's win at Martinsville moved Johnson up to third in the standings.

"The luck and the way things have gone have really made this an interesting and crazy chase for all the competitors," Johnson said. "We made good changes we're we need to be. We were let back into this deal in a weird way and it's time to go."

At Lowe's, Johnson was beat to the finish line by Kasey Kahne. Kahne's eighth in The Chase for the Championship, 99 points out of first place. Before the Nextel Cup trophy is hoisted in Homestead, Kahne expects Johnson to have a say in who the champion will be.

"He's right there. He can definitely come in and take away," Kahne said. "At Charlotte we won just off of having a better racecar. He started out with the lead after the final stop and I passed him and drove away."

Johnson getting back into the heat of The Chase couldn't come at a better time for he and his team. He ranks fourth among active Nextel Cup drivers with an average finish of 11.8 at AMS and won the Bass Pro Shops 400 two years ago.

Atlanta's 1.54-mile quad-oval configuration is very similar to Lowe's Motor Speedway and the next track on the schedule, Texas Motor Speedway. Johnson's won five points races at Lowe's in addition to a pair of Nextel All-Star Challenges.

Banning online gambling is a losing hand

 

I don't gamble online. I've seen too many of my friends get so addicted to poker that they've got no time left for Internet porn. And I'm not going to let that happen to me. But I didn't expect Congress to pass the Unlawful Internet Gambling Enforcement Act, treating people who spend all day at partypoker.com like criminals. Maybe I'm a traditionalist, but I think of criminals as people who I can't beat up and who do math slower than I do. It breaks my heart when the greed our nation is famous for gets trumped by the religious posturing we were founded on. It's a horrible conundrum. Either we give up the tax receipts on the US$6 billion that Americans spend gambling online, or we let people do whatever they want with their own money. It's like making Poland choose between scowling and yelling. So we've decided to forfeit all that income -- almost enough to let us invade a very small Middle Eastern country, or at least an emirate -- to foreign governments. Within 10 years, all the world's great bridges to nowhere will be on the Isle of Man. It's kind of sweet that our government wants to protect us from ourselves. It's like it loves us. It has made it clear that it wants us to stay away from drugs, gambling, prostitutes and Janet Jackson, all of which it is right about. And I recognize that the Internet is a particular danger because it makes sin too easy. How can our economy grow when the machine you work on all day also lets you gamble, buy OxyContin and watch porn? If moving your factory lever up built a car engine, and moving it down let you see Little Egypt dance the hootchy-kootchy, we'd be driving like Fred Flintstone. There's a great sense of American optimism in all this lawmaking. Sure, prohibition didn't work, and the drug laws have no effect, but, darn it, we really believe that we're going to stop the 23 million Americans who waste their money gambling online. The cutest part is that Congress doesn't see the irony in telling people not to waste their money. But, of course, capitalism always sneaks its way into morality. Because of strong lobbies, the new law makes an exception, allowing Web sites for lotteries and horse racing. Because, as anyone who's been to a 7-Eleven or an OTB place knows, it's online poker that sets back the poor. Imagine the economic success Appalachia would be if not for PlayBaccarat.com.

At a time when giving up free tax revenue seems particularly insane, the Senate was smart enough to bury the new law in a bill aimed at enhancing port security. Senators didn't see the irony of linking legislation that takes away some of our freedoms with legislation about protecting our remaining freedoms from terrorist attack.

Legislating vice never works, mostly because vice is a lot of fun. The laws wind up being weakened by so many inconsistencies -- you can gamble on a boat permanently docked a few feet off the riverbank as long as it pretends to sail every 15 minutes; you can drink in public as long as it's covered by a brown bag; you can't clone stem cells but you can clone Kelly LeBrock -- they make us lose respect for the law in general.

So, as more people gamble online, the government will eventually have to find a way to back down without looking stupid. The obvious solution is to borrow the Indian casino reparations idea and allow gambling sites to be run by released Guantanamo Bay prisoners. Not only would the profits erase any bad feelings, the former detainees would be great at running poker sites. After all, four years of water-boarding is the perfect training for having to listen to endless stories about bad beats.

Sunday, October 29, 2006

New law wounds Internet gambling

 

Gamblers may look over their shoulder now, but experts say a new Internet-gambling ban won't keep bettors from ponying up, just turn them on to overseas payment services out of the law's reach. "It has put a terrible scare into people," said I. Nelson Rose, who teaches gambling law at Whittier Law School. "But it won't by any means wipe out Internet gambling." The fright swept through the $12 billion industry on the heels of the recent arrests of two gambling company executives and a new law President Bush signed Oct. 13 that seeks to ban most online gambling and criminalizes funds transfers. The law has wiped out billions of dollars in shareholder value of British companies, leaving the industry's future in doubt as U.S. lawmakers initially celebrated finding a way to halt bets coming from America. But serious questions remain about whether the legislation can be effective in stopping U.S. residents from playing poker or betting on sports. The Unlawful Internet Gambling Enforcement Act goes after the money, not the millions of players, which would be nearly impossible to enforce. It will essentially try to choke off the way Americans fund their gambling habits, hoping to prevent the transfer of dollars to the popular Internet sites. It's also widely understood that the law has online poker in its sights, identifying it as a game of chance - something the poker companies dispute. They believe poker is a game of skill and therefore not subject to the new rules. But they're fearful nonetheless. "Their mission is to kill the funding of online poker, and that's what this law does," said Mike Sexton, who hosts the popular World Poker Tour and has won millions as a professional player. 2,000 gambling sites The new law comes amid an explosion in online gambling, fueled by the Texas Hold 'em craze and widespread access to the Internet. In addition, dozens of Web sites have sprouted up that allow gamblers with credit cards to bet on any sport they choose, for any amount of money they want.

Industry experts say there are an estimated 2,000 Internet sites that take bets for sports and poker. American players have fueled Internet gambling, supplying $6 billion of the $12 billion in revenues generated annually.

"The time has been one of rapid growth," said Sebastian Sinclair, president of Christiansen Capital Advisors, a gambling consultant. "This industry was well on its way to becoming mainstream in a great part of the world. Capital was tripping over itself to fund these companies."

The new law gives the U.S. Treasury and the Federal Reserve, along with the attorney general, 270 days to establish policies and procedures.

"The regulations are clearly going to prevent banks from doing electronic fund transfers to gambling sites, but that is no big deal," Rose said. In some cases, banks simply move the money to payment processors, known as e-wallets. Non-U.S. payment processors such as the widely used Neteller then transfer the money to the Internet gambling sites.

The U.S. government has no authority over processors like Neteller that are operating legally. Anthony Cabot, a gambling lawyer in Las Vegas, thinks language used in the bill provides a loophole for the payment processors and the U.S. banks that want to do business with them.

"Unless you have some fairly draconian measures ... the likelihood of stopping payment to them is small," Cabot said.

Offshore betting targeted Much damage has already been done to the offshore sports-betting industry without the looming regulations. British BetOnSports PLC folded after its chief executive was arrested in July by U.S. authorities. David Carruthers faces 22 counts of fraud and racketeering charges and remains under house arrest in the St. Louis area.

London-based Sportingbet's chairman was detained last month in New York on a state fugitive warrant charging him with illegal online gambling. He was eventually freed.

Both arrests sounded serious alarm bells for those running sports wagering sites that take American bets.

The new legislation has already had a dramatic effect. It supposedly clarifies the 1961 Wire Act, explicitly outlawing Internet gambling, including online poker. It creates new criminal penalties that have rattled investors and executives - although Rose said it doesn't expand the act, and there's no indication the Justice Department is about to launch a huge campaign to enforce the law.

Still, the biggest publicly traded names in Internet gambling on the London Stock Exchange and AIM, the exchange's global market for growing companies, could not afford to flout American law. When news broke earlier this month that Congress has passed the bill, Internet-gambling companies traded on those exchanges lost a combined $7 billion in market capitalization.

PartyGaming PLC, once the envy of online gambling with its more than $8 billion IPO in 2005, is now trying to figure out how to save its business model. It runs what was once the world's biggest poker site, PartyPoker, and has said it will no longer take payments from the U.S., eliminating nearly 80 percent of its revenue and sending its stock plunging.

Another poker company, 888 Holdings PLC, also said it would stop taking U.S. bets, ensuring its profits will fall dramatically. Sportingbet and Leisure & Gaming both sold their U.S. operations for a dollar. Sportingbet said its exit from the U.S. market cost it nearly $400 million.

New law wounds Internet gambling

 

Gamblers may look over their shoulder now, but experts say a new Internet-gambling ban won't keep bettors from ponying up, just turn them on to overseas payment services out of the law's reach. "It has put a terrible scare into people," said I. Nelson Rose, who teaches gambling law at Whittier Law School. "But it won't by any means wipe out Internet gambling." The fright swept through the $12 billion industry on the heels of the recent arrests of two gambling company executives and a new law President Bush signed Oct. 13 that seeks to ban most online gambling and criminalizes funds transfers. The law has wiped out billions of dollars in shareholder value of British companies, leaving the industry's future in doubt as U.S. lawmakers initially celebrated finding a way to halt bets coming from America. But serious questions remain about whether the legislation can be effective in stopping U.S. residents from playing poker or betting on sports. The Unlawful Internet Gambling Enforcement Act goes after the money, not the millions of players, which would be nearly impossible to enforce. It will essentially try to choke off the way Americans fund their gambling habits, hoping to prevent the transfer of dollars to the popular Internet sites. It's also widely understood that the law has online poker in its sights, identifying it as a game of chance - something the poker companies dispute. They believe poker is a game of skill and therefore not subject to the new rules. But they're fearful nonetheless. "Their mission is to kill the funding of online poker, and that's what this law does," said Mike Sexton, who hosts the popular World Poker Tour and has won millions as a professional player. 2,000 gambling sites The new law comes amid an explosion in online gambling, fueled by the Texas Hold 'em craze and widespread access to the Internet. In addition, dozens of Web sites have sprouted up that allow gamblers with credit cards to bet on any sport they choose, for any amount of money they want.

Industry experts say there are an estimated 2,000 Internet sites that take bets for sports and poker. American players have fueled Internet gambling, supplying $6 billion of the $12 billion in revenues generated annually.

"The time has been one of rapid growth," said Sebastian Sinclair, president of Christiansen Capital Advisors, a gambling consultant. "This industry was well on its way to becoming mainstream in a great part of the world. Capital was tripping over itself to fund these companies."

The new law gives the U.S. Treasury and the Federal Reserve, along with the attorney general, 270 days to establish policies and procedures.

"The regulations are clearly going to prevent banks from doing electronic fund transfers to gambling sites, but that is no big deal," Rose said. In some cases, banks simply move the money to payment processors, known as e-wallets. Non-U.S. payment processors such as the widely used Neteller then transfer the money to the Internet gambling sites.

The U.S. government has no authority over processors like Neteller that are operating legally. Anthony Cabot, a gambling lawyer in Las Vegas, thinks language used in the bill provides a loophole for the payment processors and the U.S. banks that want to do business with them.

"Unless you have some fairly draconian measures ... the likelihood of stopping payment to them is small," Cabot said.

Offshore betting targeted Much damage has already been done to the offshore sports-betting industry without the looming regulations. British BetOnSports PLC folded after its chief executive was arrested in July by U.S. authorities. David Carruthers faces 22 counts of fraud and racketeering charges and remains under house arrest in the St. Louis area.

London-based Sportingbet's chairman was detained last month in New York on a state fugitive warrant charging him with illegal online gambling. He was eventually freed.

Both arrests sounded serious alarm bells for those running sports wagering sites that take American bets.

The new legislation has already had a dramatic effect. It supposedly clarifies the 1961 Wire Act, explicitly outlawing Internet gambling, including online poker. It creates new criminal penalties that have rattled investors and executives - although Rose said it doesn't expand the act, and there's no indication the Justice Department is about to launch a huge campaign to enforce the law.

Still, the biggest publicly traded names in Internet gambling on the London Stock Exchange and AIM, the exchange's global market for growing companies, could not afford to flout American law. When news broke earlier this month that Congress has passed the bill, Internet-gambling companies traded on those exchanges lost a combined $7 billion in market capitalization.

PartyGaming PLC, once the envy of online gambling with its more than $8 billion IPO in 2005, is now trying to figure out how to save its business model. It runs what was once the world's biggest poker site, PartyPoker, and has said it will no longer take payments from the U.S., eliminating nearly 80 percent of its revenue and sending its stock plunging.

Another poker company, 888 Holdings PLC, also said it would stop taking U.S. bets, ensuring its profits will fall dramatically. Sportingbet and Leisure & Gaming both sold their U.S. operations for a dollar. Sportingbet said its exit from the U.S. market cost it nearly $400 million.

Why pick on Internet gambling?

 

Here in THE U.S., it's OK to bet on horses, play Lotto, gamble at Indian casinos, wager in Atlantic City. And in Las Vegas, it's virtually a patriotic duty to gamble. In all, you can legally bet in 46 of 50 states, but not over the Internet. Online gambling is illegal. Although the online side of the business, while still small, is booming, Las Vegas casinos have hardly clamored for its legalization. That's partly because they figure that whenever folks develop a taste for gambling, they will sooner or later look to Vegas to satisfy their hunger. If the distinction between gambling online and offline strikes you as hypocritical, you're not alone. In November 2004, the World Trade Organization ruled that the United States was in violation of international law by making it a crime for Americans to place bets with online bookies parked offshore. Its court agreed with the tiny island nation of Antigua that, with legal gambling so prevalent in the U.S., laws barring gambling online with offshore casinos was protectionist and, therefore, a violation of international treaties. Antigua's economy, because it depends on Internet casinos, was unduly harmed. Since then, the case has bogged down in post-judgment proceedings to determine the extent of U.S. compliance with the ruling, which the U.S. can still appeal. Aggravating the situation, however, American officials have stepped up enforcement of existing laws, and Congress passed legislation putting more obstacles in the way of online bettors. This summer, federal and state officials arrested two British executives, David Carruthers, chief executive of BetonSports, and Peter Dicks, chairman of Sportingbet, when they touched down in the U.S. to change planes. Although Carruthers' and Dicks' businesses are lawful in their home countries, federal prosectors indicted Carruthers and BetonSports for taking wagers from U.S. residents. Dicks' gambling activities offended the sensibilities of Louisiana law.

Following the arrests, Congress passed the Unlawful Internet Gambling Enforcement Act of 2006. Although the new law doesn't make Internet casinos or bookies illegal (they already are), it bars banks and credit card companies from facilitating the transfer of funds to online casinos.

The actions have prompted some online casinos to announce that they will no longer accept bets from U.S. residents. Although there is some uncertainty about how the new law will work or how easily it might be evaded, shares of online casino companies, which are heavily dependent on U.S. wagers, dropped by as much as 58% on the London Stock Exchange.

Because Congress hasn't moved to shut down other gambling opportunities in the U.S., attacks on Internet gambling amount to little more than favoring vice that enriches bookmakers at home.

Casinos in the U.S. traditionally have "fundamentally opposed" online gambling, said Holly Thomsen, spokeswoman for the American Gaming Assn., the casino industry's lobbying arm. Without "proper regulations," she asked, who would protect the children or the "problem gamblers"?

In April, however, the industry group adopted a more neutral stance, saying the issue deserves further study, which was perhaps not a coincidence, because MGM Mirage and Harrah's, both members of the American Gaming Assn., now say they would like a piece of the action if it were legal.

Online gambling remains a tiny slice of the gaming pie. The gross wagers - amount bet minus winnings - on legal gambling in the U.S. was $83.7 billion in 2005, up $4.8 billion, or 6.1%, from 2004, according to Christiansen Capital Advisors, which tracks the numbers. By contrast, online gambling's gross revenue was $5.9 billion worldwide, just 7% of the U.S. total, despite a 42.2% rise from the year before.

All told, the online gaming revenues were just 27% of those of Indian casinos and one-quarter of those enjoyed by state lotteries. But, of course, these amounts probably would explode if online betting in the U.S. were legal and properly regulated. As it is, a 2005 survey commissioned by the American Gaming Assn. revealed that 4% of Americans gamble online, but 38% of them said they started last year, and 70% of them reported that they began betting online in the last two years.

Given such growth, the online share of the gaming market probably will increase unless law enforcement becomes more effective than anyone imagines.

U.S.-based casino companies have traditionally soft-pedaled their interest in online gaming, it being illegal and all that. But at least some casinos would rather participate than see the entire business outlawed.

The casinos say their interest in betting via modem is not because they fear the competition. Many have wrongly predicted the demise of Las Vegas because venues for legal gambling - riverboats, lotteries, Indian casinos - have expanded, said Robert LaFleur, gaming analyst with Susquehanna Financial Group. But over the years, the conventional wisdom has become "the more gamblers, the merrier," because they'll wind up eventually in Las Vegas. "Anything that creates more gamblers is good for brick-and-mortar casinos," said Dennis Forst, an analyst for Keybanc Capital Markets.

If online gambling is ever legalized here, the big casino companies would get into the business and no doubt dominate it with their trusted brands and their deep-pocketed marketing budgets. Would you rather make a bet with some crew in the Caribbean, or with Caesars Palace, which you might also visit from time to time? The American Gaming Assn. survey indicated that 67% of online gamblers visited a casino in the last 12 months.

City officials ignore facts about casino gambling

 

Two days after the National Coalition Against Legalized Gambling Regional Conference occurred here, I saw Seneca Nation President Barry Snyder, Mayor Byron Brown and Seneca Gaming Corp. officials on public access TV replaying the Fulton Street sale approval announcement and predicting "development, waterfront connectedness, millions of tourists" and other such misleading sound bites. This offensive and private press staging did not present any opposing views or facts. No public input was offered or allowed. There was no citizen representation. This came as a result of surreptitious, behind-closed-door sham "negotiations" over the last two months that overlooked fact, economic research and obvious outcome in other communities. By contrast, the educational, open NCALG conference provided solid economic analysis by experts and research founded on realities. It has been clearly shown that urban casinos cause harm far in excess of any help to the city. Again, look at Detroit, Niagara Falls, New York, Louisiana, Turning Stone or the big casinos in Connecticut - all true losers for these communities. Please understand that there is real human tragedy for individuals and families being created in these "entertainment" palaces. Adult gamblers are modeling the risk of future misery for their children. Buffalo Creek (which will hopefully never open) in legal documents wrote its stated intention is to bring in the local population, but now claims "in writing" that it cares about promoting itself to the region. The Senecas and Brown have no data, no facts and no proof to support the future benefit to Buffalo. The first year's $125 million will go to the building trades - Brown's allies - and yearly thereafter $150 million or more will leave the economy and bring in a zero-development Niagara-Falls type scene, good only for the Senecas and gambling industry supporters.

For every dollar generated, $3 will be lost and $12 million to $16 million in taxes will belong to the sovereign nation, not the city. Five million dollars for the city from the slot cut is 50 percent less than revenue from parking enforcement as projected in the 2006-07 budget.

Is anyone in City Hall doing the math or checking the facts? Not one city official came to the gambling conference. The National Gambling Impact Study Commission stated that as the money is lost faster, the socioeconomic negatives increase dramatically. Its final report confirmed that the gambling industry had created new addicted gamblers, new bankruptcies and new crime and corruption. The 1999 U.S. Gambling Commission unanimously called for a moratorium on the expansion of U.S. gambling. Sadly, however, it has grown into a monster.

Anyone with sense can see the harm coming to Buffalo. Jobs will be lost, restaurants closed, families devastated, bankruptcies and crime increased. The casino is a strategy for injustice, not economic development.

Zayco kin gets 6 years

 

An alleged maintainer of an illegal gambling outfit codenamed "Ching", who is a relative of top government officials in Negros Occidental, was sentenced yesterday to a maximum six-year imprisonment term after he pleaded guilty for violating Republic Act 9287, also known as the amended anti-illegal gambling law. Meted such penalty by Kabankalan Regional Trial Court Judge Henry Arles after having been found guilty beyond reasonable doubt was Vicente Zayco, alias Nene Pinoy. Arles also sentenced Zayco's four companions identified as Renato Garcia, Gene Gomez, Val Sanchez and Randy Jompilla, all bet solicitors of the illegal gambling outfit "Ching", to a maximum of three years of imprisonment. The Oct. 20 raid at the residential compound of Zayco, a first cousin of Vice Governor Isidro Zayco and Kabankalan City Mayor Pedro Zayco, was conducted by virtue of search warrants issued by Judge Roberto Chiongson. It yielded P2,553 in alleged cash bets, assorted gambling paraphernalia, ammunition of various calibers of firearms and an ICOM hand-held radio. Arles said the accused, assisted by their counsel, Alex Abastillas, pleaded guilty to the offense, which was done voluntary on their part, and not through threats or intimidation, induced by any prize or reward. Vice Governor Zayco and Mayor Zayco earlier said they are keeping their hands off the illegal gambling case involving their cousin. Mayor Zayco who is against any form of illegal numbers game, had also warned Vicente several times in the past to put a stop to his illegal activities. Supt. Roderick Alba, Kabankalan police chief, said the court also issued an order placing the convicted persons under the custody of their counsel, pending approval of their application for probation.

Why pick on Internet gambling?

 

Here in THE U.S., it's OK to bet on horses, play Lotto, gamble at Indian casinos, wager in Atlantic City. And in Las Vegas, it's virtually a patriotic duty to gamble. In all, you can legally bet in 46 of 50 states, but not over the Internet. Online gambling is illegal. Although the online side of the business, while still small, is booming, Las Vegas casinos have hardly clamored for its legalization. That's partly because they figure that whenever folks develop a taste for gambling, they will sooner or later look to Vegas to satisfy their hunger. If the distinction between gambling online and offline strikes you as hypocritical, you're not alone. In November 2004, the World Trade Organization ruled that the United States was in violation of international law by making it a crime for Americans to place bets with online bookies parked offshore. Its court agreed with the tiny island nation of Antigua that, with legal gambling so prevalent in the U.S., laws barring gambling online with offshore casinos was protectionist and, therefore, a violation of international treaties. Antigua's economy, because it depends on Internet casinos, was unduly harmed. Since then, the case has bogged down in post-judgment proceedings to determine the extent of U.S. compliance with the ruling, which the U.S. can still appeal. Aggravating the situation, however, American officials have stepped up enforcement of existing laws, and Congress passed legislation putting more obstacles in the way of online bettors. This summer, federal and state officials arrested two British executives, David Carruthers, chief executive of BetonSports, and Peter Dicks, chairman of Sportingbet, when they touched down in the U.S. to change planes. Although Carruthers' and Dicks' businesses are lawful in their home countries, federal prosectors indicted Carruthers and BetonSports for taking wagers from U.S. residents. Dicks' gambling activities offended the sensibilities of Louisiana law.

Following the arrests, Congress passed the Unlawful Internet Gambling Enforcement Act of 2006. Although the new law doesn't make Internet casinos or bookies illegal (they already are), it bars banks and credit card companies from facilitating the transfer of funds to online casinos.

The actions have prompted some online casinos to announce that they will no longer accept bets from U.S. residents. Although there is some uncertainty about how the new law will work or how easily it might be evaded, shares of online casino companies, which are heavily dependent on U.S. wagers, dropped by as much as 58% on the London Stock Exchange.

Because Congress hasn't moved to shut down other gambling opportunities in the U.S., attacks on Internet gambling amount to little more than favoring vice that enriches bookmakers at home.

Casinos in the U.S. traditionally have "fundamentally opposed" online gambling, said Holly Thomsen, spokeswoman for the American Gaming Assn., the casino industry's lobbying arm. Without "proper regulations," she asked, who would protect the children or the "problem gamblers"?

In April, however, the industry group adopted a more neutral stance, saying the issue deserves further study, which was perhaps not a coincidence, because MGM Mirage and Harrah's, both members of the American Gaming Assn., now say they would like a piece of the action if it were legal.

Online gambling remains a tiny slice of the gaming pie. The gross wagers - amount bet minus winnings - on legal gambling in the U.S. was $83.7 billion in 2005, up $4.8 billion, or 6.1%, from 2004, according to Christiansen Capital Advisors, which tracks the numbers. By contrast, online gambling's gross revenue was $5.9 billion worldwide, just 7% of the U.S. total, despite a 42.2% rise from the year before.

All told, the online gaming revenues were just 27% of those of Indian casinos and one-quarter of those enjoyed by state lotteries. But, of course, these amounts probably would explode if online betting in the U.S. were legal and properly regulated. As it is, a 2005 survey commissioned by the American Gaming Assn. revealed that 4% of Americans gamble online, but 38% of them said they started last year, and 70% of them reported that they began betting online in the last two years.

Given such growth, the online share of the gaming market probably will increase unless law enforcement becomes more effective than anyone imagines.

U.S.-based casino companies have traditionally soft-pedaled their interest in online gaming, it being illegal and all that. But at least some casinos would rather participate than see the entire business outlawed.

The casinos say their interest in betting via modem is not because they fear the competition. Many have wrongly predicted the demise of Las Vegas because venues for legal gambling - riverboats, lotteries, Indian casinos - have expanded, said Robert LaFleur, gaming analyst with Susquehanna Financial Group. But over the years, the conventional wisdom has become "the more gamblers, the merrier," because they'll wind up eventually in Las Vegas. "Anything that creates more gamblers is good for brick-and-mortar casinos," said Dennis Forst, an analyst for Keybanc Capital Markets.

If online gambling is ever legalized here, the big casino companies would get into the business and no doubt dominate it with their trusted brands and their deep-pocketed marketing budgets. Would you rather make a bet with some crew in the Caribbean, or with Caesars Palace, which you might also visit from time to time? The American Gaming Assn. survey indicated that 67% of online gamblers visited a casino in the last 12 months.

Britain attacks US online gambling ban

 

Britain's culture secretary on Friday compared the United States crackdown on online gambling to the failed alcohol ban of the Prohibition as she prepared to host an international summit on Internet gambling next week. Tessa Jowell warned that the U.S. ban on Internet gambling would make unregulated offshore sites the "modern equivalent of speakeasies," illegal bars that opened in 1920s America when alcohol was banned. U.S. Congress caught the gambling industry by surprise earlier this month when it added to an unrelated bill a provision that would make it illegal for banks and credit-card companies to settle payments for online gambling sites. The decision closed off the most lucrative region in a market worth $15.5 billion this year in "spend" value - the amount gambling companies win from their clients, or the amount gamblers lose. Several London-based Internet gambling companies and a handful in Europe and Australia subsequently sold off or shut down their U.S. operations, losing around 80 per cent of their combined business in the process. U.S. officials have declined to participate in Tuesday's gambling summit in London, where lawmakers from 30 countries will discuss ways to regulate the industry, including the protection of minors and keeping the industry free of crime.

Vegas gambling giant places bets on Britain

 

THE biggest bets in Las Vegas take place behind closed doors. In the private high-rollers' suites, punters bet $1m a hand on blackjack while sipping $5,000-a- bottle cognac. This month the biggest bet in town is being made away from the slot machines and roulette wheels. It is being placed on the boardroom table, not the card table; and the prize is in Britain. What happens in Vegas is supposed to stay in Vegas; but Chuck Atwood is betting £300m that his firm, Harrah's Entertainment Inc, the world's biggest casino operator, can bring a bit of Sin City to the UK. Atwood, vice-chairman of Harrah's, predicts that its 135p-a-share bid for London Clubs International (LCI), which operates seven casinos in Britain and is opening five more, will "close within a month". Harrah's already controls 34% of LCI after the biggest shareholder, Genting International, the Malaysian gambling group, agreed to sell its 30% stake to the Las Vegas firm last week. Atwood expects the other LCI shareholders to follow suit in a matter of weeks. He knows the bid will make him a hate figure among critics who waged a furious campaign against the government's 2005 Gambling Act, which will unwind the strict rules that have governed gaming in Britain for 40 years when it comes into force next year. Atwood gave an assurance that Harrah's was "responsible and respectable". Giving his first interview to a British newspaper, he said that in gambling "as in almost every activity that human beings engage in, some people do it to excess". But "there is no evidence that gaming is predatory". He added: "The evidence is that casinos provide a very rich entertainment option. They don't prey on people. They offer fulfilling entertainment. There is no horrible social result. The social result is people get jobs. That is a good outcome. We are a quality operator." The public campaign against the gambling act forced ministers to abandon plans for almost a dozen super-casinos and opt instead for one super-casino, eight large casinos and eight small ones. Despite this, Atwood, 58, believes Britain is the ideal new market for gambling firms.

"Britons gamble on everything," he said. "Gambling is probably more widely available (there) than anywhere else in the world. Walk down any high street and there are betting shops. You can gamble on the internet too.

"Brits gamble but they don't gamble in casinos. One reason is that there is not much to do in British casinos other than gamble. We want to change that by creating a nicer and grander experience."

Harrah's £300m bid for LCI is high. It was recently valued at only £230m, and last year it made a £3.6m pre-tax loss. "There are those who believe that we are being foolish, but we see value. We think it could grow by leaps and bounds," Atwood said.

By combining Britons' appetite for gambling with Harrah's casino expertise - it controls the Caesars Palace, Paris and Flamingo casinos on the Las Vegas Strip - Atwood believes he can expand the British market fivefold. "About 3% of people in Britain frequent casinos. I can see that growing to 10% or 15%."

Harrah's wants to export the style and success of modern Vegas casinos to Britain. In recent years the big operators, notably Harrah's and its arch- rival MGM Mirage, have used top acts, celebrity chefs, luxury-goods brands and spas to turn their casinos into upmarket international resorts.

Outside the sandstone walls of Atwood's office at Caesars Palace, Sir Elton John and Celine Dion fill the 4,000-seat Colosseum theatre; shoppers browse the latest Dolce & Gabbana and Gucci collections in the Forum mall; and foodies sit down to a £200-a-head dinner prepared by three-Michelin-star chef. The big casinos now generate more than half their annual revenue from non-gambling sources.

Harrah's wants to add new, Vegas-style entertainment to LCI's existing seven casinos in Britain and its five planned new casinos in London, Nottingham, Glasgow, Leeds and Blackpool. It will also bid for licences to operate the 17 new casinos allowed under the gambling act.

"As well as gambling, our plan is for an auditorium purpose-built for a signature show, top-name chefs and branded stores. We believe that we will offer such a good night out or weekend away that people will come whether they are gamblers or not," said Atwood.

The firm plans to advertise and use direct marketing for the first time in the British casino market. Ads are allowed under the new gambling act, which also allows bigger casinos, unrestricted membership, larger jackpots, more slot machines and liberalised licensing hours.

Harrah's wants to exploit its popular American Total Rewards loyalty programme to attract visitors. The scheme - a Tesco Clubcard-style rewards-for-points programme - tracks customers' gambling and spending and allows Harrah's to come up with tailor-made special offers. The firm plans to use the card to offer gamblers discounted trips to its British and Las Vegas casinos. Executives are rumoured to be in talks with Virgin Atlantic and BMI - the only airlines to fly direct from Britain to Las Vegas - to offer gamblers discounted flights.

Harrah's executives were privately furious when British ministers watered down their deregulation plans. Although the first battle to liberalise fully was lost, Atwood insists the war is far from over. He predicts that, if Harrah's UK investment creates jobs in depressed areas, pressure for more and larger casinos will grow.

"We did not get our first bite. We got our second bite. But the first bite might still be available," he said.

Harrah's may be the first Las Vegas gambling giant to invest in Britain but it is not the only foreign operator moving in. Genting is set to open larger casinos with entertainment and will compete with Harrah's for licences to run the 17 new casinos. MGM Mirage, which controls the MGM Grand, Mandalay Bay, Bellagio and Mirage casinos in Las Vegas, is also eyeing up opportunities in Britain.

For Harrah's, the stakes are higher than simply becoming a lead player in Britain. The LCI deal is the key to an ambitious expansion strategy. "We see London Clubs helping us to expand on the continent and beyond. London will be our European hub," said Atwood.

LCI already owns two casinos in Egypt and one in South Africa, and it acts as a consultant to a casino in Lebanon. Harrah's will retain all LCI's overseas operations and open new casinos. It is working independently on a casino south of Madrid and another in Slovenia.

Saturday, October 28, 2006

U.K. pushes global rules on gambling

 

The British government plans next week to seek international support for legalized, regulated online gambling, emphasizing a trans-Atlantic difference on the issue after the Bush administration's recent move to outlaw transactions with Internet gambling services. During a conference scheduled for Tuesday at the Royal Ascot racecourse, the British government plans to seek adoption of a broad code of principles on Internet gambling, according to a person briefed on a communiqué prepared by the British delegation. Officials from more than 30 countries are expected to attend, though the U.S. Justice Department has declined to send a representative. In contrast to the United States, where President George W. Bush this month signed into law a bill that bans credit card companies and online payment systems from facilitating Internet bets, Britain last year moved to legalize online gambling. "We believe that tough regulation is a better approach than a free-for-all or prohibition," Anthony Wright, a spokesman for Tessa Jowell, the secretary for culture, media and sport, said Friday. "We will be looking to secure agreement to the principles for international standards of regulation." Wright's comments echo remarks attributed to Jowell that were reported in The Financial Times on Friday. She, too, alluded to the U.S. prohibition of alcohol from 1920 to 1933, saying the move to ban online gambling could lead to the creation of "modern-day speakeasies," driving Internet gambling underground and into the control of criminals. The U.S. Justice Department did not immediately return a call seeking comment. Some analysts say the British move to legalize and regulate online gambling companies could create financial benefits for the government by allowing it to tax companies that move back to Britain from offshore locations like Gibraltar and Costa Rica.

But the stock prices of online gambling companies, several of whose shares are traded in London, fell after congressional passage of the U.S. legislation. America has been the largest market for these companies, though several of them have stopped taking bets from U.S. gamblers.

The person briefed on the proposed communiqué, who requested anonymity because he was not authorized to speak on the issue, said it was modeled on the principles of the recent British gambling legislation and was aimed at promoting fairness for gamblers, keeping out crime and making sure children and vulnerable people were protected.

The proposal apparently does not address one potentially sensitive area, state control of gambling, over which Britain disagrees with some of its neighbors. Several of the countries scheduled to attend the conference, including France and Germany, have recently moved to protect lucrative state- sponsored gambling monopolies from online competition.

Online gambling fuels addicts, suicide conference told

 

Unregulated internet gambling is simply adding to the growing problem of addiction, delegates attending the Canadian Association of Suicide Prevention conference in Toronto were told this week. An estimated 200 compulsive gamblers commit suicide in Canada every year, said Terry Flynn, a director of spiritual care at the Bellwood Health Services facility in Toronto. The growth of gambling on the internet, where no regulations exist, is making the problem worse, Flynn said. "It's hidden. You can lie about it and tell people you're doing your homework or that you're researching something, but in fact you're getting into deep trouble," he said.The ever-increasing options available to gamblers in the North - everything from card games to the internet - are contributing to the growing problem, Iqaluit counsellor Sheila Levy told delegates. "They are doing very well with their jobs and making a lot of money, and yet their children are going hungry often because the money goes perhaps in one night in gambling," Levy said.

Online Gambling and Online Poker Players- Its Pay Back Time Kyl!

 

A growing initiative to unseat Kyl from his comfortable Senate appointment. Kyl reportedly has ambitions to become the Republican majority leader in the Senate following Senator Bill Frist's departure Both Republicans played a major role in ramming the Unlawful Internet Gambling Enforcement Act through Congress in the closing minutes of the pre-election session, angering millions of Americans who regard online poker and online gambling as an entertainment of choice. Reports today suggest that dozens of websites focusing on Arizona will join the campaign to unseat Kyl for his role in the attack on online poker and online gamblings' rights whilst his own state runs diverse forms of online gambling including state lotteries and Horse racing, which were excluded from the online gambling ban- so Kyl was really helping Horse racing and banning poker- what and insane bill. online poker and online gaming sites are urging their Arizona players to participate in the initiative, with one major operation claiming it has at least 5 000 Phoenix, Arizona online gambling and online poker players on its database that it will alert to the action. Jim Pederson has a very credible chance of beating Jon Kyl. We as poker players need to send Jon Kyl a very clear message that we are strong and we need to be represented as much as his special interests (lotteries and Horse racing). Please give any amount that you can. We can make a difference and show Senator Kyl that we won't stand for his hypocrisy. We as poker players sat by while Jon Kyl used national security as a political tool to push this legislation through. It won't happen again.

Issues focus on smoking, gambling, wages, the arts

 

Smoking. Gambling. A sin tax for the arts. An increase in the minimum wage. These are among the contentious issues voters here will decide at the ballot box November 7. Perhaps the most confusing for Ohio voters are statewide Issues 4 and 5. Both would limit smoking in public places, but to different degrees. Issue 4 is a constitutional amendment spearheaded by Smoke Less Ohio, a group supported by the tobacco industry and businesses that cater to smokers. It would allow smoking in bars, restaurants, bowling alleys and bingo halls, but ban smoking in almost all other public places. Because it is a constitutional amendment, it would overturn smoking bans currently in effect in 21 Ohio cities, including Columbus. Issue 5, sponsored by SmokeFree Ohio, a campaign of the American Cancer Society, would ban smoking statewide in all public buildings and workplaces. Exceptions include family-owned small businesses where all employees are related to the owner and where enclosed smoking areas are not open to the public. Also exempt would be outdoor patios, tobacco stores and nonprofit private clubs with no unaffiliated employees. Nursing homes and hotels also could designate smoking rooms. If both initiatives pass, Issue 4 would prevail because it is a constitutional amendment, while Issue 5 is merely a law. Because of the high stakes, Issue 5 supporters are working hard to explain that voters must defeat Issue 4. It is not enough to vote for Issue 5. For the SmokeFree measure to become the law in Ohio, voters must also vote against Issue 4. While Issue 4 supporters criticize the scientific validity of studies showing the harmful effects of secondhand smoke, they also say that well-ventilated areas in bars and restaurants protect non-smokers. But the latest report this summer from the U.S. Surgeon General says there is no safe level of secondhand smoke. Furthermore, employees in the hospitality industry have no choice but to breathe in secondhand smoke. Issue 5 supporters also note that smoking does not simply affect the smoker. Families and society also bear the costs associated with health care for smoking-induced illnesses, reduced productivity or death. The economic issues of banning smoking have been hotly debated. Bar and restaurant owners say smokers will stop patronizing them, costing jobs in the hospitality sector. Smokers, they claim, will buy liquor and drink at home where they can smoke. But studies in cities with bans have either shown that revenues have not decreased, or that declines in some businesses have been balanced by gains in others.

Today's minimum wage buys less than at any time in the last 50 years.

Ohio remains one of only 14 states that do not allow casino gambling.

Arts groups are struggling with declining ticket sales and lower donations in a stagnant economy.

Issue 5 supporters also note that smoking does not simply affect the smoker. Families and society also bear the costs associated with health care for smoking-induced illnesses, reduced productivity or death.

The economic issues of banning smoking have been hotly debated. Bar and restaurant owners say smokers will stop patronizing them, costing jobs in the hospitality sector. Smokers, they claim, will buy liquor and drink at home where they can smoke. But studies in cities with bans have either shown that revenues have not decreased, or that declines in some businesses have been balanced by gains in others.

Issue 2 would raise Ohio's minimum wage from $5.15 to $6.85 per hour starting Jan. 1; waiters and others who receive tips would see their base pay increase from $2.13 to $3.43 an hour.

Last spring, state legislators increased Ohio's minimum wage to the federal minimum of $5.15. That wage hasn't been changed in nine years; economists say today's minimum wage buys less than at any time in the last 50 years.

At $5.15 an hour, a full-time employee earns $10,712 annually, nearly $3,000 below the federal poverty level for a family of two. Relatively few Ohioans earn the minimum; about 300,000 are at that level. But that base wage sets the floor, in effect keeping hourly earnings low, say labor unions and religious, neighborhood and civil rights organizations who support Issue 2.

Opponents, including chambers of commerce, retail merchants, restaurateurs and other businesses, also object to the measure's fine print. They say it would open payroll records to scrutiny from unions and others, invading employees' privacy and burdening employers with additional record keeping.

Supporters point to the amendment's language, which specifically forbids disclosure of an employee's name without that person's permission. The federal minimum wage already requires such record keeping, they point out.

Critics also object to amending the Ohio Constitution to raise wages. Instead, they say, the legislature should act to increase the minimum wage.

Surveys show that most people think Ohio's minimum wage is too low, but opponents of Issue 2 say its annual adjustment for inflation is a bad idea. While Ohio's minimum wage is now below many other states, several rounds of inflation could boost labor costs here so high that businesses would choose to locate or expand elsewhere.

Supporters of Issue 2 emphasize that $5.15 an hour is not a living wage. Furthermore, better-paid employees are less likely to seek work elsewhere, which is better for businesses, they point out. Studies show that states with higher minimum wages have more job growth than those without the more generous wage protection, proponents say.

Supporters call Issue 3 "Learn and Earn" because the constitutional amendment would allow 31,500 slot machines at nine sites in Ohio; a portion of the revenue would go to college scholarships.

Gross annual revenue from slot machines will be $2.8 billion, proponents estimate. Slots operators would get 55% of any money not won by players. This 55% will be used to pay employee salaries and benefits, equipment, site operations, advertising, debt service and taxes. Estimated annual profits for each site would be about $20 million or $180 million total.

Of the remaining slots revenue, 30% would go for tuition scholarships to Ohio students attending Ohio colleges. Supporters estimate this at about $850 million; Ohio Office of Budget and Management estimates $324 million.

Eight percent (about $225 million) would go to economic development and capital projects, with Cleveland's share of that totaling about $75 million. Six percent (about $170 million) would increase purses at Ohio racetracks. One percent ($28 million) would go to gambling addiction services.

Issue 3 would allow slots at Ohio's seven racetracks as well as at two downtown Cleveland locations: Tower City, which is owned by Forest City Enterprises Inc., and at Nautica Entertainment Complex, operated by Jeff Jacobs. In 2010, voters here could expand the four Cleveland-area sites to offer full casinos with gaming tables. Downstate racetracks would not have that option.

Ohio gamblers spend over $1 billion annually at casinos in Indiana, West Virginia and Michigan, estimate supporters, who include many civic and business leaders. Ohio remains one of only 14 states that do not allow casino gambling.

Opponents, many of whom are also religious leaders and state officeholders, emphasize the downside of slots and casinos. Gambling will create more crime and more addicts, burdening social service agencies and county budgets. There's a finite amount of entertainment dollars; Issue 3 will just shift them from theaters and restaurants to slots parlors and casinos.

Revenues from gambling will not solve the educational funding crisis in this state, opponents say. It will only cloud the issue. However, proponents counter that Issue 3 forbids the Ohio General Assembly from using Learn and Earn proceeds to cut educational funding.

Critics point out that most of the profits will go to a handful of wealthy racetrack owners and slots operators, giving them a constitutionally mandated monopoly. Proponents counter that the slots parlors will pump billions into Ohio's economy and create up to 56,000 good-paying jobs with benefits. Cleveland could see 5,000 new jobs.

Ohio already has a lottery and other forms of gambling such as church bingo games, proponents note. Thus, it's hypocritical for religious leaders and others to oppose slots parlors.

This is the third time since 1990 that Ohioans have been asked to vote for a gambling provision. The last two gambling initiatives were defeated statewide by wide margins.

Issue 18 would raise the tax on cigarettes to provide funding for arts and culture in Cuyahoga County. The measure, which lasts for 10 years, would increase the tax per cigarette 1.5 cents, adding 30 cents to a pack.

Levy supporters estimate the tax will raise $20 million annually, even assuming a decline in cigarette purchases due to the higher price. The money would provide operating support for the county's 105 nonprofit arts institutions such as Great Lakes Theater Festival and the Maltz Museum of Jewish Heritage. It also will fund artist residencies and innovative projects by individual artists.

The county arts and culture organizations add over $1 billion annually to the local economy, supporters say, a larger economic impact than that of Cleveland's major professional sports teams. The arts groups also employ 3,000 people full-time and generate 7,000 jobs at related businesses.

Arts organizations here are struggling with declining ticket sales and lower philanthropic donations in a stagnant economy. They've lost support from major corporations who have departed the area. Furthermore, Cleveland is one of the few major metropolitan areas with little dedicated funding for the arts.

Most of the opposition to the measure comes from smokers, who feel they are being unfairly taxed again to pay for economic development. Excise or so-called sin taxes helped pay for the Gateway complex and Cleveland Browns Stadium.

Other opponents, who include small business owners, say the measure will hurt convenience stores, bars and gas stations. The drop in cigarette sales will cause them to layoff employees, thus adding to the unemployment rolls. Retail cigarette sales will drop, further hurting the economy, and tax revenues will decrease. Smokers will buy cigarettes online and out-of-county, delivering another blow to state and county tax revenues.

Other detractors point to the hypocrisy of saying Issue 18 will promote healthy living by reducing cigarette smoking at the same time it capitalizes on that behavior to finance arts organizations.

Getting much less attention than the other ballot initiatives is Issue 19, the 2.9-mill, four year, replacement tax for health and human services in Cuyahoga County. The measure is listed on the ballot as a tax decrease because the millage drops from 3.0 to 2.9. However, tax bills will increase if the issue passes because inflation has increased property values.

Homeowners would pay $397 annually on a $100,000 house, rather than the $359 they now pay. The $38 added tax would raise $27.3 million a year.

Among other county programs, the tax helps pay for MetroHealth Medical Center - its Metro Life Flight, Level One trauma center, and burn unit. The levy also funds home health care, hot meals and transportation for seniors, health care for infants and toddlers, foster care for abused children, and treatment for emotionally disturbed youth.

Gambling bank clerk jailed

 

Former Commonwealth Bank employee Erick Tjandra, 32, was jailed for a minimum three years on 37 counts of defrauding the bank. Over a 15-month period Tjandra stole $10.4 million from the bank, $8 million of which he "poured down the throat of the casino'', District Court Judge Christopher Armitage said today. The casino had allowed the bank clerk to play in the high-rollers room alone against the house, Judge Armitage said. ''(It was) the height of irresponsibility for the casino to have placed such a vulnerable person in the situation of gambling in what is called the Kerry Packer Room, against the house,'' he said. "He was not Kerry Packer, he is not ... an Asian prince. "He is a humble bank clerk who unfortunately developed a gambling addiction beyond his means.'' Tjandra was sentenced to five years' jail with a non-parole period of three years. He will be eligible for release in October 2009.

Internet Gambling Ban Protestors Headed to Washington D.C.

 

The voices talking so loudly against the Unlawful Internet Gambling Enforcement Act (UIGEA) on forums and blogs across are the internet will be leaving their keyboards on November 3-4 and will be headed to Washington D.C. to protest the latest US prohibition. The purpose of the demonstration will be to gain press coverage from major news organizations such as Fox, MSNBC, and CNN (who have all promised to attend the event) in order to get the message out to the general public before they vote. The message they are trying to get out to voters is that Republicans, led by the soon to be parting Senator Bill Frist, have begun a modern day prohibition by deceitfully attaching the ban to an unrelated piece of legislation on the last day of senate sessions. The fact that they attached the bill to unrelated legislation about Port Security, an issue that was impossible for anyone to vote against, angered other politicians about as much as it angered the 25 million American citizens who participate in online poker. "What could be a greater invasion of privacy than government telling you cannot play Internet poker in your own house?" congresswoman Shelley Berkley said. "This was a breathtaking abuse ... of power." "The ban on Internet gaming was part of the Republican family values agenda. They passed it to pound their chests and talk about how they're protecting America's youth," Berkley said. "You got a bunch of ideologues running Congress. They're not interested in anything that has a modicum of common sense; they're only interested in a very narrow moral position."

Berkley insisted that the protest expressing dissent will surely be heard by politicians and other Americans before voting time.

Debbie Richardson, the person instrumental in organizing the protest against the ban, has reported to us that over 250 people have confirmed they will be attending and that many singular people said they will be bringing groups along with them.

Poker (for chips only) will be played in the streets as part of the protest. There have been rumors that celebrities who support poker may show up, and other speakers are confirmed.

"We think we have enough people who confirmed showing up for the event that could fill up the square behind the White House," and that many people, Richardson explained, will get noticed by the press.

"The more people show up for the protest the more interest the press will show," Richardson said. She also expects a large number of people to attend who have not confirmed.

Friday, October 27, 2006

House shuffles gambling measure

 

The Pennsylvania Legislature was unable to finalize a long-awaited gambling reform bill Tuesday night after the House amended a number of provisions, including one it claims was the result of a Senate drafting error. The gambling reform bill was the second piece of major legislation on the agenda that lawmakers may be unsuccessful in finishing up before the November election because of overlooked errors. A negotiated bill on lobbyist disclosure fell apart after the Senate passed an amendment Monday night that accidentally used language from an earlier version. What exactly happened on gambling reform is in dispute. A top Republican Senate aid, Erik Arneson, said the change that mucked up gambling reform was not a mistake but rather the result of attempts to address concerns raised by House negotiators. That Republican aide, as well as a top Democratic aide, hinted that the Senate might return after all to clean up both bills, after swearing off the idea when the lobbyist disclosure bill error was discovered. "We will make some sort of announcement tomorrow," said Christopher Craig, chief counsel to Philadelphia Democrat Sen. Vince Fumo. On gambling reform, House members said a provision banning gambling applicants from contributing to state and local political campaigns left out the two racetracks which haven't been awarded licenses. They include Presque Isle Downs in Erie and the seventh outstanding racetrack that the state harness racing commission struck down for Beaver and Lawrence counties. Those two track licenses are now in court appeal. In a stunning move, the House voted unanimously to open the bill to amendments against the advice of House Republican Leader Sam Smith. "At this point in time, it is in the best interests of the people of Pennsylvania and this legislative body to put this bill on the governor's desk," Smith said from the floor. "If we amend this bill tonight there is no question this bill becomes a sine die session football." By sine die, Smith was referring to the lame duck legislative session after the November election and before the two-year legislative term ends.

But members bucked Smith after what some called a heated Republican caucus session, saying they had a responsibility to give Pennsylvanians a correct law. Some blasted late-night bill passing.

"We have been too careless in this Legislature over the past few years in how we go about drafting legislation," said Rep. Robert Freeman, a Democrat from Northampton County. "We put up with unnecessary midnight sessions. We put up with sloppy drafting and that is simply wrong."

The first amendment to correct the political contribution provision error came from a Democrat, Rep. Kevin Blaum from Luzerne County. That amendment opened the floodgates to three others, which effectively sunk the Senate-negotiated bill.

Blaum said he couldn't let the bill go to a vote with such a glaring error.

"Nobody talked to us" about what was going in the negotiated bill, Blaum later said. "And then this mistake was made and we're generously calling it a mistake. And we had to correct it."

Among the other changes was a removal of exemptions for gambling venues on local smoking bans, and restoring state power over riparian rights after the bill handed those rights over to gambling venues.

When asked whether the House was torpedoing a negotiated bill, Rep. Paul Clymer, a Bucks County Republican, said the changes were important.

"Members are seeing an important opportunity to make corrections to Act 71," the original 2004 gambling law, Clymer said. "We feel frustrated that time and again we wanted to put through this legislation."

But Craig said there was no reason to hold up the entire bill for one drafting error. He said the error actually came from a House attorney, who came up with the political contribution language.

Gambling Site Taking Bets on PS3 Launch

 

Gambling site Bodog has odds up for the Playstation 3 launch. While I'm intrigued, I think the person setting the odds and deciding on the bets needs to do a little more homework. The site still has bets up on whether the price will be changed before launch and whether the console will get approval by the FDA before launch. The only really interesting bet was on which game will sell the most copies on launch day. Bogdog has Madden as the favorite, followed by Need for Speed Carbon and then Resistance: Fall of Man. Sonic and then F.E.A.R. rounded out the list, with F.E.A.R. fetching 19 to one odds. What they really need to do is set odds for PS3, Wii and Xbox 360 console sales in November. That would be interesting Brian Crecente

Web Gambling Sites Raise Stakes in Europe as U.S. Enforces Ban

 

PartyGaming Plc, the world's largest online poker company, lost 75 percent of its revenue when the company shut down its U.S. sites to comply with a new law enforcing a ban on Internet gambling. That hasn't dented Chief Executive Officer Mitch Garber's optimism. ``Chaos breeds opportunity and we will seize that opportunity,'' Garber said on a conference call Oct. 20, when he laid out the Gibraltar-based company's strategy for international expansion, particularly in Europe. ``The European Union is run in a way that favors our business.'' The U.K., Italy and Belgium are opting to regulate Internet gambling, rather than outlaw it, as players turn increasingly to the Web. The EU is pushing countries to scrap any measures that protect domestic companies when those nations open their markets. On Oct. 12, regulators told members such as France and Austria to stop discriminating against international bookmakers and casinos. The changes may give U.S. gamblers more ways to evade the ban on Internet wagers at home, says William Eadington, a professor at the Institute for the Study of Gambling and Commercial Gaming at the University of Nevada at Reno. ``A sub-industry in circumventing the rules will evolve,'' Eadington says, pointing to the failure of Prohibition, which banned the sale of alcohol in the 1920s. ``American gamblers may find themselves pushed into a market that's in the hands of Europeans.'' Italy next year will let companies offer online lotteries, bingo and betting on sports or games of skill. The U.K. will begin licensing private Internet gaming sites in September. Belgium is working to change its legislation as well, and private companies are already allowed to offer sports betting in Austria.

U.S. Revenue

The world's biggest Internet gambling companies lost $7 billion of market value in a day after Congress passed legislation on Sept. 30 to prevent credit-card companies from collecting payments for online bets. U.S. President George W. Bush signed the law on Oct. 13.

PartyGaming stock has fallen 75 percent to 27 pence since the legislation was approved.

888 Holdings Plc, one of the world's biggest online casinos, gets about half its revenue from outside the U.S. and has fared better than many of its rivals. Shares of the company, which is also based in Gibraltar, have dropped 35 percent to 93.5 pence.

The U.S. accounted for half of the $12 billion Internet gambling market last year. New York-based gaming consultant Christiansen Capital Advisors LLC expects the global market to double to $24 billion by 2010. It said it hadn't revised its outlook to take into account the U.S. measures.

`Regulation, Not Prohibition'

Julian Easthope, an analyst at UBS AG in London, says it's too early to say which companies will be able to take advantage of opportunities in Europe because the regulations are still developing. The EU's gambling market is valued at about $70 billion.

Paul Renney, a partner specialized in the Internet at law firm Addleshaw Goddard LLP in London, says he expects lobbying to increase to open the EU market further.

``European countries like the U.K. that take a more enlightened approach of regulation, not prohibition, stand to gain,'' he says.

There are still pockets of resistance. The leaders of Germany's 16 regions last week proposed banning all private betting companies, including Internet and traditional operators, and to extend the government's betting monopoly to almost all forms of gambling.

Soccer Jerseys

France on Sept. 15 detained the co-CEOs of Vienna-based Bwin Interactive Entertainment AG for three days on charges of violating gaming laws. A court in the Paris suburb of Nanterre will decide whether to charge them within a year, according to the company, which says its Gibraltar license gives it the right to operate across Europe.

``Money games in France are very strictly regulated,'' French Budget Minister Jean-Francois Cope told reporters on Sept. 19. ``It's not an economic activity like any other, and it's out of the question to let it explode in an unconscious manner.''

The government may jack up fines on international firms that advertise their services in France from 4,500 euros ($5,655) to five times ad costs, possibly including sports sponsorships, he said. The French soccer league has banned Bwin from putting its logo onto AS Monaco's jerseys, while stopping 888 from backing Toulouse FC, citing the risk of legal proceedings.

The French state's role in controlling the country's $24 billion gambling market has evolved little since 1539.

French Charlatans

That's when King Francois I established a lottery in Paris to stamp out ``charlatans'' so his subjects didn't ``spend their time, labor, virtues and necessaries in games of hazard,'' according to the Web site of La Francaise des Jeux, France's state-controlled lottery.

Challenges to its authority, however, have multiplied.

Paris-based Groupe Partouche SA, operator of the Cannes Palm Beach casino, in March filed a complaint with the European Commission alleging unfair competition by La Francaise des Jeux, which is allowed to operate on the Internet. Partouche is considering going on line in Belgium when the law changes there.

``We just want to do our job on line as a casino operator,'' says Frederic Vinzia, head of Partouche Interactive. He estimates there are 2 million French people who gamble on line. ``It's a tremendous opportunity.''

In May, gambling was excluded from an EU accord to dismantle national barriers to providing services across the trade bloc.

Falling State Monopolies

PartyGaming's Garber says countries like France and Germany will only be able to hold out for so long. PartyGaming is developing multilingual Web sites and putting together marketing campaigns in new markets, Garber said. He declined to be more specific.

``The gaming and lottery monopolies are the last to fall, and they are falling and will fall,'' he said. ``You're going to see a lot more tolerance in Europe.''

Paddy Power Plc, Ireland's largest bookmaker, may open gaming Web sites in Italy, Spain and Poland to take advantage of the legislative changes, Chief Executive Officer Patrick Kennedy said in an interview in Dublin on Oct. 24. The company started a German language service in April.

The European Commission put Italy, Germany, Hungary, the Netherlands, Sweden, Denmark and Finland on notice in April for letting state lotteries offer online sports betting, while barring rivals. On Oct. 12, Financial Services Commissioner Charlie McCreevy targeted France and Italy for shielding domestic sports bookmakers, and scolded Austria for restricting advertising by foreign casinos.

Harrah's in London

The actions represent an initial threat, which would be followed by a more detailed opinion before the commission could file suit at the EU's highest court in Luxembourg. Poland separately got a final warning before a possible lawsuit for taxing foreign lottery winnings more than domestic jackpots.

``Internet gaming is here to stay,'' says Andrew Lynch of Schroder Investment Management, which owns more than 5 percent of Groupe Partouche. ``There's going to be plenty of saber rattling and fighting talk by the government monopolies, but it's a trend that's going to happen.''

The changes in national gambling laws in Europe are part of efforts to boost competition in an industry long dominated by state monopolies.

Italy, where online poker will continue to be banned, is increasing the number of betting outlets and letting bars and restaurants take wagers.

The U.K. legislation allows for 17 new casinos, one of which will be Europe's first ``mega'' casino, with about 1,250 slot machines. That's sparked a flurry of acquisitions including the $570 million offer for London Clubs International Plc by Las Vegas-based Harrah's Entertainment Inc.

`Security and Prestige'

Licensed sports betting companies in the U.K. take Internet wagers under a 1963 law that lets them do business by phone. In 2001, the country scrapped a tax on gamblers' winnings and replaced it with a 15 percent tax on gaming companies' gross profits to help U.K. enterprises such as William Hill Plc compete with overseas rivals and bring offshore companies back inland.

The U.K. Gambling Act approved last year will extend the Internet licenses from bookmakers to gaming companies. Chancellor of the Exchequer Gordon Brown may include fiscal incentives in the 2007 budget for offshore operators to seek the new licenses.

Online Gambling community plans assault on Jon Kyl

 

As a co-sponsor of a bill that was signed into law two weeks ago by President Bush, Jon Kyl, the Republican Senator from Arizona, has worked hard over the years to abolish online gambling utilizing the "family values" front. The current law would look to severely cut off some forms of online gambling via credit card transactions, though the banking sector has already condemned the law, claiming it would be close to impossible for the banks to monitor online gambling transactions. Gambling911.com has also learned from top government sources that President Bush almost didn't sign the internet gambling legislation. Bush reportedly told key members in his administration that he did not want to sign off on an "unrelated" internet gambling provision that arrived to his desk as an attachment to a much more important port security bill. While hopes were high, the President ultimately signed off on the entire package though making no mention of the measure pertaining to online gambling. That measure was spearheaded by Senator Jon Kyl and forced through Congress on the coat tails of the port security bill (courtesy of Senate Majority Leader Bill Frist) during the final Friday late night session before Election Day recess early this month. Both Frist and Kyl have claimed that online gambling is like "crack cocaine" that gets in the way of a family's well-being, yet they ensured carve-out niches for horse racing and state lotteries, something viewed as highly suspect among the online gambling community. Other politicians likewise expressed dismay over the attached piece of legislation that appeared without warning and could not get passed on its own. Some, like Nevada Representative Shelley Berkley, voiced outrage over the internet gambling provision's inclusion while Senate Republicans removed other measures from the "port bill" that would help bolster rail and mass transit security. Even the original sponsors of the port security bill spoke out against the internet gambling provision add-on. In the coming days, the online gambling community is planning a massive protest against Senator Jon Kyl in the state of Arizona. Dozens of websites focusing on the sector will be publishing a message alerting Arizona voters and online gambling enthusiasts as to Senator Kyl's role in trying to abolish internet poker, sports betting an online casino games while ensuring the protection of his own state lottery.

Many of these sites, including prominent online gambling establishments that operate outside the United States, will be sending the powerful message to all of its Arizona customers. One large sports betting firm has disclosed that based on last year's numbers they had just over 5000 registered users in the city of Phoenix alone.

"The industry as a whole must take a stand to show how powerful we are and that politicians with their own self-agendas need to be held accountable for their actions," said a prominent member of the online gambling community who is one of many organizing the campaign against Jon Kyl.

It is a campaign that can work. Internet gambling has become a billion dollar industry that, contrary to popular opinion among some political foes, fuels the US economy through ad deals, sponsorship events and most notably works in conjunction with Las Vegas.

"The Vegas casinos once despised our industry. This year they lobbied heavily to prevent the passage of the internet gambling legislation. It was once believed that online casinos would negatively affect Las Vegas since gamblers could now play casino games without leaving the comfort of their homes. Quite the opposite has occurred. Online gambling has only helped to fuel interest in Vegas as the ultimate casino gaming experience. It's really no different than being able to rent movies two or three months after a film's release. That hasn't stopped the box office from realizing record breaking numbers year after year."

Over the past few weeks, Jon Kyl has watched a solid lead evaporate. Democratic challenger Jim Pederson has now closed within 6 percentage points of Kyl.

"The online gambling community will narrow that gap even further and anyone who underestimates our influence is in for quite a surprise," predicts the prominent industry representative. "Nine percent of Arizona voters said they were undecided and we believe many of these are individuals who love gambling online and will be inclined to vote against anyone looking to take away their rights."

The effort on behalf of the internet gambling sector also looks to address concerns over prohibition that stretches beyond the gaming landscape.

Legalized Video Gambling Draws New Interest After Raids

 

Some lobbyists pushing to legalize electronic gambling machines are finding a more receptive audience in eastern Indiana where authorities raided more than 20 taverns accused of violating the law. Indiana Licensed Beverage Association officials drew about 40 bar and restaurant owners to a meeting Tuesday. It was one of a series of public meetings around the state to persuade lawmakers that they should legalize video gambling when the General Assembly convenes in January. The group's president, Don Marquardt, says enforcing the law in taverns is driving the video gambling machines into other venues such as convenience stores, where state excise police lack authority.

Drunkenness, Gambling, A Societal Canker?

 

Rev. Frank Dei, who made the disclosure said the consumption of alcohol and drugs was threatening not only the health and education of the youth, but also their productivity. The Rev, Minister's observations are borne out on a regular basis by reports of students and young people engaging in binge drinking. Just last week, eighteen final-year pupils of Adankwame Basic School who were allegedly found drunk and engaged in gambling on the school premises were suspended by the school authorities. They included six girls, who also reportedly stole large quantity of bread from a nearby grocery in the company of 12 boys who also engaged in gambling. Mr. John Yidanbla Tayari, Headteacher of the school told a meeting arranged by the Atwima-Nwabiagya District Education directorate aimed at finding solutions to the reported acts of indiscipline at Adankwame. The meeting was attended by the local School Management Committee (SMC), Parent-Teacher Association (PTA), unit committee members, chiefs, teachers and other opinion leaders. Although the culprits' parents had been invited to the meeting, they did not show up. Mr. Richard Owusu-Agyemang, the District's Community Participation Co-ordinator, condemned the acts of the pupils and the refusal of their parents to attend the meeting. He said it was the responsibility of parents to inculcate moral values and discipline in their children and that the boycott of the meeting by the parents was not only a mark of disrespect to the school authorities but also an endorsement of the pupils' indiscipline acts. He warned that the directorate will not tolerate indiscipline in the School and urged the chiefs, SMCs and PTAs to help in addressing the situation.

Thursday, October 26, 2006

Pa. House makes more changes to slot-machine gambling law

 

The unanimous vote kept the bill from going to Gov. Ed Rendell. It also continued a volley between chambers that has lasted for much of the past year over how to fix problems identified by critics of the state's 2-year-old gambling law, with one chamber often dropping pet provisions written by the other. House Majority Leader Sam Smith, R-Jefferson, said he sympathized with colleagues who were dissatisfied with the Senate's version, but warned that further revisions could scuttle passage of a final bill before the legislative session ends Nov. 30. "There's a limit to how many times we can bounce this ball back and forth across this building," Smith said. "If we amend this bill, this bill then will be sitting in the Senate in the lame-duck session, and at that juncture, all bets are off ... as to whether or not we will actually be able to get a very solid reform bill in front of this governor this session." Senate leaders were reviewing their options and expected to announce a plan on Wednesday, said Erik Arneson, chief of staff to Senate Majority Leader David J. Brightbill, R-Lebanon. Christopher Craig, a lawyer for Sen. Vincent Fumo, D-Philadelphia, said one possibility would be "to come back in before Election Day to put together another version" of the bill. The Senate passed its version of the gambling-law revisions during a marathon session that stretched from Monday to early Tuesday as members rushed to complete major business and adjourned until after the Nov. 7 election. With just two weeks remaining, legislators were eager to return to their districts to campaign in a volatile election year. Both houses have agreed to changes that would require the state Attorney General's Office to form a gambling-crimes unit, wipe out a requirement that slot-machine manufacturers sell through an in-state distributor, and delete language in the current law that allows public officials to directly own up to 1 percent of a gambling interest.

But they have disagreed over many other provisions. The version approved by the House includes provisions not endorsed by the Senate, such as banning campaign contributions from applicants for horse racetrack licenses and requiring casinos to comply with local ordinances banning indoor smoking.

The House version also allows the Legislature, rather than the state, to decide whether to transfer state-owned riverbed property rights to casinos.

Rep. Kevin Blaum, D-Luzerne, called the absence of a ban on campaign contributions a "serious, serious flaw."

"If this bill ever did go to the governor's desk and obtained his signature, it would be open season on unlimited campaign contributions from all those applicants," Blaum said.

The Senate has consistently supported broad campaign-contribution prohibitions, and its version of the bill does not allow any gambling license applicants or licensees to make such contributions, Arneson said.

"It is beyond unfortunate that a nonexistent problem was used as the stated reason to amend a bill that was ready to be sent to the governor and included absolutely vital reforms to the gambling law," Arneson said in a statement.

The House did not change a provision of the Senate bill that would force casino developers to follow local zoning procedures and allow zoning appeals to go to the state Supreme Court.

Pa. House makes more changes to slot-machine gambling law

 

The unanimous vote kept the bill from going to Gov. Ed Rendell. It also continued a volley between chambers that has lasted for much of the past year over how to fix problems identified by critics of the state's 2-year-old gambling law, with one chamber often dropping pet provisions written by the other. House Majority Leader Sam Smith, R-Jefferson, said he sympathized with colleagues who were dissatisfied with the Senate's version, but warned that further revisions could scuttle passage of a final bill before the legislative session ends Nov. 30. "There's a limit to how many times we can bounce this ball back and forth across this building," Smith said. "If we amend this bill, this bill then will be sitting in the Senate in the lame-duck session, and at that juncture, all bets are off ... as to whether or not we will actually be able to get a very solid reform bill in front of this governor this session." Senate leaders were reviewing their options and expected to announce a plan on Wednesday, said Erik Arneson, chief of staff to Senate Majority Leader David J. Brightbill, R-Lebanon. Christopher Craig, a lawyer for Sen. Vincent Fumo, D-Philadelphia, said one possibility would be "to come back in before Election Day to put together another version" of the bill. The Senate passed its version of the gambling-law revisions during a marathon session that stretched from Monday to early Tuesday as members rushed to complete major business and adjourned until after the Nov. 7 election. With just two weeks remaining, legislators were eager to return to their districts to campaign in a volatile election year. Both houses have agreed to changes that would require the state Attorney General's Office to form a gambling-crimes unit, wipe out a requirement that slot-machine manufacturers sell through an in-state distributor, and delete language in the current law that allows public officials to directly own up to 1 percent of a gambling interest.

But they have disagreed over many other provisions. The version approved by the House includes provisions not endorsed by the Senate, such as banning campaign contributions from applicants for horse racetrack licenses and requiring casinos to comply with local ordinances banning indoor smoking.

The House version also allows the Legislature, rather than the state, to decide whether to transfer state-owned riverbed property rights to casinos.

Rep. Kevin Blaum, D-Luzerne, called the absence of a ban on campaign contributions a "serious, serious flaw."

"If this bill ever did go to the governor's desk and obtained his signature, it would be open season on unlimited campaign contributions from all those applicants," Blaum said.

The Senate has consistently supported broad campaign-contribution prohibitions, and its version of the bill does not allow any gambling license applicants or licensees to make such contributions, Arneson said.

"It is beyond unfortunate that a nonexistent problem was used as the stated reason to amend a bill that was ready to be sent to the governor and included absolutely vital reforms to the gambling law," Arneson said in a statement.

The House did not change a provision of the Senate bill that would force casino developers to follow local zoning procedures and allow zoning appeals to go to the state Supreme Court.

Gambling money, false ad claims fly

 

Alabama's Supreme Court chief justice race is boiling, with incumbent Drayton Nabers Jr. accusing challenger Sue Bell Cobb of taking gambling money, and Cobb claiming Nabers was forced to pull a false ad. The nation's most expensive state Supreme Court race is getting more expensive. Both sides in the tight race plan more TV ads for the final two weeks before the Nov. 7 election. So far, Cobb and Nabers have spent almost $2 million on TV ads, according to the Brennan Center in New York, which tracks ad spending in court races nationwide. The candidates promise clean campaigns but accuse each other of violating the pledges. "The negative ads are going to continue," said Larry Powell, professor of communications at the University of Alabama at Birmingham and a former political consultant. "The only question is: Are they going to continue right up to Election Day?" Tuesday, Cobb renewed her call for Nabers to sign a State Bar of Alabama committee agreement on ethical campaigning. She also said she was disgusted by Nabers' television ads. "The people of Alabama are sick of this and we are, too," said her campaign manager, Sabrina Lofton. "We will continue our message of qualifications and experience, because that's what this race should be all about."

Nabers' campaign responded by accusing Cobb of violating judicial ethics in her own TV ads by lying about her opponent. Nabers issued his own pledge to run an ethical campaign but reserved the right to respond to attacks.

"It is the height of hypocrisy to talk about campaign pledges when they are knowingly running ads that are untruthful," said Nabers' campaign manager, Clay Ryan. "We consistently offer hard evidence in our campaign ads. I have yet to see that from Judge Cobb's campaign."

Shanghai gangster gets death sentence for drug trafficking, gambling, other crimes

 

The man said to be Shanghai's "top gangster" has been sentenced to death for drug trafficking and other crimes. The Shanghai No. 2 Intermediate Court found Li Bin, 40, guilty of leading a criminal organization, trafficking in drugs, organizing attacks and illegally possessing weapons, the Shanghai Daily reported. It said that Li's wife and 18 members of his gang were sentenced to prison terms ranging from 15 months to life. Li, who dubbed himself the city's "top gangster," had spent 15 years in prison when he was released from jail in 2001 and took over an entertainment center in Shanghai's suburb of Baoshan, where he operated a gambling and "drug taking" den, the report said. It said Li's gang took in nearly 3 million yuan (US$380,000;?304,000) in online gambling proceeds, in addition to his profits from dealing in illicit drugs.

Drunkenness, gambling.Growing problems in schools

 

Rev. Frank Dei, who made the disclosure said the consumption of alcohol and drugs was threatening not only the health and education of the youth, but also their productivity. The Rev, Minister's observations are borne out on a regular basis by reports of students and young people engaging in binge drinking. Just last week, eighteen final-year pupils of Adankwame Basic School who were allegedly found drunk and engaged in gambling on the school premises were suspended by the school authorities. They included six girls, who also reportedly stole large quantity of bread from a nearby grocery in the company of 12 boys who also engaged in gambling. Mr. John Yidanbla Tayari, Headteacher of the school told a meeting arranged by the Atwima-Nwabiagya District Education directorate aimed at finding solutions to the reported acts of indiscipline at Adankwame. The meeting was attended by the local School Management Committee (SMC), Parent-Teacher Association (PTA), unit committee members, chiefs, teachers and other opinion leaders. Although the culprits' parents had been invited to the meeting, they did not show up. Mr. Richard Owusu-Agyemang, the District's Community Participation Co-ordinator, condemned the acts of the pupils and the refusal of their parents to attend the meeting. He said it was the responsibility of parents to inculcate moral values and discipline in their children and that the boycott of the meeting by the parents was not only a mark of disrespect to the school authorities but also an endorsement of the pupils' indiscipline acts. He warned that the directorate will not tolerate indiscipline in the School and urged the chiefs, SMCs and PTAs to help in addressing the situation

Legalized video gambling draws new interest after raids

 

Lobbyists pushing to legalize electronic gambling machines are finding a more receptive audience in eastern Indiana after authorities raided more than 20 taverns accused of violating the law. Indiana Licensed Beverage Association officials drew about 40 bar and restaurant owners to a meeting Tuesday. It was one of a series of public meetings around the state to persuade lawmakers that they should legalize video gambling when the General Assembly convenes in January. "We don't feel like it's good public policy to enforce the law only on selected taxpayers," said Don Marquardt, president of the Indianapolis-based trade group. Enforcing the law in taverns is driving the video gambling machines into other venues such as convenience stores, where state excise police lack authority, he said. The trade group used to have a difficult time finding support for legalized gambling in the Muncie and Anderson area. "Not everyone has been behind it," Marquardt said. "(They said) 'Why legalize when illegally we're doing great?'" Then came the raids last month in which authorities shut down 23 taverns in Madison, Delaware and Henry counties after an investigation into what police said was a gambling ring operated by John Neal, a former state Teamsters chief. Neal, 69, of rural Yorktown, remains in jail under a $2 million cash bond. The legalization proposal would impose taxes - which the state currently doesn't collect on the illegal machines - and an annual fee of $500 to $1,000. Counties would split the revenues with the state. Dale Vold, of the Yorktown American Legion, said he was not sure whether the annual fee in the proposal made sense for his organization. "I'm trying to figure it out," he said. "We really don't make very much, and if they want an exorbitant fee, we're not going to pay to do it."

Ban Won't Stop Online Gambling

 

Gamblers may look over their shoulder now, but experts say a new Internet gambling ban won't keep bettors from ponying up, just turn them on to overseas payment services out of the law's reach. "It has put a terrible scare into people," said I. Nelson Rose, who teaches gambling law at Whittier Law School. "But it won't by any means wipe out Internet gambling." The fright swept through the $12 billion industry on the heels of the recent arrests of two gambling company executives and a new law President Bush signed Oct. 13 that seeks to ban most online gambling and criminalizes funds transfers. The law has wiped out billions of dollars in shareholder value of British companies, leaving the industry's future in doubt as U.S. lawmakers initially trumpeted they had found a way to halt bets coming from America. But serious questions remain about whether the legislation can be effective in stopping U.S. residents from playing poker or betting on sports. The "Unlawful Internet Gambling Enforcement Act" goes after the money, not the millions of players, which would be nearly impossible to enforce. It will essentially try to choke off the way Americans fund their gambling habits, hoping to prevent the transfer of dollars to the popular Internet sites. It's also widely understood that the law has online poker in its gun sights, identifying it as a game of chance something the poker companies dispute. They believe poker is a game of skill and therefore not subject to the new rules. But they're fearful nonetheless. "Their mission is to kill the funding of online poker, and that's what this law does," said Mike Sexton, who hosts the popular World Poker Tour and has won millions as a professional player.

The new law comes amid an explosion in online gambling, fueled by the Texas Hold 'em craze and widespread access to the Internet. In addition, dozens of Web sites have sprouted up that allow any gambler with a credit card to bet on any sport they choose, for any amount of money they want.

Wednesday, October 25, 2006

Law stops Internet gambling payments

 

Congress has passed a provision outlawing payments to Internet gambling sites by banks and credit card companies. Congress approved a bill to bolster port security Sept. 30, and attached to this "must-pass" bill is a special provision that would make it illegal for credit card companies and banks to transfer funds to online gambling companies. The law has been described as a "must-pass" after the controversy over a Dubai-based company controlling some of the country's major ports. Internet gambling has long been a target of conservatives and, in particular, Republican Majority Leader Bill Frist of Tennessee. The House passed a similar provision earlier this year, but the measure stalled in the Senate where Frist supported it. The bill is currently awaiting President George W. Bush's signature. Bush is not expected to veto the measure. "I think this is just a smokescreen because they're afraid of the backlash," senior Jason Rose said. "Instead of just coming out and passing a law that makes it illegal for anyone under 21 to gamble, they stick it on this port bill because they're scared." In fact, Internet gambling has been a target of Congressional conservatives for some time now. Similar measures have been proposed and passed but have always hit roadblocks in the past. As of late July this year, the House passed a provision that would have banned online gambling, but the Senate rejected it. While the bill would make it more difficult for people to gamble online, there are ways around the restrictions imposed by the bill. Credit card companies and banks are banned from making direct payments to gambling Web sites, but services such as the popular NETeller are not expected to be impacted as of now. The company provides a money transfer service.

It is doubtful that the United States will ever be successful in outlawing Internet gambling, especially under pressure from the World Trade Organization (WTO). The WTO has instructed the United States to refrain from blocking players in the country to use the mostly Antigua-based gambling sites, located around the Dominican Republic and Puerto Rico.

Most of the companies associated with the industry are based off shore and thus are exempt from U.S. regulations and laws. This includes both gambling Web sites and money transfer sites, causing the new legislation to have a minimum impact on the online gambling business.

"Why should NETeller comply with U.S. regulations?" professor I. Nelson Rose, author and a leading expert on gambling law, asked. "The U.S. and state Attorneys General can get court orders preventing ISPs [Internet Service Providers] from hosting sites that transfer money, but NETeller is not hosted by a U.S. server. Foreign nations are not usually required to enforce U.S. injunctions."

It seems that while the bill will make it harder for more casual gamblers to place their bets online, the majority of more seasoned players will remain unaffected and any who so desire can still gamble by signing up for one of these money transfer sites.

Gambling raid in Carencro

 

A year-long investigation into suspicions that a Lafayette was conducting illegal gambling has ended with the arrest of its owner and manager. State troopers arrived at Jim's Lounge yesterday with a search warrant and at least two arrest warrants. Trooper Willie Williams says owner Patti Matthieu and manager Norma Joubert were arrested on one count each of illegal gambling. Williams said when investigators arrived they found a game of bourrDe (Boo-Ray) under way with about 20 participants. All of the players were held and identified but none arrested. Williams says the problem was that the house was taking a cut of the pot. The game itself is legal to play. Trooper say there were three tables inside of the lounge and the games were being played at least three days a week and sometimes four or five times. Williams says for each five dollar ante, the house made ten dollars and for each ten dollar ante the house brought in 80 dollars.

Tribal leaders say governor is blocking new gambling compacts

 

The United Sioux Tribes held a special meeting on Thursday to discuss frustrations with state negotiations over tribal gaming compacts in which a national media campaign against the state was considered. "I don't think people across the country are gonna like what the governor is doing in this state, and I think this should go nationwide," John Peebles, the tribe's attorney, said during the meeting at the Ramkota. Rounds was invited to attend the meeting through personal invitation and through a recent statewide media campaign including a newspaper ad stating, "Governor Rounds, we've listened to you, why aren't you listening to us? It's time to talk face to face." Rounds declined the invitation. Currently, the Flandreau Santee Sioux Tribe's gaming compact with the state is expired, and, according to tribal attorneys, Rounds and his representatives refuse to negotiate another compact, which was the premise for this special meeting. The gaming compact would have automatically renewed if the tribe had not asked to negotiate a new agreement, which includes 500 new gaming machines to be used to bring in revenue for other developments including a new resort, hotel and family recreation center. According to the governor's press secretary, Mark Johnston, the governor has said he would be willing to look at a compact if presented with one. Peebles said that during negotiations that took place in May, the governor was asked to sign a compact but refused. While considering its options, the tribes had discussed banding together in opposition to video lottery in response to the state's actions.

"But they will remain neutral on video lottery. They didn't want to get into anybody's business," said Clarence Skye, executive director of the United Sioux Tribes. "But they do want the legislature to say either by resolution or proclamation that they support these expansions. The governor has refused to meet with them, he claims he has taken care of that through his negotiators, and that's not true."

Skye said he received a letter from Rounds' office saying the governor and his designated compact representatives would not attend Thursday's meeting.

Previous negotiations between these representatives and the tribes have not gone well.

Those in attendance at today's meeting were outraged by a comment made on Sept. 20 by John Guhin, a representative from the attorney general's office.

According to Skye, Guhin remarked that the "Indian people of South Dakota are not citizens of the state."

Guhin said that statement was false.

Peebles said during Thursday's meeting he is less than impressed with the state's reasons for its unwillingness to negotiate a new contract.

"We are constantly being told by the state that South Dakota is a state of limited gaming, but we are actually at the top of the list in regard to the number of gaming machines here," Peebles said. "South Dakota was found to be third in the nation based on an analysis of lowest population per gaming position and we were only after Nevada and Montana."

Fred Assam, another tribal attorney, said it is a state statute that declares public policy will be to preserve free enterprise.

"But if you don't have the capital, which for the tribes is acquired through gaming machines, you won't have the ability to pay off the debt to develop, therefore it limits tribal government's ability to expand and build quality facilities. So their ability to get financing resources and develop economically is directly related to these short term compacts with the state," said Peebles. "All we want to do is go to the bank and borrow the money to build and then pay back the loan, just like everybody else does. What gives here?"

One tribal representative, Robert Cournoyer, chairman of the Yankton Sioux Tribe said dealings with the state have been "archaic" and wondered if economic development was "just for white people".

Sebelius talks immigration, gambling, vice president speculation in KCK visit

 

Kansas Gov. Kathleen Sebelius said Thursday that she's flattered to be considered a viable vice presidential candidate in two years, but for now she's satisfied focusing on her re-election campaign before the state votes on Nov. 7. "I'm just focused on the next 19 days," Sebelius said Thursday. "I think there are incredible opportunities in this state. I am so excited after having the chance (to) patch together a system that was broken. I've been so honored to serve as governor and it's always complimentary to have nice things said about us nationally, but it's really about a great team of people who have done a lot of work." Sebelius visited with members of the Kansas City Kansan's editorial staff on Thursday, one of several stops for her in the Kansas City area, including a ribbon cutting at a new warehouse at Nebraska Furniture Mart Thursday morning. Speculation about Sebelius being considered a vice presidential candidate on the Democratic ticket in 2008 and beyond has been heating up nationally as Sebelius rakes in accolades for her work as governor. But before deciding whether to step onto the national stage, Sebelius is working to defeat State Sen. Jim Barnett, her Republican challenger in the gubernatorial race. Sebelius said Thursday that her opponent is too pessimistic when it comes to the state's economic outlook. "I get frustrated with his presentation that Kansas is a difficult place to do business and has a bad economic situation," she said. "First, I don't think it's accurate. Second, I think it's the worst thing to do as an ambassador from Kansas. I like to talk about the reality of what's happened in the last four years and the progress we have made."

On the local front, Sebelius said the state could help Wyandotte County with an important economic issue: training an available workforce in the eastern part of the county for available jobs in the west.

"There are definitely training dollars in place," she said, "but what we've tried to do, and it's been successful in other areas, is try to reorganize a workforce training program. It puts together community colleges and the business community with the Department of Commerce. If there are training needs not being met, we're happy that the Kansas First project is available to put people at the table and say, 'Where are they missing skills? Who do we need? How do we recruit them?'"

Sebelius said she "absolutely" still supports the addition of slot machines at The Woodlands race track in Kansas City, Kan., and hopes someday to see it become a reality - even though the state legislature has voted the issue down over a dozen times.

"We have gotten very close," she said. "I tend to be optimistic. I hope (legislators) continue to hear from their constituents, because when I travel around the state the input is pretty strong."

She also supports other forms of gambling in the state, including possibly placing one of two "destination" casinos in Wyandotte County.

"It doesn't make any sense to me that we are shipping hundreds of millions of dollars to Missouri, and now to Oklahoma, or carting it to Las Vegas," she said. "Kansans like to gamble. What we have is all the issues dealing with gambling but none of the revenue, so I am looking for a legislative breakthrough that would allow local communities to have a chance to vote."

Sebelius says states need to work together to find solutions for illegal immigration. She also said employers have a responsibility to follow the law.

"Some employers intentionally hire illegal workers to beat the competition, and frankly, that's one of the areas the state can really do something about," she said. "I think we need to take that seriously. It's unfair to competition and unfair to workers here in the workforce.

"I think we need a national comprehensive discussion, whether it's talking about what we're doing at the border or those 14 million who are already here and who have families here. We need a comprehensive solution. That isn't something we can deal with state by state."

When the Kansas Supreme Court ruled earlier this year on the state's education funding package, some local urban school districts were disappointed with the ruling. Sebelius said Thursday that local schools weren't the only ones disappointed, but she also said funding could continue to get better in the future.

"I don't think there's any question, whether it's the KCK School District, or Sedgwick County or Shawnee Mission, that they are light years ahead of where they were," she said.

In Thursday's visit, Sebelius also spoke about the State Board of Education, embryonic stem cell research, the keys to continued economic growth and other issues.

New Gambling Machines

 

The state's slot machine venues have found a way to bypass the state's prohibition on casino-style table games. They are about to introduce video gambling that recreates the experience of playing blackjack or poker around a table. The multi-player machines arrived this week at Delaware Park, Dover Downs and Midway Slots at Harrington Raceway. They are expected to be put into service in a few days. The new games allow up to six people to play at the same time while seated in a semi-circle. The state's Lottery office says the games enhance the social aspect of gambling, allowing players to interact.

Gambling losses for SkyCity affects profit

 

Four months into the financial year, Sky City Entertainment Group has forecast flat profits in FY07. The projected profit range of $100-$110 million, essentially flat on the 2006 results, has been affected by weaker trading conditions, gambling losses and a stronger New Zealand dollar affecting tax payments. Weaker trading conditions have dragged revenues down at the Auckland gaming and entertainment complex. The Auckland casino has also been unlucky on VIP commission table games. The year to date, after tax results from these games is $9.1 million below what would normally be expected. The recent strengthening of the New Zealand dollar against the Australian dollar has the potential, if sustained, to increase the company's base tax rate for FY07 by up to two percentage points. The projected profit range for FY07 assumes that a 30 percent tax rate will apply and that VIP commission play outcomes will return to normal patterns.

Law stops Internet gambling payments

 

Congress has passed a provision outlawing payments to Internet gambling sites by banks and credit card companies. Congress approved a bill to bolster port security Sept. 30, and attached to this "must-pass" bill is a special provision that would make it illegal for credit card companies and banks to transfer funds to online gambling companies. The law has been described as a "must-pass" after the controversy over a Dubai-based company controlling some of the country's major ports. Internet gambling has long been a target of conservatives and, in particular, Republican Majority Leader Bill Frist of Tennessee. The House passed a similar provision earlier this year, but the measure stalled in the Senate where Frist supported it. The bill is currently awaiting President George W. Bush's signature. Bush is not expected to veto the measure. "I think this is just a smokescreen because they're afraid of the backlash," senior Jason Rose said. "Instead of just coming out and passing a law that makes it illegal for anyone under 21 to gamble, they stick it on this port bill because they're scared." In fact, Internet gambling has been a target of Congressional conservatives for some time now. Similar measures have been proposed and passed but have always hit roadblocks in the past. As of late July this year, the House passed a provision that would have banned online gambling, but the Senate rejected it. While the bill would make it more difficult for people to gamble online, there are ways around the restrictions imposed by the bill. Credit card companies and banks are banned from making direct payments to gambling Web sites, but services such as the popular NETeller are not expected to be impacted as of now. The company provides a money transfer service.

It is doubtful that the United States will ever be successful in outlawing Internet gambling, especially under pressure from the World Trade Organization (WTO). The WTO has instructed the United States to refrain from blocking players in the country to use the mostly Antigua-based gambling sites, located around the Dominican Republic and Puerto Rico.

Most of the companies associated with the industry are based off shore and thus are exempt from U.S. regulations and laws. This includes both gambling Web sites and money transfer sites, causing the new legislation to have a minimum impact on the online gambling business.

"Why should NETeller comply with U.S. regulations?" professor I. Nelson Rose, author and a leading expert on gambling law, asked. "The U.S. and state Attorneys General can get court orders preventing ISPs [Internet Service Providers] from hosting sites that transfer money, but NETeller is not hosted by a U.S. server. Foreign nations are not usually required to enforce U.S. injunctions."

It seems that while the bill will make it harder for more casual gamblers to place their bets online, the majority of more seasoned players will remain unaffected and any who so desire can still gamble by signing up for one of these money transfer sites.

Tuesday, October 24, 2006

Solution for Online Gambling

 

The below quote is from a Gonegambling.com newsletter written by John Abbott, sounds like a really good idea but polititions are so full of themselves I doubt they will even consider it."I believe in free trade and that governments should keep their noses out of what people want to do in the privacy of their own homes. Governments should also keep their greedy interfering little paws off the Internet. Having made my stance clear, I also have to say that I'm a realist and what I have just said I would like to see happen, ain't gotta chance. So, being a realist, I have to make the most of what I have to work with. This brings me to my second suggestion. Incidentally, my second suggestion was much less controversial and generally accepted by most members in chat as being a good idea. As I see it, the real problem the government has with Internet gambling is that they can't get their hands in the cookie jar. They want their share of the money but can't work out how to get it. For years I have been saying that governments of all nations should be licensing, regulating and taxing Internet casinos. Far from forcing the casino business underground, governments should be embracing it and profiting from it. As a business person, I see it as being completely irresponsible and immoral of governments to not profit from something that a large percentage of the population wants to do. How bizarre is this, instead of profiting from Internet casinos and using that money to combat problem gambling or fund schools or hospitals, the government in the U.S. is going to use tax payer money trying to enforce a stupid and pointless law. Anyway, with the thought in mind that the government is stuck on how to get money out of Internet gambling, and probably don't know where to start in licensing or regulating the Internet casino industry, I made the following suggestion to our members...I suggested that the government should license people who want to gamble at Internet casinos. Let's see, how about a yearly license fee of $50 per person? 30,000,000 potential ( U.S.) online gamblers x $50 each is a fair chunk of change. Gamblers could buy their yearly license online and be issued with a receipt number. That receipt number would be required by reputable Internet casinos before the player was permitted to play with them. I'm sure that many reputable Internet casinos would do what was needed to comply with government policy just to get back a share of the U.S market.

Face it guys, the government already has the ability to trace what you have been doing online, so dodging the license fee is not really an option, especially if it is kept at a reasonable amount like only $50. And if you needed your receipt number to deposit with casinos anyway, you wouldn't get far by not paying the license fee. As an added incentive to have online gamblers pay for a license, the government could make any winnings from your gambling exempt from tax. OK. Now I have moved into the realms of fantasy. -snicker-

So what have we come up with?

#1. The government gets its hands into the cookie jar of Internet gambling and gains a massive influx of cash. With casinos requiring a receipt number, and gamblers paying the license fee online, it would require one man and a dog to oversee the licensing business. You couldn't run a business any cheaper. If the government is sincere about helping problem gamblers, they can use all the money received to do so. -snicker- As if that would happen. Of course this license fee idea is not restricted to the U.S. It could apply to any country on earth who doesn't want the problems and hassles of regulating their own own Internet casinos, but does want to profit from their citizens who do want to gamble at Internet casinos.

#2. Internet gamblers are able to gamble at any approved casino from the comfort of their own home. They can gamble knowing that they are playing within the law because they are licensed to do so. In fact, and this thought just came to me, if a Social Security number was required when paying for your license, wouldn't that be proof of identity and rule out any under age gamblers? Huh! What about that? And because you had to provide a Social Security number when buying your license, it stands to reason that your payment receipt number would be clear proof of identity for the Internet casinos and rule out much of the fraud they have to deal with. Casinos would of course be able to automatically confirm license numbers by linking back to the government run license payment site in each country.

#3. Internet casinos would be able to run their chosen businesses as they saw fit and most of all they would be able to plan for the future. They would have stability and no fear of changes to laws under cover of darkness. Internet casinos would also have to treat players properly or risk being taken off the approved government list if enough complaints were issued by players. Once removed from the government approved list, the casino would not be able to check receipt numbers which would open them up to the risk of fraud again. It would also result in an instant decline in players from that country.

So there's my thoughts on what governments of all countries could and probably should be doing when it comes to Internet casinos. Take it for what it's worth, but don't email me complaining that you are from the U.S and already pay enough taxes and would object to paying a license fee. If that's your attitude, then you don't want this problem solved. For a yearly payment of just $50 I have laid out a plan that can make all your troubles go away. You could even get back to the good old days when you could use a credit card to make your deposits and didn't have to find a company like Neteller as a go-between."

Gospel of gambling

 

St. Thomas' Episcopal Church doesn't tally the same kind of numbers as some taverns or clubs through the sale of tip jars. But its modest profit still allows the Hancock church to reach out to those in need. St. Thomas' sold $3,365 in tip jars in fiscal year 2006, resulting in a profit of $778. That was among the lowest profit on a lengthy list of establishments, clubs and organizations that sell tip jars. Tip jars are part of the church's occasional basket bingo events. The church uses some of the money for outreach programs such as Christmas for Others, which includes a party and gifts for less fortunate families, said the Rev. Allan Weatherholt, the church's rector. "It really does help the fundraising effort," Weatherholt said. "It's obviously very helpful to the church's income." For the county as a whole, tip jar gambling remains a thriving business. Clubs, taverns, liquor stores and nonprofit groups sold $72.9 million in tip jars in fiscal year 2006, resulting in a gross profit of $12.4 million. In fiscal year 2005, $71 million in tip jars was sold with a gross profit of $12.5 million. The amount the clubs, businesses and nonprofits keep ends up being less than the gross profit, because state law requires a contribution to the county's gaming fund. The groups and businesses must also pay for the jars. Nonprofits contribute 15 percent of the gross profit to the gaming fund, and establishments such as taverns and liquor stores contribute 50 percent, Gaming Director James B. Hovis said. The county distributes the gaming fund to local nonprofit groups. In fiscal year 2006, the amount distributed was $2.88 million. Of that amount, half went to the Washington County Volunteer Fire and Rescue Association, and the remaining money went to 83 charitable organizations. The county is required by state law to give half of the gaming fund to the Fire and Rescue Association. Hovis said the gaming fund was down 4 percent compared with last fiscal year, when the Gaming Commission distributed a little more than $3 million.

The slight downturn could be a result of a higher cost of living, he said.

Since the county's gaming program began in 1995, the Gaming Commission has distributed more than $31.5 million to charitable organizations, Hovis said.

Without tip jars, the Williamsport Moose Lodge 2462 would have a hard time making ends meet, Administrator Mike Little said.

The lodge sold $837,906 in tip jars in fiscal year 2006, resulting in a gross profit of $93,201.

Of that, the club paid 15 percent to the county's Gaming Fund and was allowed to keep what remained.

The lodge uses the money for repairs and other expenses.

"It helps us run the lodge," Little said. "If we didn't sell these, we wouldn't make it."

U.S. Internet Legislation to Curb Gambling Spurs Attendance at IGCE

 

The International Gaming Conference & Expo , slated to takeplace November 5-7 in Dublin at the historic Fitzpatrick Castle, hasexperienced a surge in attendance over the past week and many analystsinvolved with the gaming industry have indicated that this conference couldnot have come at a better time. "As everyone involved with the Internet and gaming online, gaming that isfocused on sports wagering, has come to realize of late," stated Wayne Nixon,Director of the IGCE Conference. "President George W. Bush has now enlistedbanks and credit cards to act as the CIA, FBI and NSA now that the U.S.government has used a port security bill to pass the Unlawful InternetGambling Enforcement Act. The major questions that will be addressed inDublin," he continued, "are where will that leave most Internet gaming sites?Will this effort mirror the Prohibition Amendment of 1919 or is it just aploy to open the flood plains of Internet gambling to the gaming corporationsof Nevada, to make it legalized, nationwide, taxed and regulated? One has towonder whether the so-called 'private companies' will simply continue withbusiness as usual while the public ones adhere to the legislation beforetheir stock prices drop even further? We expect that the experts we haveassembled from around the globe...the legal, financial, technical,governmental and others...will offer advice, opinions, direction and answersto these and many other questions in Dublin, November 5-7. That is why wehave extended the registration period." "The latest U.S. legislation has the online/offshore gaming industry in aturmoil," indicated a governmental spokesperson in Dublin on the condition ofanonymity, "from London to Bangkok, New York to Dublin, Beijing to CostaRica, Malta to Gibraltar. The major question on the minds and lips ofeveryone is 'Will gaming survive?'"

The situation is so urgent and pressing, budgets and expenditures sostrained at present, that IGCE is offering a second complimentary guestregistration for everyone registered for the conference, or planning toregister this week and next...past, present and right up to November 5th.

"These are introspective and somewhat perilous times for the industry,"continued Mr. Nixon, "with corporate and executive futures being determinedon an almost daily basis, fear of dealing with U.S. players/punterspermeating everywhere and uncertainty evident with whomever one speaks toabout the future as critical legal opinions are being sought from Asia toNorth America. It is the opinion of many that the industry will sustain. Itwill not close down. Methodologies to endure and perpetuate, to move forward,are primary considerations. Legal advisories and debates, postures of variousvenues from Antigua to Malta, are a mainstay of a number of planned sessionsthat are on the agenda for Dublin."

'Overpaid' gambling service says it is looking to repay some of funds

 

A gambling service provider that the National Party says the Government has overpaid says it is looking at repaying some of the money. National MP Sandra Goudie has accused the Government of wasting thousands of dollars by overpaying problem gambling organisations. She said in Parliament on Thursday that the Pacific People's Addiction Service in Hamilton was given $143,000 to counsel more than 300 problem gamblers last year but it counselled only eight. The addiction service's general manager, Ned Cook, told Checkpoint it could not get the right staff and found people were not willing to admit they were problem gamblers. Mr Cook says the provider agreed to the contract, thinking it could deliver the service. Other providers Ms Goudie named other providers and has asked the Auditor-General to investigate the issue. She said the Waipareira Trust received $180,000 to counsel 440 problem gamblers but had counselled only 13. Associate Health Minister Damiem O'Connor said the providers are among 13 under review, which could take several months. He says the problem gambling organisations will have to pay money back to the Ministry of Health if the review finds they are not fulfilling their contracts.

Monday, October 23, 2006

Media move raises gambling concerns

 

Concerns are building that an increase in gambling could be the eventual result of the Federal Government's overhaul of media laws. Shortly after the media legislation passed the Senate this week, James Packer announced his PBL company was selling off its media interests, so it could expand further into gambling. Family First Senator Steve Fielding has come under attack from Labor and Nationals politicians, for supporting a Bill which could lead to an increase in gambling. David Yates from the Australian Christian Lobby says it would be very unfortunate if that was the case. "We would be waiting to see in the next few months whether it is going to have any more significant effect, but I think this is showing what Packer's intentions are, and that is a negative thing," he said. Mr Yates says Senator Fielding would be disappointed in any increase in gambling. "Well his party has got a strong view I think on the gambling, and he would be reasonably upset to see that Packer is going and spending more in that area as well," he said. He says an increase in gambling under any circumstances would be damaging to Australian families. "It's a negative thing, if it's a by-product of the Howard changes on the cross-media ownership well then that's a very unfortunate side effect," he said. "We would strongly urge the Packer family, James in particular, to think about spending more money in areas that would have a beneficial effect on the culture rather than a negative effect."

Neteller 'Updates' Its Position on the Online Gambling Bill

 

E-wallet company Neteller issued a statement announcing a modification in their policy toward Unlawful Internet Gambling Enforcement Act (UIGEA). The company, which processes a significant amount of the online poker, and online gambling transactions from the U.S. indicated they are going to abide by the rules of the act, but will continue to do business as usual until the rules of the act are written by the Treasury Department. The Treasury Department has a 270 day window to issue the rules by which the financial providers must adhere to. "NETELLER, a company registered outside the US, will comply with the Act and its related regulations as if it were subject to the Act's jurisdiction. This action is intended to ensure that the Company is able to continue to operate with the support of its principal commercial partners and to protect its shareholders, business partners, employees and reputation." The company said in its statement. However, the company also said it will continue to conduct business as usual with U.S. customers for the 270 day window, or until the rules are clearly defined. "In the interim, US-resident customers are able to use the NETELLER service as normal. The funds of US-resident customers are held in trust accounts and will be available for withdrawal, on demand. The ability to withdraw funds will exist regardless of the customer's location or ability to transfer to any site." The rules in the UGIEA are not yet clear as to what responsibilities non-U.S. based companies like Neteller would have. However, if the company views itself as a U.S. financial institution for the purposes of this act, one would assume the company would have to stop taking transactions from U.S. based customers that direct toward online gambling companies.

If, as it turns out Neteller would stop doing business with U.S. customers, it could have a devastating impact in the short term on the players abilities to fund accounts. Certainly, solutions will pop up to give players options to fund online gambling accounts, but many of these new solutions may not have the financial stability and reputation of a publicly traded company like Neteller.

Some in the gaming community see this as a natural action, with Neteller simply announcing they are going to comply with any rules before they actually have to be bound by the statement, in an effort to not fly in the face of U.S. authorities.

Stay tuned to PokerNews.com for more updates on the legislation, and reaction from the companies and people affected by this pending law.

Russia: Kremlin Sets Its Sights On Gambling

 

Speaker Boris Gryzlov has announced that the State Duma is set to consider the first reading of a new bill that would push the bulk of Russia's gambling halls into four Las Vegas-style "colonies." Gryzlov, reacting to President Vladimir Putin's initiative and subsequent suggestion that his gambling bill be approved as soon as possible and without obstruction, on 17 October predicted that the Duma would overwhelmingly approve the measure. The third and final reading, Gryzlov predicted, could come as soon as November. During the course of an October 4 meeting with the heads of Duma factions in which he outlined the lower house of parliament's top priorities, Putin pulled no punches in criticizing the country's gambling industry. Equating Russia's gaming addiction with the serious "material and moral damage" inflicted by alcoholism, Putin said severe measures were in order. To this end, he presented the lawmakers with his new bill. It calls for the federal government to reimpose state regulation over gambling, and to sweep small-time casinos and slot machines from the streets of Russian cities. Instead, the gambling industry would be concentrated by 2009 into four regional gaming colonies -- two in European Russia, one in Siberia, and one in the Far East. His bill, however, does make a provision for another type of gaming zone that would allow regional and municipal authorities to oversee smaller gambling centers on their territory, albeit under very restricted and specific conditions.

Many observers linked the timing of Putin's initiative to Russia's political crisis with Georgia. This argument followed on the shuttering of four large casinos in Moscow with ties to ethnic Georgians. But a more likely scenario is that Putin merely saw the opportunity to use the Georgian crisis to his advantage. In regaining state oversight of the gambling sector, he could take control one of the most rapidly growing and problematic sectors of the Russian economy. In addition, the Kremlin could also benefit by using the growing antigambling movement as a populist platform ahead of the 2007-08 parliamentary elections.

Gambling in Russia was relatively underdeveloped in the 1990s, when the country was making the transition to a market economy and the majority of its citizens were too poor to take an interest in games of chance. But the situation changed radically by 2002, as rising oil revenues began to trickle down to ordinary Russians. This phenomenon coincided with the state's relinquishing of control over gambling to the State Sports and Tourism Committee and to regional and municipal governments. In anticipation of huge tax revenues, local authorities issued gambling licenses very liberally and ushered in a period of exponential growth. Some estimates have placed the number of slot machines in Russia today at 400,000 or even 500,000, compared to 70,000 one-armed bandits in 2003. Combined, the major U.S. gambling centers of Las Vegas and Atlantic City have only about 280,000. Slot machines are everywhere in Russia -- they are a common sight in railroad stations, grocery stores, clinics, at bus stops, and community centers. As for more traditional settings, Russia's 5,000 casinos are more than double the number found in the United States. Moscow accounts for the lion's share of the country's $6 billion gambling business, boasting 56 casinos and 5,000 slot halls with some 56,000 slot machines. Another 9,000 slot machines can be found on the streets. In the wake of Putin's initiative, Mayor Yury Luzhkov publicly touted Moscow's plans to have just 540 casinos and gambling centers in operation by the end of the year. Gambling is also pervasive in the provinces. Channel One television reported on October 8 that there are more than 2,000 gambling centers in Vologda Oblast's Cherepovets -- a city of just 300,000. On a smaller scale, Volga Oblast's Krasnoye has 10 slot halls to serve its 9,000 residents.

Family First vote boosts gambling, Labor MP says

 

Labor MP John Murphy has accused Family First Senator Steve Fielding of casting a vote which has helped boost gambling. Senator Fielding voted with the Government to allow an overhaul of the media laws to pass through Parliament. The legislation has already prompted a rush of activity as the major media players prepare for the new opportunities. James Packer's PBL has announced a partial sell-off of its media assets and an expansion of its gambling operations. Mr Murphy says Senator Fielding's vote is at odds with his pledge to support Australian families. "Senator Fielding must take his own advice and think carefully and then put a search engine through his conscience," he said. "Senator Fielding must explain to the Senate and his former party why last week he stood up for Australia's richest man to make him $4.5 billion richer out of the anti-family misery of poor people who lose their money out of poker machines and casinos."

Ontario moves to end illegal Web gambling

 

Ontario is looking to quash Internet gambling by introducing a bill today that will ban such Web sites from advertising, a move legal experts say oversteps the province's authority. Gerry Phillips, Minister of Government Services, will table a bill of amendments to Ontario's Consumer Protection Act, including a section aimed at banning media organizations from running ads by gambling Web sites. The primary driver behind the legislation is the dramatic rise in Internet gambling addiction among teenagers, according to ministry spokesman Paul de Zara. A recent survey by the Responsible Gambling Council found that addiction among people aged 18 to 24 rose 400% between 2001 and 2005. "The addiction rates for children are pretty startling," Mr. de Zara said. The legislation is only targeting illegal sites -- namely those that take money bets -- and will exclude "for-fun" sites. Mr. de Zara said all Web sites that take money bets from Canadians are illegal under the Criminal Code because the provinces have exclusive authority over all forms of gambling. "You can't advertise something that is illegal," he said. "We don't let drug dealers advertise crack houses." Mr. de Zara said the government's secondary motivation was to stem the outflow of gambling money from the coffers of provincially approved, taxed and regulated organizations to Web sites that are generally not based in Canada. The legislation is based on a similar private member's bill introduced by MPP Jeff Leal this year, which was supported by Woodbine Racetrack, and follows a major U.S. crackdown on Internet gambling last month. The U.S. Congress passed a bill banning financial institutions and credit card companies from taking payments from U.S.-based bettors, effectively crippling the industry there. Legal experts say the U.S. and Ontario actions are similar in that neither government has made Internet gambling illegal outright, but both have put a chill on the industry through indirect moves against it. John Tuzyk, a partner at Blake, Cassels & Graydon specializing in gaming law, said Criminal Code violations are a federal matter, and Ontario's attempt to regulate online gambling through the Consumer Protection Act will add to what is already a legal grey area.

"It begs the question about whether the activity itself is illegal," he said. "They're kind of implying it's illegal, but to be convicted of breaching the [Consumer Protection Act] they would still have to show that Internet gaming is illegal, which has not been definitively established in Canada yet."

Danielle Bush, a partner at McCarthy Tetrault, which represents several large media companies, said the legislation would introduce uncertainty for those firms and put an unfair onus on them to decide which ads may or may not be illegal. She also objected to the government's stated moral purpose.

"They're overstepping their bounds somewhat," she said. "You simply can no longer say that gaming and gambling are an evil that should be eradicated. You can't take that position and continue to offer the services yourself."

Online Gambling Goes Underground

 

Paul McGuire was at his computer, enjoying one last hurrah on PartyPoker, a site that had pledged to kick off all U.S. users as soon as the law left President Bush's desk. "It was kind of like that last party before summer ends when you've got to go back to school," says McGuire, a 34-year-old New Yorker and author of the popular "Tao of Poker" blog. "They were playing loose because it was the last night." Maybe for some. Not McGuire, whose online handle is "Dr. Pauly." At 11 p.m., he simply closed down his PartyPoker account, withdrawing thousands of dollars in winnings accumulated in recent weeks. He later wired the funds to an offshore account with NETeller, an Internet bank registered in the Isle of Man, and opened new accounts with two other poker sites -- both of them privately owned.

Sunday, October 22, 2006

MARIANAS ONLINE GAMBLING PLANS DERAILED BY NEW U.S. LAW?

 

Politicians planning online gambling regulation in the Commonwealth of the Northern Marianas (CNM) were regarding the new US anti-internet gambling law with some disappointment this week. The CNM House Speaker Oscar Babauta said that pending legislation in the region may face setbacks after President George Bush signed a bill that effectively criminalised the financial process of placing online bets in the USA. Babauta says the CNM bill seeking to regulate online gambling and authored by Floor Leader Florencio Deleon Guerrero, has been pending in the CNM House of Representatives for months. The proposed legislation has Asia as the primary market in mind, which has the potential to generate substantial annual licensing revenues of around $6 million for the Commonwealth. "The intent of the House bill is to allow and regulate Internet gambling in the Commonwealth, with Asia as the primary market. The bill's author says this industry can lead to about $6 million in revenues every year," the Speaker said. "But naturally, if the U.S. government bans online gambling, there is no way that we can do it here in the CNMI," he added. Press secretary Charles P. Reyes Jr. said that the administration did not have an official position on Internet gambling yet. "We will have to consider any federal legislation that may impact our decision. We do fall under the U.S. government and we need to abide by certain federal regulations. If there's a new law that bans Internet gaming, that may apply to the CNMI as well," Reyes said.

Religious policy specialist applauds presidential signing of anti-online gambling Act

 

Southern Baptist public policy specialist Richard Land, clearly delighted with the ban on online gambling financial transactions that passed into US law recently, has commended President Bush and Congress for their commitment in pushing the legislation through. In the process he painted a pretty extreme and unsubstantiated view on the industry. "All friends of families should be pleased with this measure," said Land, president of the Ethics & Religious Liberty Commission. "It will certainly help insulate homes from a parasitic addiction to gambling that sucks the life out of families and destroys marriages. "Thousands of families have faced financial ruin and bankruptcy because of one of the fastest-growing addictions in the county," he said. "This legislation will make it more difficult for these Internet gambling predators to reach into the pockets of America's families and steal the future of children and spouses." The Baptist Press goes on to list the commercial fall-out following the new law, with particular emphasis on damage sustained by publicly listed companies, and then claims that the private nature of Internet gambling has resulted in its widespread use by minors and young adults, as well as addiction problems for people of all ages. It alleges that online gambling sites frequently act as fronts for money laundering, drug trafficking and financing for terrorists, but produces no evidence or sources to back this claim. What the Baptist Press did not mention in the article was the carve-outs for Internet betting on horse racing, fantasy sports and state lotteries. It does briefly point out that the new law does not include a provision passed earlier by the House that would have updated the Wire Act 1961 law to widen its current prohibition on sportsbetting over telephone wires.

MARIANAS ONLINE GAMBLING PLANS DERAILED BY NEW U.S. LAW?

 

Politicians planning online gambling regulation in the Commonwealth of the Northern Marianas (CNM) were regarding the new US anti-internet gambling law with some disappointment this week. The CNM House Speaker Oscar Babauta said that pending legislation in the region may face setbacks after President George Bush signed a bill that effectively criminalised the financial process of placing online bets in the USA. Babauta says the CNM bill seeking to regulate online gambling and authored by Floor Leader Florencio Deleon Guerrero, has been pending in the CNM House of Representatives for months. The proposed legislation has Asia as the primary market in mind, which has the potential to generate substantial annual licensing revenues of around $6 million for the Commonwealth. "The intent of the House bill is to allow and regulate Internet gambling in the Commonwealth, with Asia as the primary market. The bill's author says this industry can lead to about $6 million in revenues every year," the Speaker said. "But naturally, if the U.S. government bans online gambling, there is no way that we can do it here in the CNMI," he added. Press secretary Charles P. Reyes Jr. said that the administration did not have an official position on Internet gambling yet. "We will have to consider any federal legislation that may impact our decision. We do fall under the U.S. government and we need to abide by certain federal regulations. If there's a new law that bans Internet gaming, that may apply to the CNMI as well," Reyes said.

Internet gambling still expected to grow despite the new US law against online gambling

 

Even though President Bush has signed a law to curb Internet gambling, investors in the handful of U.S.-listed Internet gambling companies may not want to fold their hands just yet. "There is growth in this industry even without the US," said Blackmont Capital technology analyst Wojtek Nowak. "The drive into broadband Internet in Asia and Europe still makes this an interesting sector." Investors fled Nasdaq-listed companies such as Cryptologic, a Canadian maker of software used by Internet gambling sites, and GigaMedia, a Taiwan maker of gambling software, after Congress passed the Unlawful Internet Gambling Enforcement Act September 30. The legislation signed into law by Bush on Friday makes it illegal for U.S. banks and credit card companies to settle transactions for patrons of Internet gambling sites. Most publicly traded companies that operate online gambling sites immediately announced plans to abandon the U.S. market to focus on other regions. "That is where growth will have to come from," Nowak said, naming also Eastern Europe and South America as regions for potential growth. Online gambling is expected to expand to a us$ 15 billion industry this year from us$ 12 billion in 2005, according to DesJardins Securities analyst David Shore, who cited statistics from Global Betting and Gaming Consultants. While the US market accounts for half the Internet gambling market, online betting equaled less than 4 percent of the estimated us$ 260 billion global land-based gambling market, Shore said. Analysts assume the preponderance of American bettors online has more to do with easy high-speed Internet access - which enables the fast transmissions needed to load data from the flashy sites - than a lack of gambling culture in the rest of the world. The United States has 36 percent of all broadband connections in the 30 member countries of Organization for Economic Cooperation and Development, according to an OECD report released Friday. But Europe, in particular is catching up. In Asia, Korea and Japan have high rates of broadband penetration, but China, the largest nation by population, lags.

As the rest of the world continues to improve Internet access, Nowak said, the online gambling sites will meet with a larger audience. "The Internet is a good medium for gambling," he said. "It assures privacy and you can conduct it from the comfort of your home."

Besides, gambling is generally illegal in China, for example, and Japan only allows bets on a few types of activities, such as horse racing. In Europe, instead of banning Internet gambling, some countries are trying to regulate and tax the industry. Austria and Italy have taken steps to allow domestic online gambling. And the European Commission has indicated that private online gambling sites cannot have less access to bettors than the state-run lottery monopolies that generate billions in tax revenue for most European countries.

Among them are U.S.-listed Cryptologic. With enactment of the law, the company lost about us$ 30 million in revenue in the United States, or a quarter of its total, which it will seek to replace in Europe and Asia. Nowak said that could take up to five years. "It's going to grow at 20 percent a year, but that's a lot to recover," he said, and added: "Crypto is growing nicely in Europe and that market is going to expand."

ONLINE GAMBLING, AGAIN

 

I've been getting a lot of email from people about the gambling ban. Much has come from people who ran a few Google searches, found one of my artricles on the ban, and are now pretty honked off about it all. At risk of falling victim to the pundit's fallacy, I think this is going to come back to bite Frist and the GOP. Think about it. Over the last week, some 10-15 million Americans who play online poker logged on to their favorite poker sites, only to get a message telling them that, thanks to the U.S. Congress, they're no longer allowed to play. The GOP just politicized a rather large group of people who heretofore were rather apolitical. And they skew rather wealthy. Of course, we run into the same old problem: Are the Democrats any better? They ought to be. If they were smart, they'd carry this issue into the home stretch, holding it out as an example of a Republican Party that doesn't give a damn about indidual rights, and has nothing but contempt for the "leaves us alone" crowd. And they'd position themselves as an alternative, at least when it comes to matters of "what you do in your own home is your own business." It's a winner. The people who passionately believe in an online gambling ban weren't going to vote for them any way. And in any case, it's a rather small group of people to begin with. Most conservatives are opposed to this bill. The Democrats should send Barney Frank out to do the Sunday morning talk shows.

Why he wants the cash - for gambling

 

PUBLISHING & Broadcasting Ltd executives spent Monday putting the finishing touches to plans to spin off the company's media assets, but executive chairman James Packer was not orchestrating proceedings from his Park Street headquarters. Mr Packer was on the Singaporean resort island of Sentosa helping present his consortium's bid to build a $US3.5 billion ($4.7 billion) casino/resort complex on the very spot on which his makeshift office was standing. Physically and metaphorically Mr Packer was in the new world of gambling that PBL is building for itself overseas, while plans were being finalised at home to spin off what his father, the late Kerry Packer, once regarded as the family's crown jewels. Mr Packer has already secured wins in Macau that will completely transform the company even if it loses out to one of the two rivals in contention to build Singapore's second casino resort. PBL, and its Asian partner Melco International, have three casino/resort properties under development in Macau and funding requirements are estimated to be $US3 billion. Just last week PBL transferred the $US900 million licence it acquired early this year to its joint venture with Melco. The licence allows the partners to build and operate as many casinos in Macau as they like, giving them free rein in a market that is expected to overtake Las Vegas this year in terms of gambling revenues. The above figures give some idea of why PBL might need to spin off its media business and build a war chest. But given plans to float part of the Melco venture on the Nasdaq stock exchange for $US1 billion some time next year - and that the venture has been successful at financing the current projects with large amounts of non-recourse bank debt - the media spin-off might indicate there is more in the wings. Broker UBS said yesterday it expected PBL would actively pursue opportunities in other countries that were relaxing their regulatory environment and allowing casinos for the first time. Japan, Thailand, Vietnam and Taiwan are considered to be the most attractive among them.

"A sale of the more mature media assets would give PBL the flexibility to pursue these other options," said UBS analysts Nola Hodgson and Simon Smiles.

"However, if this is the primary motivating factor, we would expect there must be some additional larger-sized opportunities for PBL, as we believe that the group's current balance sheet is comfortably strong enough to fund the already announced plans," they said.

Kiwi Gaming responds to the Unlawful Internet Gambling Enforcement Act

 

We regret to announce that from Friday October 13th Kiwi Gaming (www.kiwigaming.com) no longer accepts wagers from US Residents. The Unlawful Internet Gambling Enforcement Act of 2006, recently signed by the US President, will prevent US banks from handling gambling transactions. Kiwi Gaming deeply regrets having to take this action but we have been left with no choice. We can only recommend players, who believe this infringes their constitutional rights, to contact their state representatives. We want you to know that the Kiwi Gaming community has created Kiwi Skill ( www.kiwiskill.com), an alternative place for US residents to play at. When you join us at Kiwi Skill, you'll still be a part of our great Kiwi Community - and able to play games with your Kiwi friends! You can invite all your other friends here too - we know you'll have a great time!

137 gambling games get state OK for 2 racetracks

 

A roster of 130 "electronic games of skill" — with names such as Sizzling 7 's, Double Black Tie and White Hot Aces — met with Arkansas Racing Commission approval Monday for installation at the state's two pari-mutuel racetracks. The gambling games join seven others the commission accepted last month, for a total authorization of 137 variations of video poker, blackjack and Lock 'n Roll at the Oaklawn Park thoroughbred racetrack in Hot Springs and the Southland Park greyhound venue in West Memphis. Delivery of some machines will begin as early as this week. Both tracks plan grand openings for their "games of skill" Nov. 18, representatives of Southland and Oaklawn told commissioners during a conference-call meeting in Little Rock. As a prerequisite to gaining the commission's OK, the gambling games passed muster with New Jersey-based Gaming Laboratories International Inc., the consultant hired by the state to ensure that the devices conform to state regulations.
Most of the machines offer video poker or blackjack. But one, PokerPro Electronic Poker Game, simulates a table game of poker in which each player is dealt electronic cards on a video monitor. Lock ' n Roll is similar to video-poker games: After the machine's cylinders spin once, players can lock in one or two images before spinning again, said Danny Walker, administrator of the office of field audit for the electronic games of skill section of the Arkansas Department of Finance and Administration. "They use different images — they may use numbers or they may use symbols — and the basis of the game is to match as many symbols as you can across the line you are playing, with the more items being better," Walker said.

Southland is undergoing a $ 40 million remodeling and renovation at the nearly 50-year-old track to make room for the new games. The track also added a nightclub and a buffet, Barry Baldwin, president of Southland Park greyhound track, said in a telephone interview after the meeting.

The track plans to install 819 electronic gambling machines and has already hired 244 new employees to help service the new gambling attraction, Baldwin said. The track will likely have a "soft opening" a week or so before the grand opening — or earlier if staff training is complete — to make sure everything is functioning properly, he said.

"It is much more in-depth training than anything we imagined," Baldwin said. "But it's looking good."

Oaklawn has submitted a proposal for 125 devices, with plans to add more machines as space becomes available after the 2007 live thoroughbredracing season, scheduled for Jan. 19-April 14.

Oaklawn also plans a "soft opening," a few weeks before the Nov. 18 grand opening, said Bobby Geiger, director of wagering and simulcast at the track.

A state law, Act 1151 of 2005, authorized special elections in Hot Springs and West Memphis on whether Southland and Oaklawn could seek Racing Commission approval for adding "electronic games of skill." Voters in both cities gave the tracks the go-ahead in elections last November.

Both the state law and Racing Commission regulations define the new gambling games as those "played through any electronic device or machine that afford [s ] an opportunity for the exercise of skill or judgment where the outcome is not completely controlled by chance alone."

Some residents of the tracks' home counties, Crittenden and Garland, filed postelection lawsuits challenging the constitutionality of Act 1151. The Family Council Action Committee, a Little Rock-based anti-gambling group, supported the plaintiffs. The committee contends that "electronic games of skill" are slot machines and that the racetracks will become casinos after installing them.

Circuit judges in both counties rejected the lawsuits. The decision in Garland County was appealed to the Arkansas Supreme Court.

After the machines arrive, the microchips that operate the games will be sent to the Finance and Administration Department's games of skill section, Racing Commission manager Shelby McCook said.

State employees will deliver the microchips to the tracks, where representatives from Gaming Laboratories International and the game makers will install the chips in the machines, after which they will be tested to make sure they are operating properly, McCook said.

Commission regulations require that at least 83 percent of what is wagered in the new machines be paid back to gamblers, but both tracks expect their devices will be programmed to return more than 90 percent to be competitive with casinos in neighboring states.

The tracks will get 65 percent of what's left after payout. The remaining distribution of this "net wagering revenue" will be as follows: 18 percent to the state, 14 percent to prize purses, 1. 5 percent to the city in which the track is located, 0. 5 percent to the home county and 1 percent to the Racing Commission for promotion of thoroughbred or greyhound breeding.

Upstate track set to open N.Y.'s 8th video gambling operation

 

VERNON, N.Y. An upstate harness racing track is set to become the next New York track to offer video gambling machines.
The long-suffering Vernon Downs in central New York's Oneida County is scheduled to open its video gambling facility on October 26th. The track's owners hope it will bring in (m) millions of dollars in revenues, just like similar operations have done at seven other "racinos" across New York state. The newest video-gambling emporium opened last week at Yonkers Raceway. Last summer, video gambling machines were unveiled at the newly reopened Tioga Downs, outside Binghamton. In Saratoga Springs, the city's racinos has been so popular that the facility is undergoing a multi-(m)-million-dollar expansion that will add 500 gambling machines to the 12-hundred already in operation.

Bush officially bans internet gambling

 

According to reports the bill, passed in congress on Friday, bans internet gamblers from using credit cards, checks and electronic fund transfers to settle their wagers in the US, and is part of a larger bill aimed at bolstering US security.
Aljazeera, a news agency, said US analysts believe the industry is one of the most lucrative online markets in the world which is a blow to the growing online gambling industry. The reports revealed that Sportingbet PLC and Leisure & Gaming PLC both sold their US operations for $1 hours before the law was passed.  "World Gaming PLC directors resigned, leaving the company in the hands of administrators. Rival Leisure & Gaming has followed suit, selling its US operation to a new firm set up by its chief executive". "PartyGaming PLC, the world's largest gambling company, said it had suspended all real money gaming activities to customers in the US".  "Empire Online PLC said it would focus on gaming outside the US, while 888 Holdings PLC said it was considering its options," said Aljazeera. According to the media the loss of US business is crippling - US residents account for half a market that is estimated to be worth $15.5 billion this year in "spend" value, according to the Betting Research Unit at Nottingham Business School. "The spend value is the amount gambling companies win from their clients - or the amount gamblers lose - and is much less than revenue because most of the revenue is recycled to gamblers in the form of winnings," reported Aljazeera. Analysts said the industry is now moving in two directions. On one side are the London-based companies which are ending their US bases.

The other is private offshore companies which find it easier to reach US customers through third parties and which are keeping their US businesses.

One such company, Costa Rica-based, Canadian-licenced VegasPoker247, expressed its confidence when it said that it would be able to continue offering online games for money.

"All players' funds are completely secure and we are exploring every available depositing option with our existing payment processors," the company was quoted.

Although US residents account for more than half of the business of online casinos, no major companies are based there because the US has, since 1961, prohibited using telephone transmissions to bet across state lines.

Online gambling sites operating in Costa Rica despite U.S. law

 

Several operators of Internet gambling sites in Costa Rica known as "sportsbooks" say their businesses will not be significantly affected by a new U.S. law prohibiting bank and credit card payments to the sites. U.S. President Bush signed legislation Friday aimed at prohibiting the credit card and electronic fund transactions U.S. players often use to settle online wagers. Some foreign online gambling outfits immediately said they would stop doing business with American customers.
There are at least 200 electronic gambling companies in Costa Rica, employing about 10,000 people, according to the Costa Rican electronic gambling business association. Bodog.com, founded by Canadian millionaire Calvin Ayre, said in a statement Monday that, "The way we see it, we have a few months to study the situation and put a plan in place to deal with all anticipated outcomes of the new legislation.""We are, however, confident that we've structured our business in such a way that we'll have no problems adapting to any changes in the online gaming environment," the statement said. "We see the future as very positive for Bodog.com." VegasPoker247, part of the "Absolute Network," also seemed undaunted by the new law. "VegasPoker247 is pleased to announce that it's business as usual," said a statement posted on the company's website Friday by manager Nick Powers. "All players' funds are completely secure and we are exploring every available depositing option with our existing payment processors," Powers said. "We believe they will remain unaffected by this law and will continue to operate without interference."

Female gambling rise prompts pokie cut

 

A RISE in the number of older women admitting to a gambling problem has renewed calls for the New South Wales Government to reduce the number of poker machines. The Salvation Army said the majority of men and women seeking help from Sydney's Problem Gambling Centre during the past year fell into the 36- to 46-year-old age group. The centre's Gerard Byrne said there was an increasing number of middle-aged and older women coming forward for help. "In NSW, the most common form of problem gambling is electronic gaming,'' he said. "And what we're also noticing is that there is an increasing trend of women, particularly older women accessing the service.''He said female gamblers frequented gaming venues such as hotels and registered clubs during the day. "There are a lot of other things that go on in these places that isn't gambling, like cheaper or subsidised meals, subsidised drinks and shows and contests,'' Mr Byrne said. "That attracts people to attend there. While, in general, most gaming areas are kept separate from the clubs, it's hard not to appreciate the fact that you're in a gaming environment with all the bells and whistles that are on machines.'' Mr Byrne said the simple solution was to cap the number of pokies in the state and even possibly roll back the number. A special seminar for problem gamblers will be held on Thursday at the counselling centre at Fairfield RSL, in Sydney's west.

It will feature the director of the Problem Gambling Center in Las Vegas, Rob Hunter.

"In Vegas, the biggest numbers of people coming forward for treatment were women, (poker)-machine players and old folks,'' Dr Hunter said.

"The vast majority of gamblers never develop a problem. For the small percentage that do, they are not after money or excitement, they are after escapism, the numbness.

"And women, who are not inclined to know how to gamble at a casino, are most likely to start at the machines because they find the machines less threatening.''

Dr Hunter said the increase in the number of women problem gamblers was possibly because females were more likely to come forward seeking help.

He praised the efforts of the US Problem Gambling Centre and said the best way to cure problem gambling was to ensure that support systems like it existed elsewhere.

Gambling proposal, smoking questions among ballot issues

 

Gambling promoters are putting at least $13 million on the line to see if Ohio voters will welcome slot machines on Nov. 7, the third proposal since 1990 to expand gambling. Voters that year and in 1996 refused almost 2-to-1 to allow casino gambling in some Ohio cities. Backers are optimistic they will fare better this year. Despite the opposition of statewide officeholders and the two candidates for governor, they point to the money that's left the state since casinos opened in Indiana and Michigan and slots debuted in West Virginia since the mid-1990s. Two other issues on the statewide ballot would regulate where people could smoke, and one would raise the state's minimum wage by $1.70 to $6.85 an hour. A fifth issue would stop changes in Ohio's workers' compensation law from taking effect, but it was in a court battle to stay on the ballot. Passage of state Issue 3 would place up to 31,000 slot machines at Ohio's seven horse-racing tracks and two free-standing parlors in downtown Cleveland. Its primary backers are the racetrack owners and the two Cleveland developers who would build the parlors. They estimate they would take in $1.5 billion each year. The rest of the money would go to college scholarships, local governments and gambling addiction services. Proponents say the gambling also would bring 17,000 permanent jobs and 20,000 construction jobs to the state. Opponents say passage of the issue would lead to deterioration of the neighborhoods surrounding the parlors and ruin the families of thousands of Ohioans who would become addicted to gambling. Backers say opponents are being hypocritical in trying to keep gambling in check while the state lottery - authorized by voters in 1973 - and charity bingo and casino games are permitted.

"A lot of the arguments have been from politicians who proposed Mega Millions (multi-state lottery). That was (Gov.) Bob Taft, yet he opposes our proposal," said Linda Siefkas, spokeswoman for Ohio Learn and Earn, the coalition of track owners and developers.

As with the lottery and the 1990 and 1996 proposals, the lure for voters is education. Issue 3 backers are promising $850 million a year in scholarships for Ohio high-schoolers who go to in-state colleges.

The Ohio Office of Budget and Management said the slots backers' projections are too high. The office said the state could support only one-third as many machines, raising $324 million annually for scholarships.

Gambling revenues are unpredictable because of fluctuating employment rates, the economy and other outside factors, said David Zanotti, president of the conservative Ohio Roundtable who also fought the earlier gambling proposals.

"If you link gambling to vital services, you're going to be disappointed," Zanotti said. "The problem still is the numbers."

Passage also would help others trying to expand gambling in Ohio, especially the Eastern Shawnee, an American Indian tribe that is negotiating land deals in several communities to build casinos if it ever should get state and federal approval to do so. By opening slots parlors, Ohio's status as a state that permits gambling would be elevated above its current lottery-and-bingo category to one that permits casino-style games.

Siefkas argues that passage of Issue 3 wouldn't give Indian tribes more flexibility to set up casinos - they could do it now if they had land and were recognized by the government, she said. Issue 3 simply expands the definition of what's allowed in Ohio to include slot machines.

The backers say they're ready to spend at least $13 million on the campaign. Zanotti said the opponents are shooting for $3 million, but noted that his side won twice before despite being badly outspent.

In 1996, would-be casino developers spent more than $8 million, while opponents spent just over $1 million.

Voters also will be asked to settle the contentious issue of smoking in public buildings. Issue 5 would ban smoking in nearly all buildings outside the home, while Issue 4 would exempt bars, bowling alleys, bingo halls and racetracks and would allow restaurants to set aside enclosed spaces for smokers. Those venues still would be allowed to ban smoking if they wished.

If voters approve both issues, the less restrictive issue would be prevail because it changes the Ohio Constitution, while Issue 5 simply changes state law.

The minimum wage increase and the slots proposal also would amend the constitution, meaning more ballot issues would be required to undo them.

Issue 2 would raise Ohio's minimum wage from $5.15 an hour to $6.85. Backers - largely unions - say the increase would give a lift to Ohio's working poor. Opponents - mostly business groups - say it would place a burden on small business struggling to become profitable.

Friday, October 20, 2006

XXL Club Casino responds to Unlawful Internet Gambling Enforcement Act

 

We have no intention of stopping any of our US customers. The bill passed does not make it illegal for you to bet or for us to accept bets, so it will be business as usual. The vast majority of all deposits processed by our company are processed through non US payment processors. It is currently unclear how these payment processors, based outside the United States, with no assets, presence or employees in the US, would be affected by this bill. We wish to reassure our members that at this time, XXL Club Casino continues to operate normally and we remain committed to delivering the best quality and state of its class services that our players expect from us. Please feel free to contact support at any time if you should require assistance regarding any matter.

Trinidad PM still opposes gambling

 

As reported by Trinidad and Tobago's Newsday: "Prime Minister Patrick Manning yesterday told protesting private members clubs and casino workers that Government stands firm on its opposition against casinos and casino-type establishments and the local gaming industry will be restructured so it complies with the law. "Prior to speaking with Manning, the club owners said Government should take any information it had about gaming establishments being involved in money laundering, to the police. "Under the watchful eyes of the police, nearly 1,000 private members clubs and casino workers assembled outside Whitehall around 9 am to protest Manning's anti-gambling statements in his October 4 Budget presentation in Parliament. "Many of them, wearing 'PNM voter' shirts shouted chants of 'no work, no vote' as they demanded an audience with Manning and for Government to protect their jobs. The Prime Minister arrived at Whitehall around noon and briefly met with the workers..."

Internet gambling: Federal Reserve Chairman frets over "regulatory burdens"

 

Federal Reserve Chairman Ben Bernanke said Monday that bank regulators should search for ways to reduce regulatory burdens imposed on the financial system in the government's efforts to battle terrorist financing and money laundering. There are some who believe Bernanke's comments apply to a recently signed bill that would hold banking institutions responsible for monitoring and prohibiting online gambling transactions. The banking sector has already expressed disappointment with the new law, insisting there is no way they can implement such a system without allocating billions of dollars, and even that may not be enough to make monitoring full proof. Experts point out that few if any online gambling enterprises - all of which operate outside the US - identify their businesses to banking institutions as online gambling establishments. Some routinely chance corporate names while utilizing third party processors based in numerous other countries. "Deterring and identifying misuse of the financial system, as important as that is, should not be so onerous that it stifles innovation ... or reduces the international competitiveness of U.S. banks," Bernanke said in remarks prepared for the annual conventions of two banking groups. He said the central bank was determined to work to streamline the reporting processes required by the Bank Secrecy Act "without diminishing the value to law enforcement of the information produced."

The Bank Secrecy Act, passed in 1970, is the government's main tool in the fight against money laundering by drug traffickers and other criminals. Since the 2001 terrorist attacks, it has been increasingly used to halt the flow of financing to terrorist organizations.

Bernanke delivered his comments by satellite to separate conventions of the American Bankers Association in Phoenix and America's Community Bankers in San Diego.

"We are ever mindful that banks and their customers bear a large share of the costs of regulation," Bernanke said. "Minimizing the regulatory burden on banks is very important."

In his remarks, he made no mention of the current state of the economy or what the Fed might do when officials meet on interest rates next week.

Bernanke said it was important for the banking industry to have the opportunity to get feedback from regulators on the usefulness of their reports on suspicious activity as well as guidance on ways to better identify the most significant risks.

"Efforts to further increase feedback would help banks allocate their compliance resources more efficiently while complying with the act and preventing misuse of the financial system," Bernanke said.

He said it was also important for banks to have effective channels to voice their concerns about burdens imposed by the secrecy law or the lack of clarity in the regulations they are supposed to enforce.

Bernanke said the Fed was also exploring ways to reduce regulatory burdens in the implementation of new rules on capital requirements and in the Community Reinvestment Act, which seeks to boost lending in poor neighborhoods.

Gambling act sinks Betcorp's US arm

 

AUSTRALIAN online gaming company Betcorp has suspended its United States operations after the enactment there of restrictions that effectively ban some forms of internet betting. Melbourne-based Betcorp said it had suspended its US operations after the Unlawful Internet Gambling Enforcement Act of 2006 was signed into law by US President George Bush. The act makes it illegal for US banks and credit card companies either to take payments from or make payments to online gambling sites. Betcorp said it had "suspended the accounts of United States residents with immediate effect", in response to the enactment of the new gambling regulations. "The group continues to trade with residents of 87 other countries in which it has customers," the company said. The company is also listed on the London Stock Exchange's small cap AIM exchange, and is set to delist from the Australian exchange this month in order to concentrate on its British operations. Betcorp said it was "unable to sell its US operations prior to the act coming into force", given that both the ASX listing rules and AIM's rules require that any such transaction be conditional upon shareholder approval. Last month, Betcorp decided to stop accepting telephone bets from US customers, citing regulatory uncertainty.

Internet gambling still expected to grow

 

Even though President Bush has signed a law to curb Internet gambling, investors in the handful of U.S.-listed Internet gambling companies may not want to fold their hands just yet. "There is growth in this industry even without the United States," said Blackmont Capital technology analyst Wojtek Nowak. "The drive into broadband Internet in Asia and Europe still makes this an interesting sector." Investors fled Nasdaq-listed companies such as Cryptologic Inc., a Canadian maker of software used by Internet gambling sites, and GigaMedia, a Taiwan maker of gambling software, after Congress passed the Unlawful Internet Gambling Enforcement Act Sept. 30. The legislation signed into law by Bush on Friday makes it illegal for U.S. banks and credit card companies to settle transactions for patrons of Internet gambling sites. Most publicly traded companies that operate online gambling sites immediately announced plans to abandon the U.S. market to focus on other regions. "That is where growth will have to come from," Nowak said, naming also Eastern Europe and South America as regions for potential growth. Online gambling is expected to expand to a $15 billion industry this year from $12 billion in 2005, according to DesJardins Securities analyst David Shore, who cited statistics from Global Betting and Gaming Consultants. While the U.S. market accounts for half the Internet gambling market, online betting equaled less than 4 percent of the estimated $260 billion global land-based gambling market, Shore said.

Analysts assume the preponderance of American bettors online has more to do with easy high-speed Internet access -- which enables the fast transmissions needed to load data from the flashy sites -- than a lack of gambling culture in the rest of the world.

The United States has 36 percent of all broadband connections in the 30 member countries of Organization for Economic Cooperation and Development, according to an OECD report released Friday. But Europe, in particular is catching up. "The strongest per-capita subscriber growth comes from Denmark, Australia and Norway," the report said.

In Asia, Korea and Japan have high rates of broadband penetration, but China, the largest nation by population, lags.

"The difficulty with China is that a fragmented financial system has kept operators away," Nowak said. "But in general, software companies are looking to Asia as potential growth market."

As the rest of the world continues to improve Internet access, Nowak said, the online gambling sites will meet with a larger audience.

"The Internet is a good medium for gambling," he said. "It assures privacy and you can conduct it from the comfort of your home."

That is not to say there will not be other hurdles. Gambling is generally illegal in China, for example, and Japan only allows bets on a few types of activities, such as horse racing. In China and other developing nations, cash is still king, so although gambling is part of the culture, some bettors may be wary of paying online.

In Europe, instead of banning Internet gambling, some countries are trying to regulate and tax the industry. Austria and Italy have taken steps to allow domestic online gambling. And the European Commission has indicated that private online gambling sites cannot have less access to bettors than the state-run lottery monopolies that generate billions in tax revenue for most European countries.

"They are taking the opposite approach in Europe and it's going to be an opportunity for growth for the companies that have activities there," DesJardins' Shore said.

Among them are U.S.-listed Cryptologic. With enactment of the law, the company lost about $30 million in revenue in the United States, or a quarter of its total, which it will seek to replace in Europe and Asia. Nowak said that could take up to five years. "It's going to grow at 20 percent a year, but that's a lot to recover," he said.

Shore expects the company to struggle for a year before recovering. "They're losing a lot of revenue, but so far haven't said how they will reduce costs, so profits are going to suffer," he said. "Crypto is growing nicely in Europe and that market is going to expand."

GigaMedia, whose shares are listed on the Nasdaq, recovered most of its share-price losses after the company assured investors it generates no revenue in the United States. From its beginning, GigaMedia shunned the U.S. market for Asia and Europe because it worried legislators would outlaw the sector.

"I would argue that those companies that expunged their U.S. exposure are now lower-risk investments," Nowak said.

Brisbane online gambling company struggles in face of US laws

 

Brisbane-based online gambling company Global Approach's share price has slid a further 7% today despite assuring investors it is renewing its focus on European and Asian markets. The share price has slipped 60% since September 11 to 4 cents, and a $2.1 million net profit projection for 2007 is "unlikely to be achieved". The company has now announced a major corporate restructure, with directors taking "sizeable salary cuts" to offset new US laws. The laws prohibit the processing of transactions from US customers. Global Approach is also considering merger and acquisition options. According to Global managing director James Canning-Ure, the US market makes up to 50% of net gaming revenues. "We plan to offset any potential revenue loss by continuing our expansion into the European and Asian markets," Canning-Ure says. "Fortunately our company's global approach means we have not relied upon the US market and therefore continue to have excellent growth prospects going forward. The company has recently launched a Japanese-language site, as well as a UK-focused casino brand.

Thursday, October 19, 2006

Online Gambling Giants Relegated on UK Stock Exchange

 

Online gambling companies PartyGaming and 888 have both been demoted on prestigious FTSE stock indexes in the UK, following the unexpected passing through the Senate of a US bill which aims to make it illegal for US banking institutions to process transactions to online gambling companies. President Bush signed the bill into law on Friday, and publicly-listed companies PartyGaming and 888 immediately blocked wagering from US residents. When the bill was unexpectedly passed through the US Senate after it was attached to the unrelated Ports Security Bill, shares of publicly traded online gambling companies nose-dived. PartyGaming has lost around 75% of its value following the news, with 888 losing around 50% of its value. As a result, PartyGaming dropped off the FTSE 100 list into the FTSE 250 Index. As a result, 888 was relegated from the FTSE 250 onto the FTSE Small Cap Index. Many online gambling companies will continue to provide betting services to US residents, as the new law does not make online gambling illegal - it simply aims to make it more difficult to fund player accounts. Moral reasons were cited by proponents of the bill, but it is largely believed that the US government was worried that much of the online gambling industry was based overseas, and wanted to restrict the flow of US funds over their border. Industry analysts expect the new law will largely be ineffective, as US banking institutions may strain under the weight of regulation, and may not be able to fully prevent the funding of accounts through checks and wire transfers.

Internet gambling group in administration

 

Antigua-based World Gaming, the online gambling group, has gone into administration, just before a law that would bar it operating in the US was due to be passed. The company had its shares suspended on the Alternative Investment Market and four of its top directors, including chief financial officer David Naismith, and chief executive Daniel Moran, have resigned. US business made up the 'overwhelming majority' of revenues, the firm said. The new bill, signed by President Bush on Friday, effectively makes it illegal to accept bets from US customers. World Gaming - which traded under sites including sportsbetting.com and betonusa.com - is the first betting firm to collapse as a result of the law.

Success for 'one-stop' gambling program

 

A "one-stop shop" treating problem gamblers in Sydney is reporting a 50 per cent success rate. Run by The Salvation Army in cooperation with the Fairfield RSL club in Sydney's south-west, The Sydney Problem Gambling Centre opened in October last year. In its first annual report, published today, the centre said it had answered 400 telephone inquiries and conducted 561 counselling sessions. "Of those who continue with counselling, (the centre) has reported a 50 per cent success rate in radically altering the behaviour of the problem gambler,'' the report said. Gerard Byrne, from the centre, said its success was attributable to the rare concentration of a range of services in the one location. "We are offering what we see as a one-stop shop for people with a gambling problem,'' Mr Byrne said. "We have gambling intervention workers, or counsellors. We also have therapists there to provide intervention for depression and anxiety, and to provide family counselling. "We have a financial counselling service and located next door to us is a Salvation Army church and community service centre providing welfare and social assistance. "Added to that, our telephone help service line diverts to the Salvo Careline for out of hours support. So in a sense we are there 24/7.'' Problem gamblers from as far away as Queensland and Wagga Wagga have taken the even-money odds to saving themselves and their families from the devastating effects of problem gambling. The typical problem gambler in counselling at the centre is a man aged between 36 and 46, who is hooked on poker machines and abuses alcohol. A pioneer in the treatment of problem gamblers in Las Vegas, Rob Hunter, has been recruited by the Fairfield RSL club to consult on the centre and train the club's staff on intervention. The coincidence of problem gambling and alcohol abuse among 80 per cent of all people counselled at the Sydney centre was higher than at his Las Vegas centre, Dr Hunter said, but not unexpected.

"The biology of problem gambling is very similar to alcoholism,'' he said.

"They are both chronic and progressive disorders. Both meet the medical criteria for what constitutes an illness.

"And the pay-off for both is not so much excitement but a numbness, they like the anaesthetic effect.''

Twenty per cent of all clients assessed by the centre admitted to suicidal thoughts.

Problem gambling affects more than 1.5 million people around Australia, including gamblers and their families, and in NSW it's on the rise.

Macau Q2 gambling receipts 12.9 bln patacas, up 11 pct yr-on-yr

 

Macau's gaming industry chalked up yet more record takings in the second quarter of the year, racking up 12.9 bln patacas, government figures showed. Census Department statistics showed that gambling receipts outstripped all other forms of income, as they rose 11 pct year on year in the three months. By comparison total exports amounted to 5.6 bln patacas. With annual gambling receipts expected to near 7 bln usd, the city is already believed to have overtaken the earning power of the Las Vegas Strip casinos. Such growth -- in excess of 25 pct last year -- had been fuelled by a sudden surge in tourist arrivals since travel restrictions were lowered in the Chinese mainland. That has been matched by a massive increase in overseas investment following changes in 2001 to rules governing the foreign ownership of casino licences, which until then had been monopolised by tycoon Stanley Ho. As a result some 25 bln usd has been committed to building some 20 new hotel-casino complexes over the next few years in anticipation of tourist arrivals in excess of 20 million.

Gambling on Glavine: Veteran goes on limited rest

 

Superstitious or not, Friday the 13th was bad luck for the New York Mets. Their late collapse in Game 2 gave the St. Louis Cardinals a 9-6 win and guaranteed that the NLCS would go at least five games, a scenario New York was hoping to avoid. Manager Willie Randolph now has no choice but to hand the ball for tonight's Game 5 to veteran Tom Glavine, who also started Game 1 of the series. The 40-year-old left-hander will pitch on only three days rest because of last Tuesday`s rainout. MLB officials were subsequently forced to schedule games on five straight days. Glavine has been outstanding in his last three starts stemming back to the regular season. He`s pitched 19 consecutive scoreless innings and allowed only 11 hits over that span. Glavine is the crutch propping up the Mets` rotation after they lost Pedro Martinez and Orlando Hernandez prior to the postseason. "He`s done that for us all year," Randolph told reporters. "Tommy wants the ball in a big spot, and as far as I`m concerned, you always feel real confident when you give him the ball." Sportsbooks echo Randolph`s confidence in Glavine as they prepare to set the line for Monday's Game 5. Oddsmakers are looking at pitchers' playoff performances so far as the biggest factor for any moves in favor of the Mets. "Rest won`t really come into play for this line as Glavine looks at the top of his game thus far in the playoffs," say bookmakers for Bodog.com. "Although he's older than the rest of the bullpen, it`s also important to remember a lot of veterans have experience deep in the playoffs and that is often more of an edge than the fatigue that everyone is experiencing." Glavine has made 34 postseason appearances for a record of 14-15 with a career playoff ERA of 3.23, but he struggled in his last postseason start on limited rest. Glavine allowed seven earned runs in less than three innings for the Atlanta Braves in Game 4 of the 2002 NLDS against the San Francisco Giants.

"I`ll worry about this game," Glavine said before Game 1, "and worry about Game 5 if and when I get into that situation and make whatever adjustments I have to make. I`ve done it before. I know what to expect. I know how to prepare for that next start."

New York may need another lengthy performance from their newly-appointed ace after the Mets` bullpen showed signs of fatigue in Game 2. Their relievers gave up five earned runs, including three off usually 'lights-out' closer Billy Wagner.

"This is more the collapse of Wagner than the bullpen for the Mets," say Bodog.com's bookmakers. "Although (Guillermo) Mota gave up two runs, the Mets were still holding a 6-5 lead before Wagner stepped onto the mound. This was especially out of character for Wagner, so don`t expect a trend out of this."

Wagner allowed a home run, two doubles and a single in the ninth leading to the Mets` sticky situation for Game 5. Wagner told reporters he felt confident with his pitches but it seemed that the Cardinals batters just hit everything.

With questions surrounding his bullpen and the thinning rotation, Glavine is facing a situation that he has never seen in his long 20-year major league career.

"I`ve never had a postseason where I haven`t been surrounded by a pitching staff with three or four guys who could be a number one starter," Glavine told Newsday. "But it doesn`t change the way I go about things. My game is my game and that doesn`t change because I don`t have Pedro or Orlando [Hernandez], or Maddux or Smoltz for that matter."

Brave few stay in US gambling market

 

The Unlawful Internet Gambling Enforcement Act of 2006 amends Chapter 53 of title 31, United States Code, by adding at the end the following: "SUBCHAPTER IV PROHIBITION ON FUNDING OF UNLAWFUL INTERNET GAMBLING". Chapter 53 deals with Monetary transactions and is designed to; "increase the strength of United States measures to prevent, detect, and prosecute international money laundering and the financing of terrorism...(and) to provide a clear national mandate for subjecting to special scrutiny those foreign jurisdictions, financial institutions operating outside of the United States, and classes of international transactions or types of accounts that pose particular, identifiable opportunities for criminal abuse ." The Act makes unlawful the receipt by a gambling business of proceeds or monies in connection with unlawful internet gambling. It represents the first piece of Federal legislation to explicitly deal with online gambling, and it makes clear the US government's intention to stop the flow of funds from Americans to online gaming operators through criminal sanction. Under the Act "Restricted transaction" is taken to mean any transmittal of money involved with unlawful Internet gambling, whilst a "bet" is construed as including;

"the staking or risking by any person of something of value upon the outcome of a contest of others, a sporting event, or a game subject to chance, upon an agreement or understanding that the person or another person will receive something of value in the event of a certain outcome (and) any instruction or information pertaining to the establishment or movement of funds by the bettor or customer in, to, or from an account with the business of betting or wagering."

The term 'financial transaction provider' means a creditor, credit card issuer, financial institution, operator of a terminal at which an electronic fund transfer may be initiated, money transmitting business, or international, national, regional, or local payment network utilized to effect a credit transaction, electronic fund transfer, stored value product transaction, or money transmitting service, or a participant in such network, or other participant in a designated payment system.

In response to the passing of the Act Sportingbet and Leisure & Gaming sold off their US facing business for $1. PartyGaming, 888 and Betcorp all ceased taking bets from US citizens, whilst World Gaming went into administration. The collapse of the sector and the rapid sell off of company assets, without shareholder approval, was unprecedented in the corporate history of the UK.

Nonetheless, a number of concerns have taken a decision to stay in the US-facing online gambling market, including a number of publicly quoted companies.

International All Sports Ltd International All Sports Ltd (IAS) was formed in July 1995 by leading Australian bookmaker Mark Read, with seed capital provided by a small group of investors, including three leading Melbourne based bookmakers. The company was listed on the Australian Stock Exchange on 6 August 1999. On 6 August 2004 International All Sports Limited merged with fellow Australian bookmaker Canbet Limited, under the terms of which, Canbet shareholders received 1 IAS share for every 25 Canbet shares they held. The Northern Territory Racing Commission subsequently awarded a sports bookmaking licence to Canbet, allowing the company to operate a 24/7 internet and telephone race and sports betting service.

In response to the passing of the Act the company issued the following statement to the Australian Stock Exchange;

"The Board of International All Sports Limited is disappointed that the USA Government is passing laws to circumvent its commitment under the General Agreement of Trade and Services to the World Trade Organisation to allow free international trade in an effort to protect USA gaming companies that operate in the USA. The Board notes that USA horse racing has been exempted from the legislation and as such would not affect the business of IASbet.com. The financial effect on Canbet, the international brand of IAS that operates out of the United Kingdom is not expected to have any financial effect as to the operating profit of the group. The Board has taken legal advice and will continue to take further advice with the objective of understanding the regulations and procedures which have yet to be completed."

Wednesday, October 18, 2006

Gamingking says chief executive resigns

 

Gamingking PLC, a provider of online gambling services, said Monday that Nicholas Watkins resigned as chief executive. Watkins is the latest executive of a British online gambling company to resign his role after Congress introduced legislation to ban Internet gambling in the United States. Sportingbet PLC Chairman Peter Dicks resigned last month after being detained at New York's JFK Airport for illegal online gambling. A judge later cleared Dicks to return to London after New York Gov. George Pataki declined to sign a warrant extraditing him to Louisiana where the arrest warrant was issued. The directors of World Gaming PLC resigned on Friday, leaving the company in the hands of administrators. Watkins' resignation takes effect Oct. 31.

Senate race plays on gambling

 

Barry Metcalf won't give odds on his chances of winning a state Senate seat Nov. 7. But the Republican thinks his strong opposition to expanded gambling provides him "a great shot" of defeating Democratic incumbent Ed Worley. Metcalf, who lost to Worley by 1,901 votes for the 34th Senate district seat four years ago, has tried to make gambling the hot-button issue of the campaign in the district made up of Madison, Rockcastle and Lincoln counties. Democrats have a majority in Madison and Lincoln counties, while Republicans control Rockcastle. "This election is a referendum on casino gambling," said Metcalf, who hopes to return to the Senate. He was in the chamber from 1994 through 1999 and has plastered on his Lexus a sign for this fall's campaign that reads, "Re-elect Barry Metcalf State Senator." "If Ed Worley gets elected in November, this state will soon have casino gambling," Metcalf said. "If he does not, Kentuckians won't have to mess with it." Worley, the Senate Democratic floor leader, compares Metcalf's constant barrage on gambling to "a yapping dog." He says he thinks voters will re-elect him to a third four-year term because of his "ability to produce for the district in two areas: education and funding local projects." Worley, who has been in the legislature eight years and has served as minority leader for four, points to education funding he has supported in the legislature, especially $113 million for facilities at Eastern Kentucky University in Richmond since 2000. His campaign ads also tout hundreds of millions in projects he has garnered for his district. "I'm proud of what I have done for my district," he said.

Worley, former city manager for Richmond, has never been on a general election ballot for the state Senate without facing a Metcalf. In 1998, he beat Garrard County's Mark Metcalf, Barry's younger brother, who now is a federal immigration judge in Miami Beach.

Worley accuses Barry Metcalf of misrepresenting his views on expanded gambling.

"He's painting me as a primary force behind it," said Worley, who advocates for allowing Kentuckians to vote on a constitutional amendment that would allow casinos.

Metcalf has been passing out to media in the district copies of newspaper reports that record Worley's concern in recent years that Kentucky is losing millions to Indiana's gambling boats. Metcalf says the reports are "proof that Worley will work to bring casinos to Kentucky."

Worley calls Metcalf's attempts "ridiculous" and says he "would not lobby anyone to vote one way or another on the issue. I'd respect each person's vote."

Asked how he would vote on casino gambling if the General Assembly ever should put the measure on a statewide ballot, Worley said, "I'd have one vote. I'd cast that vote in privacy."

Metcalf said he will "never support casino gambling.

"It's immoral. It's for losers. It will make a huge number of people poorer," he said. "It will cause many social problems for the entire state while only benefiting a handful who will make a bundle off of it."

Although opposed to casino gambling, Metcalf said he would not work to ban horse racing, bingo or the Kentucky lottery.

Though some prominent Republicans were cool toward Metcalf's 2002 campaign because he had challenged Jim Bunning for the U.S. Senate, Metcalf is getting help from them this year.

"I think some in the party who were upset with Barry is old news," said Senate Minority Leader Dan Kelly, R-Springfield, who recently attended a fund-raiser for Metcalf.

Metcalf also is trying to gain political advantage by talking about a recent court case involving Worley.

Last month, a federal judge dismissed a civil racketeering case against Worley and his business partner Allen Grant Jr. U.S. District Judge Joseph Hood said that Earl Estes, Worley's former business partner, could not prove that there was a "pattern of racketeering activity" in the sale of seven parcels of land at the intersection of Ky. 52 and the Eastern Bypass in Richmond.

Hood said the allegations in the case were outside the jurisdiction of the federal court, but said Estes could pursue his claims of fraud in state court. The case has since been refiled in state court.

In his order, Hood did not address any of the questions about the land transactions that have been in dispute, including whether to admit as evidence a secretly taped conversation that Estes' attorney says shows that Worley lied in an April deposition.

Estes sued Worley, Grant and WG&T Builders, which is owned by Worley and Grant, in U.S. District Court in Lexington in January. He alleged that Worley and Grant committed fraud when they induced Estes to sell seven parcels of property that the three men jointly owned in Madison County for substantially less than fair market value. Worley and Grant have denied any wrongdoing.

"This is a property dispute that Barry is trying to paint as a scandal," Worley said.

If he is re-elected in November, Worley said, he will run again for Senate minority leader in January's legislative leadership races.

"I've been gettin' it done for my district," he said. "I want to continue that."

Metcalf said Worley should not tout projects he has brought to the district, since many were paid for with $4 billion in debt the legislature has approved in the last two years.

"What Worley does not tell you is that he has put this spending on a credit card and voters get the bill for the next 20 years," Metcalf said.

Gambling Online Becomes More Difficult

 

The port security bill that President Bush signed Friday included a provision severely restricting internet gambling. The law forbids American banks and credit card companies from processing online bets. It's been tough to enforce, but lawmakers say the new provision will take a big chunk out of the soaring Internet gambling industry. Americans account for half the online gambling market. The National Football League was among those backing the measure, while some banking groups lobbied against it. Some international online gaming companies began folding up their U.S. operations after the president signed the measure.

Deduct losses to offset your gambling wins

 

I was talking to God the other day and I told him I knew he wanted me to win the lottery and use most of the winnings to help others (after I paid for my car and house and vacation). I told him I would buy a lottery ticket and how much I won was up to him. So I bought 20 tickets. Guess how much I won? Zero, nada! I guess he was busy with something else. So I'm out $20. Can I deduct that as a gambling loss? Today, we'll talk about that. It seems that a number of people in El Paso have consistently lost money gambling, and some of them have lost much more than their spouses know about. No surprise there, until tax season. Seems that at the end of each year the casinos send a notice to the IRS reciting how much you won -- but not how much you lost. The IRS computer checks that information when you file your return. If there is no match, you may get audited. So how do you report gambling proceeds? Let's look at these issues. This raises two questions: How much can I deduct and how do I prove it?

Unfortunately, you can deduct gambling losses only to the extent of your gambling income. You can not deduct any more than what you won. Federal tax law does not allow you to treat gambling as a business that generates losses.

This means that even if you spend all of your salary on craps, you can not deduct those losses except to offset your winnings. I think that is unfortunate. I know several people who are professional gamblers. They view it as a business, and some are quite successful and have made a great deal of money gambling. For them this rule works an injustice.

For example, if they make money in one year, they pay taxes. If they lose money the next, they can't carry back the loss against last year's gambling income -- as could a business.

Anyway, the rule is clear. Gambling losses can only offset gambling income in the same year.

How does one prove gambling losses? Under the federal tax law, we have the burden to prove the amount of these losses by maintaining proper records.

The IRS wants us to keep a diary containing information such as where and on what date we gambled, the kinds of bets we made, how much we lost, any witnesses, etc.

Further, the IRS wants us to keep documents supporting these losses, such as wagering tickets, canceled checks and credit card receipts. If you gamble out of town, the IRS likes to see airline tickets and hotel receipts.

If we don't keep good records, we will be taxed on our gross receipts -- as reported by the casino -- and not our gross income (after deducting our losses).

So there you have it. If you're going to gamble, do it for fun and entertainment and keep records. Otherwise, you get nada!

Missouri's loss limit unique among gambling states

 

Every state with sanctioned casinos has a program in force to allow citizens to self-exclude themselves if they feel gambling is or has become a problem for them. Stiff criminal penalties are enforced in a majority of cases for people who break their self-imposed curfews by entering a casino illegally. Casinos in their advertising and via in-house signage and literature distribution must inform customers who are at risk of gambling addiction of the organizations to call for assistance. The state of Missouri, however, utilizes a law that is unique among gaming states. It enforces an automated loss-limit tracking system that restricts the amount of out-of-pocket money a gambler may lose during any one session to $500. The system has been in place ever since riverboat gambling began there in 1994, and in spite of periodic pressure applied to the state legislature to lift the restriction, it remains in force at all 11 of the casino destinations in the "Show Me" state. Iowa, the first state to legalize riverboat gambling, enforced a loss limit in the beginning but quickly withdrew it when droves of gamblers began crossing the border for the opportunity to bet as much as they wanted at the newly opened casinos in Illinois. Even though the casino barges and riverboats in Missouri are permanently docked, each day is still broken down into what is known as "phantom excursions" of two hours in duration. No gambler on a Missouri riverboat can lose more money out-of-pocket than $500 during any single excursion. Every gambler must have his player's card swiped before he enters a Missouri casino. This process activates the system that will monitor how much they bet. Unless you use that card when you play the slots or buy in at a table game, you can't gamble.

The restriction is controversial, even among officials who regulate gaming in the state. For example, Clarence Greeno, Missouri's Gaming Enforcement Manager, told me: "I think the loss limit puts us at a competitive disadvantage with neighboring states and prevents Missouri from becoming an entertainment destination."

The $500 loss limit affects slot play to a degree but it especially impacts the revenue-generating powers of the table games where single bet maximums are measured in the tens and even hundreds of thousands of dollars elsewhere around the country.

The gambling industry in Missouri is no small-time operation. Many of the nation's major companies, including Harrah's Entertainment, Ameristar, Isle of Capri and Argosy have made huge capital investments in high-quality casino hotel complexes in the St. Louis and Kansas City regions.

There's no doubt the state could generate much more revenue and the gaming companies more profit if the loss limit didn't exist, but Greeno hinted that at this point it's a matter of principle more than anything.

"Legislators vote the conscious of their constituents," he said, "and there's a strong feeling in this state that voters feel the loss limit helps protect people from losing too much money."

Greeno acknowledged that gambling addiction is no less of a problem in Missouri than it is in other states in spite of the loss limit, saying "pathological gamblers have a problem regardless of how much money they can bet."

Even with the restriction, Missouri has more than 10,000 people on the state's self-exclusion list, which under present regulations bans such a person from entering a casino for life and subjects violators to criminal arrest for trespassing.

Fraud study links gambling and fraud

 

Fraud study links gambling and fraud "Gambling is increasingly a major motivator for serious fraud," says John Stansfield, CEO of the Problem Gambling Foundation of New Zealand (PGF). "Since the last KPMG Fraud Survey in 2004, there has been a 60% increase in the amount of New Zealand fraud that was motivated by gambling. The 2004 study found that gambling was the highest motivator for serious fraud, and I would expect that trend to continue in 2006," says Mr Stansfield. "We are hearing of more and more fraud in New Zealand organizations. Studies such as the 2006 KPMG Fraud Survey and the 2006 BDO Not-For-Profit Fraud Survey both identify gambling as a motivator for fraud, which shows just how much gambling costs New Zealand organizations," he says. "We believe that the figures really are higher than reported, as a significant number of gamblers are not caught, so the crimes don't get discovered. In other cases, the crime is discovered but the link to gambling wasn't," says Stansfield. "Gambling crime is growing at an alarming rate, and gambling is the reason for the most serious property fraud in a number of cases." Some recent examples of fraud in New Zealand organizations include: Catering manager stole $6872 from his employer for gambling (Christchurch, September 2006)

Man defrauded friend out of $101,000 by lying so that he could gamble (Hamilton, July 2006)

WINZ case manager fraudulently accessed $102,475 by inventing a client so that he could gamble the money (Christchurch, July 2006) Man with a history of fraud, defrauded second employer of $5761 for gambling (Christchurch, July 2006) Woman committed benefit fraud of $11,000 for gambling (Nelson, July 2006)

Tuesday, October 17, 2006

Pathological gamblers need help

 

I am a pathological gambler. You may not recognize me as such, but I may be your co-worker, teammate, close relative or dear friend. My doctor has diagnosed my problem based on the following criteria set by the American Psychiatric Association. Preoccupation: I am preoccupied with gambling, reliving past gambling experiences, planning my next gambling venture, or thinking of ways to get money with which to gamble. Tolerance: I need to gamble with increasing amounts of money in order to achieve the excitement I desire. Escape: I gamble as a way to escape from my problems or relieving unpleasant moods of helplessness, guilt, anxiety or depression. Chasing: After losing money gambling, I often return another day in order to get even, but I end up only chasing my losses. Lying: I lie to my family, friends, therapists and others to conceal the extent of my involvement with gambling. Loss of control: I have made repeated efforts to control, cut back or stop my gambling, but without success. Illegal acts: I have committed illegal acts of forgery, fraud, theft and embezzlement in order to finance my gambling. Risked significant relationships: I have jeopardized or lost a significant relationship, job, educational or career opportunity because of my gambling. Bailout: I must now rely on others to provide money to relieve my desperate financial situation caused by my gambling. I understand that there are at least 1,200 pathological gamblers like me, and as many as 2,500 problem gamblers on Guam today. I know it's because we already have gambling like bingo, lotteries, cockfighting, poker games, pachinko and greyhound racing. Each one of us on average is $70,000 in debt, has stolen $130,000 and will cost our island taxpayers $10,000 to $30,000 each year in socioeconomic costs. A majority of us wish we were dead; two-thirds of us have thought of committing suicide; half of us have made suicide plans; one-fifth of us will make an attempt, and, sadly 1 percent of us will commit suicide. More than half of us have been divorced, one-fifth of us will file for bankruptcy, and one-sixth of us will end up in jail.

I never wanted to be a pathological gambler. I was introduced to gambling as a youth, and after that first "win" had increasing legal and illegal opportunities to gamble. Then I got hooked on more dangerous forms of gambling, like poker machines, and obviously I am unable to control this addiction.

I hear there is a proposal to bring slot machine gambling to Guam Greyhound. If this occurs, it will double the number of pathological and problem gamblers like me.

Harrison asked to give unto Caesars

 

While mapping plans for a multimillion-dollar expansion, Caesars casino executives have begun laying groundwork for the local government in Harrison County to share some of the project's costs. Caesars general manager Ed Garruto approached Harrison commissioners last summer about having the county pay several million dollars toward the improvements. The payments likely would come from about $10 million in profit-sharing money that Caesars pays the county each year under its development agreement. So far, $68.8 million from the casino has gone to create the Harrison County Community Foundation endowment, providing grants and scholarships to nonprofit groups, and a smaller "community fund" that boosts county operating money. No dollar figure has been put on the expansion beyond a $40 million first phase to re-brand Caesars as a Horseshoe Casino, or on how much Caesars wants from the county. But casino executives have estimated the benefits of the investment - the commissioners said they were told - to be an anticipated $150 million increase in annual gambling revenue. Commissioner James Goldman said it's too soon to say whether a partial rebate to Caesars would mean less profit-sharing money, given the projected increase in gambling. "What he (Garruto) said is ... `We'd like for you to help us do that expansion because you're going to benefit from it, just like we are,'" Goldman said. Clark Hardsaw, who owns the Longbottom and Hardsaw feed and fertilizer store in southern Harrison, said he wouldn't support a rebate of casino money. "I just don't understand why we need to pay a business to stay in business," Hardsaw said. "I can't see why the commissioners would want to do this." Garruto was out of town late last week and did not respond to questions sent to him via e-mail. But commissioners said he pointed out that similar partnerships have been forged by Casino Aztar at Evansville and Argosy Casino near suburban Cincinnati, where the cities have committed a total of $60 million toward improvements.

Harrison leaders said they have made no commitment.

Two commissioners said in interviews last week that they initially were lukewarm to Garruto's proposal for fear the Indiana General Assembly could reduce the amount of casino tax money paid to Harrison and other casino communities in the next few years.

Hoosier lawmakers early last year considered reducing Harrison's annual casino tax revenue to $4million from the current $23 million - then backed off the proposal.

The scare over losing the money hasn't subsided.

Goldman said the commissioners are worried about locking the county into a significant rebate for Caesars' improvements when they can't say whether the legislature will slash its tax revenues.

"Our initial reaction (to Garruto) was, `How much is the state giving?'" Goldman recalled.

After the Nov. 7 election, county leaders might get a better sense of whether legislative leaders are still bent on reducing tax payments to Harrison and other communities with casinos, Goldman said.

"I really expect until the election comes around you won't see anything signed by us," he said.

Garruto recently sent the commissioners a copy of an Indiana casino trade group's newsletter with an article on Casino Aztar's improvement plans - and a note attached saying that Evansville had committed $10 million toward the project.

Until last year, Caesars Entertainment Inc. owned the $400 million gambling complex in Harrison, about 12 miles downstream from Louisville. It was acquired last year by Harrah's Entertainment Inc.

Harrah's has since told state gambling regulators it intends to spend more than $40 million to re-brand its 93,000 square feet of gaming space and 170,000-square-foot pavilion as a Horseshoe Casino.

A company executive also told The Courier-Journal in June that it expected to complete plans by early next year for a second phase of improvements to enlarge Caesars' existing 503-room hotel or build a second hotel tower.

Garruto told the commissioners that those plans include creating an upscale steakhouse to replace Portico Restaurant and enlarging a concert and live entertainment area, Commissioner Jim Heitkemper said.

Harrah's has said the expansion is proceeding, despite published reports this month that the company was the target of a $15.1 billion buyout offer.

Regardless of who owns Caesars, such expansions are a big trend in Indiana, said Ernest Yelton, the Indiana Gaming Commission executive director.

"There's so many projects in Indiana. ... It seems as though the entire industry" is revamping outdated facilities all at once after a decade in business, Yelton said.

Lawrenceburg Mayor Bill Cunningham said predictions that Argosy Casino would face tougher competition for gamblers' dollars in coming years motivated officials in his city to agree to rebates of up to $5 million annually for 10 years to help Argosy pay for its $350 million investment.

The city had a vested interest in backing Argosy's bid to stave off new competition if Kentucky and Ohio legalize casinos or slot machines at racetracks, he said of the June 2004 Argosy agreement.

"We're concerned about what's going on in other states, too," Cunningham said.

At the same time, Lawrenceburg stands to benefit from additional jobs and gambling revenue, he said. The Argosy expansion "is going to put another 1,000 jobs here, and this is going to put another $350 million on the tax base. We felt very comfortable with it."

Lawrenceburg, located four miles from Cincinnati's Northern Kentucky suburbs, has the richest deal of all 10 Hoosier communities with a casino. The city receives more than $30 million a year from Argosy's profit sharing and $20 million or more annually in gambling tax revenues.

The willingness of Lawrenceburg officials to share the cost of Argosy's project has set "the standard" in the state, Yelton said.

"The good people of Lawrenceburg thought it was a good idea," he said. "I wouldn't want to question that."

Caesars' pitch didn't surprise Gary Davis, president of the Harrison County Council. Once officials in Evansville and Lawrenceburg agreed to bear some of the costs, he thought it was a foregone conclusion that Caesars eventually would raise the possibility.

Stakes are high for online gambling in SA

 

In contrast to the United States government's criminalisation of online gambling, the South African government is legalising the industry in an attempt to regulate and control it. Online gambling - said to be worth millions -- is currently illegal in South Africa, but the Department of Trade and Industry has given a draft amendment Bill (which will allow for the licensing of online casinos in South Africa) to the Cabinet for approval. The draft Bill will be available for public viewing by the end of October, said Brian Muthwa, director of legislative drafting for the department. He said that hopefully the new law will be passed by the end of the first quarter of 2007. The draft Bill is based on a report conducted by the National Gambling Board (NGB), which stated that there is a need to license and regulate online gambling in South Africa. Control systems to identify problem gambling, money laundering or any other criminal activities will be provided for in the regulations. "Because there is no effective legislation existing, it was decided to outlaw internet or interactive gambling until effective regulation had been put in place," said Astrid Ludin, deputy director general of the consumer and corporate regulation division in the department. "We do not believe outlawing will stop [interactive] gambling, therefore it is better to regulate it," said Ludin. Online gambling makes up about 5% of the global gambling industry and is estimated to be valued at $22,7-billion, according to Christiansen Capital Advisers, a US-based service that provides gambling and entertainment industry analysis. Brick-and-mortar casinos in South Africa paid R2,1-billion in gaming taxes and VAT in 2005, of which the government received 37%.

So why wouldn't the South African government want to legalise online gambling if it means obtaining taxes from such a wealthy and growing sector of the gambling industry.

Chief executive officer of the NGB, Thibedi Majake, agreed, saying the legalisation of online gambling would mean a new revenue source for the government in the form of taxes and levies.

The South African law against online gambling prohibits "any natural or juristic person from offering or engaging in interactive gambling unless authorised by the Act or any other law in force within the Republic".

"Our interpretation of the Act is that any person who is gambling online through [internet casinos] is contravening the Act and should be dealt with accordingly," said Ludin.

But legal or not, a thriving online gambling industry already exists in South Africa and they're not exactly hiding. It's almost impossible to miss the flashy pop-up casino advertisements that occupy so much space on local sites like the Mail & Guardian Online, News24, iol and Ananzi.

Piggs Peak Casino, Silversands Casino and African Palace, three popular online gambling websites that cater for South Africans, spent over R10- million on online advertising in 2005/06.

Silversands Casino spent R5-million to advertise their internet games online, according to Rina Erasmus, a consultant for Nielson Media Research.

Piggs Peak spent R4,9-million, while African Palace spent R800 000, according to Nielson Media Research.

The marketing director of African Palace, who wished to remain anonymous, said African Palace had spent about R3,6-million on online advertising.

He said the online gambling industry in South Africa is growing rapidly. "It's only set to get bigger. It will grow tenfold in the next five years ... there wouldn't be a company spending millions on advertising if it wasn't worth it," he said.

The three internet casinos (which operate from other countries like Swaziland, Cyprus and The Netherlands, and over which South African law has no control) were reluctant to tell the M&G online the number of members they had because it would give confidential information to their competitors.

Despite the amount of money they manage to spend on advertising, Piggs Peak and Silversands insisted that the industry was small.

"Online gambling is not a huge industry in South Africa because people have limited access to the internet and worldwide, land casinos are always more popular," said Wendy Graaf, marketing manager for Piggs Peak (which has been an online casino for eight years).

Although she wouldn't say how many gambling members belonged to Piggs Peak internet casino, she said it wasn't even a fraction of a million.

Marsha du Preez, marketing manager of Silversands, also said Silversands did not have thousands of members in South Africa. "It's more like hundreds."

Although a South African online gambler is "contravening the Act" by using internet casinos like Piggs Peak, Silversands or African Palace, nothing is being done to arrest online gamblers because it is impossible to arrest gamblers in the privacy of their own homes, said Majake.

Peter Collins, executive director of the National Responsible Gambling Programme in South Africa, said that even if "people are gambling with offshore companies the police won't raid their houses at 3am and try to stop them".

He also said that the new US Bill, which wiped out $7-billion from a $12-billion industry, would not stop online gambling in America.

"Making online gambling illegal in the US will do exactly what prohibition has done in cases of prostitution ... it would go on underground, it would be controlled by organised crime instead of a regulated body."

It's also illegal in South Africa to advertise internet casinos "above the line", which means on television, radio and in print. Online advertising is legal because there are no geographical jurisdictions on the internet.

But once online gambling is legalised, so will the advertising. The manner and form of interactive-gambling advertising will be prescribed "to protect society against the over-stimulation of gambling", said Muthwa.

The legalisation of internet casinos may have negative consequences, said Du Preez. "If it is legalised then any Joe Soap could open up a casino and sometimes that's not always such a good thing," she said.

Newly licensed South African internet casinos will mean trouble for Piggs Peak, Silversands and African Palace.

Majake said new South African online casinos will take their cue from the brick-and-mortar casinos where there is "a culture of integrity".

Graaf said it would be costly to move operations from Swaziland to South Africa, so whether or not online gambling is legalised in South Africa, it makes no difference to Piggs Peak.

But while online casinos that offer games such as blackjack, poker, roulette and online slots might only be legalised this year, online sports betting has been legal for two years.

In fact, the situation for an online sports better in South Africa is the exact opposite to that of an online poker player. It's illegal for South Africans to place sports bets on overseas websites.

Hilton Hasson, website manager of Betting World (a South African-based sports betting website), said that bookmakers pay R100-million in tax a year to the South African government.

Hasson said that they would also benefit if interactive gambling was legalised because other international betting websites offer poker, which they plan to offer once it is legalised.

My day at the casino The soft sound of a piano lingers somewhere in the background, there's the subdued murmur of the hopeful crowds drowned out by the butterflies in my stomach as a voice says: "No more bets please". Then it's the whirl of the roulette wheel and all I can hear are my prayers for success. and the printer in the office.

Once you log onto Piggs Pig internet casino, an online gambling forum based in Swaziland, your computer screen is turned into a virtual Vegas.

The screen becomes a sea of bright colours, flashy displays, and lame African music which makes your fingers twitch, and gives you that same pleasurable guilty feeling as when you drive into Sun City or Monte Casino.

It takes about seven minutes to download the casino to your computer, which is free. Once you've done that, you can either open an account -- using a credit card, internet transfer or bank deposit -- or you can "practice play" (with fake money).

It sounds like a casino, it virtually looks like a casino and it's just as difficult to drag yourself away from the virtual poker table or the Triple Magic slot machine. It doesn't make annoying Nintendo-like noises if you lose and it makes uplifting noises when you win. You can even hear money dropping when you win on the slot machine.

There's only one tiny but enormous difference; there's a clock.

Unlike in brick-and-mortar casinos where clocks are nowhere to be seen, on the top right of your screen is your computer clock. But I swear the clock ticks faster because when I started playing roulette it was 10am and after five minutes of testing it out my boss asked me if two hours wasn't enough time to get the information I needed.

You can also choose which gambling chips you want to use on table games, whether it's R1 or R100.

But the very best, if not disturbing part of online gambling, is that no-one can hear you scream, swear and curse, unless you're gambling from the office.

Internet gambling has made it possible to distract yourself wherever you are as long as you have an internet connection and a computer. You can be at home, at work, at the airport, in a café or in a park and you'll still have access to a 17-inch casino.

Pa. bill would have casinos making statement

 

At 32 years old, Bill Kearney was a self-made millionaire who had overcome the limits of his ninth-grade education to own a thriving business. At 33, his life began to disintegrate. He was a compulsive gambler who was well on his way to losing his wealth, his drapery manufacturing business in Philadelphia and his marriage. "I was using every means possible of getting money to gamble, except robbing a bank," Kearney said. Kearney's spectacular self-implosion was caused by his lust for the blackjack tables. In the early 1980s, he began gambling at Atlantic City casinos and racked up more than $2 million in losses in only four years. Kearney blames only himself for his downfall, but wonders whether he could have avoided financial ruin if the casinos would have sent him a simple statement each month listing his winnings and losses. Now he is working with Pennsylvania lawmakers on legislation that would require the Keystone State's new slot parlors to issue monthly, credit card-like statements showing gamblers how much they have spent. "This whole crusade that I'm doing with the statements is to prevent other people from destroying their lives," said Kearney, now 55 and a mortgage broker in Philadelphia. Kearney, who has since stopped gambling, said compulsive gamblers may be too far gone to be helped by monthly statements. But the statements would serve as a wake-up call to casino novices who are at risk of betting over their heads, he maintained. "This is for the virgins, the sheep who never gambled before," Kearney said. "They're the ones who are going to be slaughtered." Facing intense opposition from casinos, the legislation has stalled in the Pennsylvania Legislature and seems a longshot for final approval, but the very idea of monthly gambling statements is shaking the gaming industry.

"You can understand why the casinos are against it," said Frances Gizzi, a clinical social worker who counsels compulsive gamblers at her private practice in Red Bank, Monmouth County. "If you're keeping your gambling in check, the casinos don't want that. It would prevent them from making money."

Atlantic City casino operators, hoping the proposal will die in Pennsylvania, are not saying much about the gambling statements while the issue is being debated by Pennsylvania lawmakers.

"If it ever comes to pass or is ever discussed here, then we'll comment on it. But it's a Pennsylvania issue. It's not a New Jersey issue," said Joseph A. Corbo Jr., president of the Casino Association of New Jersey, a trade group representing Atlantic City's gaming industry.

Robert M. Pickus, executive vice president and general counsel for Trump Entertainment Resorts Inc., argued that monthly gambling statements are unnecessary and would be too intrusive - a type of "Big Brother."

"To some degree, in my mind, I would equate these statements to a bar owner mailing out statements to patrons about how many drinks they've had," Pickus said.

Trump Entertainment, owner of three Atlantic City casinos, is competing for a license to operate one of two slot parlors that have been approved for Philadelphia under Pennsylvania's 2004 gaming law. Overall, there will be 14 slot parlors and racetrack casinos throughout Pennsylvania, with the first site preparing to open Nov. 14 near Wilkes-Barre.

Trump Entertainment has been negotiating with neighborhood groups for community benefits that would make its proposed Philadelphia slots parlor more palatable. In earlier drafts of the proposed agreement, Trump had consented to sending out gambling statements to customers on a quarterly basis. Pickus said the proposal was later dropped at the request of neighborhood groups after the negotiations focused on other issues.

Kearney said the gaming industry fears the monthly statements because they would create a paper trail allowing gamblers and their families to sue the casinos for gambling losses.

Nationwide, the full extent of the compulsive gambling problem is anyone's guess. The American Gaming Association, the casino industry's national lobbying group, estimates compulsive gamblers represent about 1 percent of the customers. The New Jersey Council on Compulsive Gambling says 5 percent is the figure for Atlantic City's casinos, with another 10 percent to 15 percent of the gamblers in danger of becoming addicts.

States and some casino companies have programs to help compulsive gamblers kick their habit. In New Jersey, for instance, gamblers may voluntarily place themselves on a "self-exclusion list" that bans them from entering casinos. More than 500 people have signed up for the program, according to the New Jersey Casino Control Commission.

"New Jersey is very concerned about the issue of compulsive gambling," commission spokesman Daniel Heneghan said. "We want to see everyone who comes here to the casinos to gamble responsibly. We think the programs we have to help people who have a gambling problem are indeed helping them. And we're always open to suggestions for better, more efficient and more effective ways of doing that."

Atlantic City casinos must include a toll-free number - 1-800-GAMBLER - in their advertising to direct people to a 24-hour hot line run by the New Jersey Council on Compulsive Gambling. Each year, the first $600,000 in fines that are imposed by the Casino Control Commission on the casinos for gaming violations go to finance the Council on Compulsive Gambling, Heneghan said.

When Kearney talks of his compulsive gambling, he stresses that he is a reformed compulsive casino gambler. He says he did not succumb to other forms of gambling - the blackjack tables were his vice.

Now, nearly 20 years after beating his addiction, Kearney is fighting the powerful casinos to get legislation passed in Pennsylvania for the monthly gambling statements.

Does Hayward card club have an ace up its sleeve?

 

Gambling has been a big part of this area's history, at least since the days when 19th century landholder Don Guillermo Castro lost most of his 22,000 rural acres - including today's downtown Hayward - gambling. All that remains today of the city's high-stakes past is the Palace Card Club, a downtown poker den that some consider a beloved institution and others wish would disappear. This week, the card room's fate will be placed in the hands of the Hayward City Council. The council must decide Tuesday night - its second consecutive hearing on the subject - if it will abide by or amend a longstanding city law that says the club must close down when its owner, 79-year-old Katherine Bousson, dies. Bousson remains healthy and active, but she is planning her estate and wants to hand over the business to her three children. Does the card room, which Bousson has run for many decades, interfere with the city's hopes for a trendier, family-friendly future? Or can it fit in comfortably with neighboring downtown businesses, enhancing the district as a destination for entertainment? "I think there's room in Hayward for a club like that," said Alameda County Sheriff Charles Plummer, a Hayward resident who famously "cleaned up" the city's troublesome gambling and red-light district as city police chief in the late 1970s and early 1980s. Plummer was speaking at a meeting Tuesday during which the council was supposed to vote on the issue. Instead, Mayor Mike Sweeney used his prerogative to table the vote for a week. The matter of the Palace Card Club has raised enough concern, Sweeney explained, that more merchants and residents should be able to weigh in. Julie McKillop, owner of Neumanali, an upscale restaurant and wine bar on B Street, said she has mixed feelings about the presence of a club she called the "last vestige of a bygone era."

Her restaurant has been touted as one of the flagship examples of downtown's burgeoning revitalization since it opened in 2004, but McKillop believes that success depends on the surroundings.

"The current revitalization is very fragile," McKillop said at Tuesday's meeting. "It's still a daily struggle for most of us."

Gambling was officially allowed in Hayward in 1950, and Bousson took over the club upon the death of her husband. She fought to keep it in operation as the city tried to curtail gambling about 25 years ago. Her efforts to keep it open succeeded, but on condition that the business close when she sold it or died.

All of the council members except Sweeney have spoken favorably about allowing Bousson to transfer her permit to her children.

"Hayward's downtown doesn't need to be G-rated and close down at 9 p.m. at night," said Councilman Kevin Dowling.

The Palace Card Club is open 24 hours every day.

"Entertainment is diverse," said Councilwoman Doris Rodriquez. "There is room in the downtown, there is room in the city, for a variety of entertainment."

When about a half-dozen gambling clubs lined Mission Boulevard in the 1970s, owned by proprietors with nicknames like "Jimmy the Hat," city officials at the time said they feared it would bring organized crime into downtown.

At the time, Plummer said, there was also a porn theater and 12 massage parlors, 11 of which he said were houses of prostitution.

Plummer said Bousson's club survived the city's purge of unwanted businesses because she was "a tough woman. Smart. Cooperative. Not a woman you could push around, but she was gung-ho."

He required her to bring in all her financial books, and, "We had no problems with her card club at all," he said.

The last major crime associated with the club happened when a patron was killed after leaving the club in summer 2005. The case remains unsolved.

City Manager Jesus Armas said he does not believe the club has been of great concern to the Police Department.

Betonsports, Prosecutors Strike Tentative Deal, Lawyers Say

 

Betonsports Plc., the British Internet bookmaker indicted in the U.S. for illegal gambling, has reached a preliminary deal with prosecutors to end a civil suit seeking to ban the company from doing business in the U.S. U.S. District Judge Carol Jackson in St. Louis granted the parties one week to complete what Assistant U.S. Attorney Michael Fagan said was a 21-page accord resolving a civil suit filed against the company in July by the Justice Department. ``My impression is there are no substantive disagreements,'' Fagan told Jackson today. A temporary order barring Betonsports from doing business in the U.S. has been in place since July 17. Neither side disclosed terms of the preliminary agreement in court. On July 17, prosecutors also unsealed a 22-count indictment charging Betonsports founder Gary Kaplan, former Chief Executive Officer David Carruthers and nine others with racketeering and violating federal interstate gambling laws. In 2003, the company's Web site, Betonsports.com, had 100,000 active players who placed 33 million wagers worth more than $1.6 billion, the U.S. has said. Carruthers, 48, was arrested in July as he changed planes at a Texas airport. He pleaded not guilty and is currently under house arrest in St. Louis. Kaplan is still at large. Six other defendants have pleaded innocent. President George W. Bush on Friday signed legislation making it illegal for credit card companies to collect payments for transactions with online gambling sites. Gambling on the Internet has become a $12 billion-a-year business that's growing rapidly offshore. Betonsports attorney Jeffrey Demerath told Jackson today that difficulty in assembling the company's board of directors for a review of the proposal was the primary obstacle to completing the accord.

``We received it Thursday afternoon,'' Demerath told the judge. ``We just haven't had the time to get everyone together.''

Outside the courtroom, Demerath declined to comment on the status of the criminal case against Betonsports. He doesn't represent the individual defendants.

Monday, October 16, 2006

Sportingbet sells for a buck

 

The post-crackdown value of web gambling companies in the US now have their answer - $1 a pop. Sportingbet pre-empted expected broad restrictions on gambling sites in the Unlawful Internet Gambling Enforcement Act by selling its US operations for the price of a one-drink tip to an American bartender. It also discharged $13.2 million worth of liabilities in anticipation of George W. signing off the act today to protect citizens' morals' and domestic gaming American businesses. "We are saddened to have to dispose of such a fantastic business as a result of political actions in the US Congress," said Sportingbet chief executive designate Andy McIver in a statement. You bet, except in the US, that they're sad about this because a ton of the company's value has just gone down the river courtesy of meddling intermediaries keen to protect the morals of citizens. The exits of Sportingbet and others from the US market is the final hand being dealt in a session that started with the arrest of BetOnSports chief executive David Carruthers in a US airport in July and led directly to participants losing billions of dollars in value.

Gambling with a crippling social ill

 

STEVE Bracks's keenly awaited pokies policy was effectively stillborn on the eve of its planned release earlier this year, when Opposition Leader Ted Baillieu grasped the initiative with a pledge to cut 5500 machines. It's not that Baillieu's policy was without flaws; for one thing it was uncosted. It also allowed for the removal in 2012 of idle poker machines gathering dust in the corners of gaming dens while more damaging machines remained in service. But it meant the Government had to sit on its policy in case it seemed inconsequential incomparison. Finally this week Bracks and Gaming Minister John Pandazopoulos wheeled out their policy to extend regional caps on poker machine numbers. And inconsequential it was. There were some minor new curbs on an industry that rips more than $2.5 billion from the pockets of Victorians each year. The Government got serious at last about ATMs in gambling venues, restricting them to dispensing $400 a day per person. And the maximum bet was reduced from $10 to $5. But according to former pokies addict and People Power candidate Gabi Byrne, this still allows a gambler to lose $120 a minute. The great shame about the policy is that it makes clear that while the Bracks Government has grasped the significance of problem gambling - there's a large boost for treatment services - it's not willing to take the hard decisions that will seriously reduce the effect of poker machines in the state. The much vaunted extension of the regional caps - designed to force pokies from poorer areas into wealthier ones - was underwhelming when the number of machines involved, 540, was less than one-third of that recommended by the Government's backbench committee. And the machines were being moved rather than being taken out of service. It's clear that revenue concerns were behind this decision, but the Premier and Pandazopoulos played dumb when asked about the effect of both options on the budget. They refused to say exactly what repercussions the policy would have on the $1 billion the state takes from taxes on poker machines each year, even though it's a near certainty they would have been given a detailed briefing on this.

That the central elements of both parties' policies are uncosted - although external estimates put the cost of the Liberal plan at $200million a year - doesn't augur well for sensible policy formation in the coming election. Labor has drafted its pokies policy against a backdrop of bulging government coffers. Treasurer John Brumby recently revealed the surplus to June this year was expected to be $825 million, almost double the previous estimate in May.

If the Government cannot reduce the prevalence of this pernicious form of gambling and reduce our reliance on pokies taxes in a period of economic sunshine, when will it be able to?

To describe poker machines as entertainment that adds some value to people's lives defies credibility. Even though anyone can grasp the mathematical reality that if you play pokies long enough you will lose - any wins or jackpots are simply a temporary deviation from the eventual loss - people continue to play the machines.

And too often those who play them are those who can least afford to, so they have become a form of taxation on the needy.

Sadly, it's an arrangement the Government seems perfectly comfortable maintaining. There was no talk from the Government this week of changing this situation and finding alternative and more equitable sources of revenue. There were lots of nice words in the policy documents about the dangers of problem gambling and an apparent recognition of the knock-on effects in terms of crime, welfare dependence and absenteeism, as well as the human cost of broken families, marriages and lives.

France, EU clash over online gambling

 

The European Commission is targeting PMU and Francaise des Jeux to end what is alleged to be a monopoly on Internet gambling in France, a report says. The controversy has grown with the surge of online gambling on the continent. The EU may still allow France to keep its monopoly under certain conditions such as exempting national lotteries from such control. The French national lottery is currently organized by FDJ, which also has implemented Euromillions, giving it a share of foreign markets, Paris link reports. It is the foreign market issue that has irked the EU whose commissioners don't like France allowing itself in foreign markets while not permitting competition at home, said the report. Similarly, online horse race betting with foreign-based sites in France is seen as resulting from PMU's control. The report said France may either be forced to open up its market to competition in exchange for a license and taxes, or ban online gambling altogether.

Empire Online says will close its US gambling unit

 

Gaming group Empire Online said on Friday it will terminate its business in the United States immediately ahead of a ban on Internet gambling which will have a "material" adverse impact on its future earnings. The group added that around 65 percent of its revenue is currently generated from U.S.-based customers, and it was one of a number of UK gaming groups such as PartyGaming Plc to end their gaming activities in the U.S. The moves came as U.S. President George W. Bush prepared to sign into law legislation to enforce the prohibition of Internet gaming. "The company's margins will also be affected by the loss of this revenue due to operational gearing and the higher gross margin generated from the USA business," the group said in a statement. The gaming group added it was confident it will continue to generate positive earnings before interest, tax, depreciation and amortisation for 2007, and it reaffirmed its intention to pay an interim dividend of 1.7 cents per share.

Bush Signs into Law Online Gambling Transaction Ban

 

As widely anticipated, President Bush this morning signed a bill whose principal purpose is to tighten security measures for the nation's sea ports. But attached to that bill at the very last minute -- in order to prevent Democrats running for re-election next month from stopping it -- was a federal ban on banking institutions knowingly transferring funds to businesses or individuals that may conduct gambling operations in states and areas where gambling is prohibited. It isn't an outright gambling ban, or "prohibition," but for several of the world's online gambling casino operators -- most of whom, curiously, reside outside the US -- it may as well have been. One key reason is that the law now mandates that banks work out some type of transaction security system within the next nine months, that can electronically block funds transfers to institutions on a blacklist. Even though this list may include certain online casino operators in this specific case, the technology could very well be extended in the future to apply to any kind of suspect organization, including potential organized crime or terrorist sources. During this week alone, five more British-based firms -- Leisure & Gaming plc., FireOne, Fairground Gaming Holdings, Sporting Bet, and BetCorp -- announced their exit from the US gaming market. Previously, the transaction ban was a bill unto itself, though it had been held up by significant opposition. A successful strategy late last month by Senate Majority Leader Bill Frist succeeded in getting the bill attached to a terrorism security bill that no one wants to be seen as openly opposing, at least this close to an election. Ironically yesterday, in a clear indication that, these days in the gaming business, you can't win for losing, the European Commission announced it is opening an inquiry into whether member nations are restricting access to their Internet gaming markets. Under EU law, it is actually illegal for a licensed business based in one nation not to conduct operations openly and fairly with other nations, even if that business is gambling.

Some of these European operations are state-owned, such as national lotteries, some of whose business is conducted online. If a European-based gambling firm or agency wanted to conduct online business legally under the new US law, it would need to implement the electronic protections yet to be devised, which would protect them from transacting with someone within a US state or territory where gambling is prohibited.

Under EU law, a member nation cannot prohibit or restrict citizens' access to any form of gambling, if at the same time that nation runs or sponsors its own lottery. France is one such state, and is one of the major centers for Internet-based gambling in Europe. Yet French authorities recently arrested executives of a Monaco-based gambling firm after they set foot in French territory, ostensibly for "violation of French gambling laws."

In the name of eradicating state-held gambling monopolies, such as those that EU commissioners claim exist in France and six other nations, lawmakers are pushing for new regulations which would mandate that state-owned and private gambling firms (those that remain) cannot withhold service to their customers based on where they're located.

Bush blow to online gambling

 

Online gambling companies based in Britain began folding the cards on their U.S. operations Friday as President George W. Bush signed a bill banning Internet gambling there. The closure of the most lucrative market in the world is a severe blow to the nascent online gambling industry. At least one company collapsed from the high costs of exiting the United States and others were damaged. The North American market accounted for the vast majority of earnings of Internet gambling companies based in London, which were caught by surprise two weeks ago when the U.S. Congress passed the Unlawful Internet Gambling Enforcement Act, making it illegal for banks and credit card companies to settle payments to online gambling sites. Shares in gambling companies sank rapidly after that announcement and Bush provided the final blow Friday when he signed the measure into law as part of a bill aimed at improving port security. Sportingbet and Leisure & Gaming both sold their U.S. operations for a token $1 Friday. In selling its operations to Jazette Enterprises of Antigua, Sportingbet offloaded $13.2 million of debt.

Meanwhile, World Gaming directors resigned, leaving the company in the hands of administrators. PartyGaming, the world's largest gambling company, said it had suspended all real-money gambling activities to customers in the United States. Empire Online said it would focus on gambling outside the United States, while 888 Holdings said it was considering its options.

The loss of U.S. business will be hard felt. U.S. residents account for half a market that is estimated to be worth $15.5 billion this year in "spend" value, according to the Betting Research Unit at Nottingham Business School. The spend value is the amount gambling companies win from their customers - or the amount gamblers lose - and is much less than revenue because most of the revenue is recycled to gamblers in the form of winnings.

Analysts said the industry was now cleaving in two. On one side are the London companies that are pulling out of U.S. operations. On the other are private offshore companies located in the Caribbean, like Jazette,

Sunday, October 15, 2006

UK firms flee U.S. gambling with $1 buyouts

 

Britain's Sportingbet and Leisure & Gaming both pulled out of the United States ahead of a ban on Internet gambling on Friday, each selling their U.S. operations to private investors for $1. Smaller rival World Gaming meanwhile said it was impossible to continue in business and called in administrators. All three companies were rushing to complete the deals before President George W. Bush signed a bill to prohibit Internet gambling into law on Friday. Sector leader PartyGaming and 888 have already announced their exits from the United States. "We are saddened to have to dispose of such a fantastic business as a result of political actions in the U.S. Congress," Sportingbet Chief Executive designate Andy McIver said on Friday. Sportingbet said it received $1 for the U.S. operations and had discharged liabilities of $13.2 million and avoided closure costs of $14 million. Leisure & Gaming Chief Executive Alistair Assheton led a management buyout of his group's U.S. operations for $1, rather than close them down and fire 300 staff. The exit from the United States comes after Republican legislators delivered a heavy blow to Internet gambling this month when Congress unexpectedly approved a bill to enforce prohibition of online gaming. Sportingbet's volatile shares rose by 5 percent in early trading before falling 12 percent to 57 pence by 1406 GMT, valuing the group at almost 240 million pounds ($447 million) -- less than a sixth of its value of 1.6 billion pounds in July before the start of the U.S. clampdown on Internet gaming.

Thank You for Gambling

 

In the recent movie "Thank You for Smoking," a tobacco lobbyist comes under fire for working to protect people's right to smoke. A similar movie could be made about gambling and the villain would be Representative Bob Goodlatte. The Virginia Republican has been fighting to enact legislation on Internet gambling for some time, and he can now finally claim a good deal of success with the passage of HR 4954, a port security bill with an anti-Internet gambling attachment. Goodlatte's Unlawful Internet Gambling Enforcement Act (UIGEA) is set to make it illegal for American banks and financial institutions to process online gambling payments from the United States. "The passage of this legislation is a step in the right direction in the fight against online gambling and will help to cut off the money supply to these illegal outfits," Goodlatte said. It is true enough that the legislation makes banks suffer the wrath that Goodlatte feels towards the online gaming industry, but a key question remains. Will tightening the rope around bankers' necks will really stop online gambling? Following passage of UIGEA, gaming companies took a beating. PartyGaming, the world's largest online gaming company, fell out of the FTSE 100 while World Gaming suspended dealings in its shares due to "uncertainty over its ability to continue trading." Most of the world's online gaming firms are not located in the U.S. due to government hostility, but now it appears that even those based in London and elsewhere are subject to America's dominance in a global economy.

That's only the short term. In the long term, people who want to gamble online will find ways to do it, even if it means they have to visit shady spots on the Web. Government policies that push innocent consumers into potentially dangerous black markets are misguided and harmful. Goodlatte's bill should also shame his supporters because it hypocritically exempts large parts of America's gambling industry, including government-run lotteries.

Online gambling's losing hand

 

We won't be among the mourners when and if President Bush signs a bill to ban Internet gambling that passed Congress in the early hours of Sept. 30. The Web has opened up many marvelous horizons: easy, affordable global communication, fingertip access to a virtually infinite storehouse of knowledge, and the ability to shop for merchandise in the world's biggest department store. But there's also a downside to the Internet, as Rep. Jim Leach, R-Iowa, one of the sponsors of the legislation noted. The problem is particularly acute for young people who tend to be on the Internet frequently. "Never before has it been so easy to lose so much money so quickly at such a young age," he said. The ban, attached to a port security bill that Bush is expected to sign today, bans most forms of Internet gambling and makes it illegal for credit card companies and banks to make payments to those who operate online gambling sites. The legislation exempts state-run lotteries and the horse-racing industry.

Online Gambling Ban Berths In Ports Bill

 

Officially, the bill President George W. Bush will sign Friday is aimed at making the nation's ports more secure. But the part that's getting all the attention is about Internet gambling. It includes a big crackdown on online betting, which is already illegal in most cases. It's been tough to enforce, but lawmakers said the new provision will take a big chunk out of the soaring Internet gambling industry. The amendment will stop gamblers from using credit cards, checks and electronic transfers to cover their losses. The National Football League was among those backing the measure, while some banking groups lobbied against it.

Online gambling firm collapses

 

The beleaguered online gambling industry is bracing itself for a wave of company collapses and redundancies, after World Gaming collapsed into administration today. It is the first company to crash, following the shock decision of the US senate to outlaw online gaming last month. President George Bush is expected to sign the legislation into force later today. All the online gambling companies are racing to close or sell their US operations by the time he signs. 888 emerged today as the latest to be looking for a suitor. Asked if the company would go private, chief executive John Anderson told Dow Jones: "I think that's got to be looked at." He said all options are being considered, including opportunities to expand the business in Europe. Yesterday, Sportingbet sold its US sports betting and casino business for a nominal $1. The secured creditors of World Gaming, understood to be Barclays Bank, pulled the plug on World Gaming earlier this morning and called in administrators UHY Hacker Young. The administrator has issued a statement saying: "The secured creditor has subsequently concluded that it is reasonably likely that administration will achieve a better result for the Company's creditors than would be likely if the Company were to be wound up." All the directors have resigned. The company has operations in Antiqua, Vancouver, London but it is not clear how many employees will lose their jobs. Gibraltar is likely to be particularly hard hit by the US crackdown. One in ten adults of the island works for the online gambling and betting industry.

EU launches online gambling restrictions probe

 

European Commission competition officials are crying foul over plans by some European states to restrict foreign sports betting and gambling services from operating in their countries. Brussels is considering legal action against protectionist barriers planned by France, Italy, and Austria that effectively ban foreign online gaming and casino operators. In total, nine EU member states face possible action over the issue. Germany, Holland, Hungary, Denmark, Finland, and Sweden are already under investigation. Online gambling operations, hard hit by US moves to clamp down on online gambling that have included anti-gambling legislation and the arrest of key execs flying through the US, have welcomed the EU's stance. "We hope these new proceedings will put an end to the witch-hunts against private EU licensed operators," European Betting Association secretary general Didier Dewyn said. As a first step in possible proceedings, EU commissioners are asking for governments to explain their policy on online gambling via an official request for information, The Guardian reports. The move follows a barrage of complaints from online gambling firms to EU internal market commissioner Charlie McCreevy. Each government has two months to respond to questions asking how they reconcile their policies with EU laws that call for a free market in goods and services. Possible infringement proceedings may follow if governments are unable to satisfy Brussels that market regulations they have applied are "necessary, proportionate and non-discriminatory". The EU's decision to launch an inquiry does not necessarily herald a push to liberalise gambling services. National monopolies might be allowed to operate providing member states can establish that this is in the public interest. A key ruling by the European Court of Justice said restrictions on online gambling need to be "consistent and systematic" so that limiting the market to prevent fraud or combat gambling addiction is lawful. A number of federal states within Germany have applied this ruling to restrict the online gambling market. But Commissioner McCreevy questioned how France can block foreign competition on the basis of preventing addiction when its online gambling market has expanded to reach a turnover of ?17bn a year. France has already been asked to amend an economic patriotism law enacted last year that restricts foreign investment in a range of industries including defence and sports betting.

Saturday, October 14, 2006

Sale of Harrah's Entertainment could break the mold for Nevada regulators

 

A bid by a pair of private-equity firms to buy Harrah's Entertainment, if approved, will offer the latest evidence of a flourishing symbiotic relationship between Nevada regulators and the casino industry. A vital role of regulators is to set the bar for who is allowed to operate casinos in Nevada, and to conduct background investigations into their character. Reputation, honesty and credibility are everything in an industry that is based on the tracking and handling of cash. That oversight is all the more important in Nevada, because nearly half of the state's general fund revenue comes from gambling taxes. For that same reason, Nevada gaming regulators have a second vital role: to encourage investment in the casino industry. And for decades, the state's regulators have had to roll with the industry to accommodate different kinds of companies that want to operate casinos. After all, what's good for the industry is good for Nevada. Now, regulators may be asked to review the newest flavor of Strip capitalists - a group of private investors, including some who prize their privacy. The state won't want to stand in the investors' way, but at the same time it will need to make sure that the relevant managers are up to running a huge casino company. In Las Vegas' early days, when casinos were owned by individuals or small groups of investors, the regulator's job was relatively simple: Make sure each investor was qualified to operate the joint.

Beginning in 1967 with billionaire Howard Hughes' purchase of several casinos from their mob-controlled owners, regulators began to shift their sights from the few people who owned casinos to major corporations with tens of thousands of shareholders.

By then, casinos had become a vital contributor to state tax coffers, forcing regulators to wrestle with the problem of how to exert control over an industry upon which the state depended.

Thanks to legislation to facilitate Hughes' purchases, regulators effectively removed the mob from its controlling position in the casino industry. But disclosure rules and restrictions on trading stock still kept major corporations out of Nevada until 1969, when the state passed additional rules allowing public companies to own gaming subsidiaries without submitting all of their shareholders to background investigations.

Under Nevada's licensing rules that apply to publicly traded companies, regulators reserve background investigations for key decision-makers such as executives and directors as well as shareholders owning more than 10 percent of company stock.

Ordinary stockholders, funds and institutions that own casino stocks aren't required to be licensed under the premise that they are passive investors who don't influence how Nevada's casinos are run.

The corporate gaming rules changed the state forever by fueling unprecedented investment in Nevada. The first major corporations with many shareholders began to flood into the state after Hughes, acquiring single-owner properties, building new casinos and generating the vast majority of the state's gambling revenue.

Wall Street has done well on Las Vegas Boulevard: Today, a pair of publicly traded companies - MGM Mirage and Harrah's - are collectively worth more than $25 billion.

And now, Las Vegas is seeing yet a third kind of casino ownership proposal: private equity companies such as the ones vying for Harrah's. If consummated, the bid could fuel another sea change by attracting a host of privately held investment companies that want to own more than just a partial stake in Las Vegas casinos. And still - even as they promote industry growth - state regulators will have to subject newcomers to background checks unheard of in other sectors of American business.

Like corporations with public stock, private equity funds have hundreds, even thousands of investors. Unlike retail mutual funds, they accept individual investments in the millions of dollars from pensions, endowments and wealthy individuals who include prominent businesspeople and politicians.

While casinos had been eyed for years as stable and lucrative investments, private equity funds avoided them, unwilling to fill out license applications more than 70 pages long in which regulators probe managers' relationships with business associates and even ex-wives.

Indeed, an agency that both promotes gaming and regulates the industry may seem to be working at cross purposes: The same licensing requirements that are designed to keep out unscrupulous people such as mob associates and tax dodgers have also kept out squeaky-clean investment firms with money to burn but who desire to keep financial details and investors out of the public eye.

But these groups didn't want to walk away from Las Vegas, so they found a creative way to use Nevada's corporate licensing rules to pass regulatory muster - by structuring their deals so that only a few decision-makers are investigated.

It is their strategy to clump the vast majority of shareholders into separate entities whose members hold nonvoting shares. Because they are ostensibly passive investors, regulators don't need to license them, and instead focus on the few people who direct the funds and who hold voting shares.

The dual voting structure, while fairly new, has allowed these funds to invest in Nevada casinos without the state needing to change its regulations.

With investment banks and fund managers investing millions and even billions in casinos, regulators don't harbor the same concerns about mob influence or shady business practices that they did years ago.

Each private equity deal is structured slightly differently and has been examined to ensure that the key managers making investment decisions are licensed rather than front men cherry-picked by management to undergo background checks, Gaming Control Board member Mark Clayton said.

The bid for Harrah's would not only be the biggest deal in history but the first in years to allow private equity firms to acquire 100 percent of a Nevada gaming company. Other recent deals have involved partial ownership of casinos that are still run and operated by experienced Nevada operators.

Regulators still retain the right to investigate any shareholder of a casino investment - big or small - at any time.

"That's a huge caveat," said Ellen Whittemore, a gaming attorney with Lionel Sawyer & Collins and former deputy attorney general. "These are great investment vehicles for Nevada, but the bottom line is that if you have any investment in a casino you always have the potential that you'll be required to submit an application.

Ottawa police stage sweep, lay illegal gambling charges

 

After a six-month probe, Ottawa police conducted a late-night sweep Wednesday of four establishments believed to be operating illegal gaming houses and specifically Texas Hold'em poker. As a result, eight men have been charged with keeping a common gaming house, 60 are charged with being found in a common gaming house and one man has been charged with two counts of possession of a prohibited weapon. Police seized gambling equipment, furnishings, electronics and entertainment units and over $12,000 in cash and marijuana. The raids, carried out at about 11.30 p.m., took place at the Poker Loft, 1211 Rooney's Lane, Ottawa; The Ottawa River Club, 1111 Wellington Street, Ottawa; Uppercut Club, 2742 St Joseph Boulevard, Ottawa and The Royal , 140 Osgoode Street, Ottawa, Charged with keeping a common boarding house are: Poker Loft: Robert Wilson, 35, and Costa Glikofridis, 27; The Royal: Philippe Florack, 21, and Steven Strawbridge, 23; Uppercut Club: Christian Chenier, 24, and Mohammed Jabboury, 58; The Ottawa River Club: Marc Bourada, 51, and Michael Bourada, 22.

Gambling for development

 

One of the strongest benefits of bringing gambling to Northeast Ohio will be the $75 million that can be used by the region to stimulate economic development, said Joe Roman, president of the Greater Cleveland Partnership. GCP is one of the groups that crafted the constitutional amendment that is state Issue 3 on the Nov. 7 ballot. In a pitch Wednesday to the Crain's editorial board, Mr. Roman touted the $850 million in college scholarships that his group says will be a significant benefit of bringing first slot machines and then table games to Northeast Ohio. But he conceded that part of the reason for his group's support was the belief that there was no other way to get the economic development seed money GCP believes the region needs. He compared that to the billboards he sees around the area that promote gambling casinos in Michigan, New York State, West Virginia and Canada - and, indirectly, the broader investment in their regional economies the casinos bring along. He said he couldn't imagine a similar billboard that read, "Invest in Ohio, We Don't Have Gambling" providing the same economic boost. The group chose to make the issue a constitutional amendment, he said, "because we don't have a legislature willing to deal with the issue." Mr. Roman predicted that, if the issue passes overwhelmingly in Northeast Ohio, "we'll get table gaming" in Ohio.

Decrease in Gambling Treatment Calls Attributed to End of TouchPlay

 

Gambling addiction counselors say unplugging the Iowa Lottery's TouchPlay games has made a big difference in Iowa's gambling climate. They say, when the legislature banned the machines last March, the calls to gambling treatment hotlines dropped off. The machines were in more than 6,000 grocery stores, bars and convenience stores. A counselor for gambling addicts calls them as "the crack cocaine of gambling."

Online gambling - All bets off?

 

With the US government cracking down on online gambling, what are the odds for the industry in America? It's an impressive list: the September arrest of Peter Dicks, non-executive chairman of Sportingbet; the July arrest of David Carruthers, chief executive of BetonSports; and legislation passed by the US House of Representatives in July to prohibit banks and credit card companies from processing payments to offshore internet gambling sites. These are, some say, a strong series of opening punches by the US government in a fight against online gambling. But industry analysts, including Christiansen Capital Advisors, a market research firm that tracks online gambling trends, believe it will prove only a glancing blow. The charges against Carruthers have at least temporarily shut down BetonSports' business with US customers and sent shockwaves through the rest of the industry. Some BetonSports rivals, however, insist it is little more than an isolated case against a company that flaunted online sports betting and took bets over the telephone, both clearly prohibited under US law.

European Commission threatens legal action on gambling

 

The European Commission today threatened legal action against France, Italy and Austria for restricting sports betting and gambling services, including banning foreign online gaming and casino operators. Its move, bringing to nine the number of EU countries whose gambling legislation is under investigation, was hailed as a shot in the arm by the ?50bn European betting sector - several of whose leading executives have been prosecuted for offering cross-border services. Didier Dewyn, secretary general of the European Betting Association, said: "How long must EU-licensed and regulated operators endure legislation which causes wrongful financial harm and deprives their executives of even the basic right to travel freely in EU member states? "We hope these new proceedings will put an end to the witch-hunts against private EU licensed operators." His comments follow last month's arrest in Monaco by French police of the two co-chief executives of Austrian online operator bwin on charges of illegally offering gambling services in breach of national laws guaranteeing a shared monopoly to local operators PMU and la Francaise des Jeux. There are 2000 illegal casino websites in France. Charlie McCreevy, internal market commissioner, said the "official request for information," the first step in putative legal proceedings, merely sought to discover whether national laws complied with EU treaty rules on the free movements of services. He said he had received a large number of complaints from operators.

Mr McCreevy, an ultra-liberal who, with fellow commissioners, initiated a series of infringement proceedings against EU member states today to enforce the single market, said the decision did not call into question national monopolies as such nor push for the liberalisation of gambling services.

The commission, which gave the governments two months to respond, said countries were still entitled to protect the "general interest" provided that any restrictive measures were necessary, proportionate and non-discriminatory.

In a key ruling, used by several German federal states to ban bwin and other online operators, the European Court of Justice has said such measures need to be "consistent and systematic" and has allowed restrictions aimed at supporting public order (the prevention of fraud) or combatting gambling addiction.

Germany, Holland, Hungary, Denmark, Finland, Sweden and Italy are already under investigation.

In a sideswipe at French protectionism, Mr McCreevy questioned how the state could ban European online operators access to the sport and horse-race betting market in order to prevent addiction when "the French sport betting market continues to expand and offer more choice and opportunity for consumers to bet."

France, whose casinos turn over ?17bn a year, was separately told to amend a controversial 2005 decree, part of the government's "economic patriotism", restricting foreign investors in key sectors such as defence on public security grounds. It also applies to casinos.

Italy, which banned overseas online betting in February, was warned by the commission that its restrictions on "legitimate" operators were disproportionate - "particularly in the light of the expanding sports betting market which appears reserved to domestic operators."

Liverpool-based Stanley International Betting, which filed a complaint against the Italian authorities in February, welcomed the opening of infringement proceedings which follow a November 2003 ECJ ruling in its favour.

Friday, October 13, 2006

Gambling Advocates Hedging Their Bets

 

Maryland supporters of legalizing slot machines have had an outspoken champion in Gov. Robert L. Ehrlich Jr., but some key gambling enthusiasts are now putting their money behind his Democratic opponent in the race for governor. Campaign records show that donations have started going to Baltimore Mayor Martin O'Malley, who has pledged to support a limited gambling plan that would allow slot machines at Maryland racetracks. Slot supporters say O'Malley might have better luck persuading gambling opponents in the Democrat-controlled House of Delegates to ease their resistance. "It's my view that, from a political standpoint, anyone in the governor's office that's a Democrat may have a better chance to deliver on slots," said Tom Bowman, a veterinarian and horse breeder who served as president of the Maryland Horse Breeders Association during the years when Ehrlich pushed hardest to expand legalized gambling. Although Bowman said he has held back from giving to either candidate so far this year, as have many of the largest gambling donors, he confirmed that several high-profile advocates who backed Ehrlich four years ago have turned up at O'Malley fundraisers. Several key players have started hedging their bets. The Thoroughbred Breeders and Horsemen's political action committee, for instance, has given $3,000 to each candidate. Joseph A. DeFrancis, who owns shares of Pimlico Race Course and Laurel Park, was a major supporter of Ehrlich's in the aftermath of the 2002 campaign. He donated $2,000 to O'Malley in August and attended a fundraiser for him last week.

Ehrlich raised more than $60,000 from gambling interests from 2002 to 2004 while he was pushing the General Assembly to approve his sweeping slots plan. During the past two years, though, O'Malley started closing the gap, raising more than $12,000 as Ehrlich took in $30,000.

Ehrlich said that he has seen evidence of the change and that it bothers him.

"They're playing both sides," he said. "I've been saying it for four years: Left-leaning groups don't play that way. We shouldn't either. People should be supporting those who agree with their platform."

Asked whether he understood their reasoning -- that a Democratic governor might be more successful working with the legislature to pass slots -- Ehrlich said he did not.

"If you took that approach, you'd never elect a Republican governor," he said.

Ehrlich's closest advisers have tried to fight back.

It's Voinovich vs. the forces of gambling

 

U.S. Sen. George Voinovich thinks he can keep casino gambling out of Ohio one way or the other. He's not up for re-election this year, but he's traveling the state spearheading the Vote No Casinos effort that is opposing a ballot initiative to bring slot machines to Ohio's seven race tracks and two sites in Cleveland. That initiative, called "Learn and Earn" by its supporters, is State Issue 3 on the Nov. 7 ballot. Back in Washington, Sen. Voinovich he is working on a bill with Sen. John McCain, R-Ariz., to make it harder for Indian tribes to open casinos when state leaders oppose them. The goal is to ensure that federally protected tribal gambling can't enter Ohio should Issue 3 fail, as Sen. Voinovich hopes it will. Sen. Voinovich long has been an opponent of gambling, dating back to the 1980s and 1990s, when he was mayor of Cleveland and the state's governor. But he especially opposes the current issue. "This is an enormous windfall for Tower City Center and Jeff Jacobs," he said, complaining that Issue 3 would specify exactly which developers will own and operate the two free-standing casinos that could be built in Cleveland. "If we're going, from a public policy standpoint, to raise money through casino gambling, this is not the way to do it."

Sen. Voinovich told Crain's editorial staffers at a Tuesday meeting that his opposition to state-sponsored gambling stretches back to a distaste for the Ohio Lottery. He called slot machines "the crack cocaine of gambling," and said gambling most hurts the people who cannot afford the money they lose.

Sen. Voinovich said he fears that should gambling come to the state, payday loan businesses will blossom and mortgage foreclosures will rise.

EU asks Austria, France, Italy for information on gambling laws

 

The European Commission said it has asked Austria, France and Italy to provide information on national legislation restricting the supply of certain gambling services. The move follows similar requests issued to Denmark, Finland, Germany, Hungary, Italy, the Netherlands and Sweden. The commission said it wants to ascertain whether the countries' measures are compatible with EU rules guaranteeing the free movement of services.

Electronic Clearing House says gambling act to hit 2007 results

 

Electronic Clearing House Inc. on Wednesday said a portion of its business and future results of operations will be affected by the recently passed Unlawful Internet Gambling Enforcement Act of 2006. The company said it will phase out any services related to check processing activities for Internet gaming before the 270-day regulatory determination period expires. The loss of revenue and net income, arising from these services, will have a significant negative effect on the company's business and results of operations in fiscal 2007, the provider of electronic payment processing solutions said in a statement.

Israel opens first horse racetrack despite protest, rabbinical condemnation, gambling ban

 

Angry demonstrators and rabbis as well as a ban on gambling failed to stop the inauguration of Israel's first horse racetrack, as thousands of fans cheered the four-legged competitors. It's not much at this point - just a collection of collapsable tents with a makeshift grandstand in the middle of a field in northern Israel - but as the horses turned the final corner before the finish line on Wednesday, it looked, sounded and smelled like the real thing. That's what bothers the detractors. A few young animal rights activists broke onto the track, charging that race horses are abused, and had to be dragged off by police. Five were arrested. One of Israel's chief rabbis condemned the event as frivolous. And a large sign overlooking the new track reminded spectators that horse race gambling is illegal in Israel. Even so, organizers of the event and investors called the turnout a success and said they it demonstrated the need to legalize gambling and build up a permanent horse racing industry. "The fact that people are running here into the stadium, it testifies that it's a need and that they want to support it and they want it to happen," said Danny Atar, head of the Gilboa Regional Council, who is leading the push to have the sport legitimized. The debate over horse racing dates to 2004, when Israel's parliament passed a law allowing construction of race tracks. Animal rights activists with a group called "Hakol Chai" filed an appeal with the Israeli Supreme Court against the law. A hearing is scheduled in December.

The opponents gained a key ally when Sephardic Chief Rabbi Shlomo Amar issued a religious ruling against horse racing, calling it frivolous activity and noting its association with gambling and allegations of cruelty to animals.

Some experts dispute the cruelty charge, claiming that the valuable race horses are among the best kept animals in the world.

Just as the ban on gambling does not deter Israelis from placing millions of dollars in bets on Internet gambling sites and illegal casinos in Israeli cities, gambling was part of Wednesday's horse race. Fans said they knew of bets placed in secret among private groups and friends.

"Gambling is the main starter and the main economic way to make the race track succeed," said Atar, who said he did not know that illegal gambling was taking place. He hoped that in three to four months the Israeli government would approve horse race gambling.

Israeli businessman Ronen Kristal, who invested the first $700,000 (?560,000) in the track, said other investors are waiting for gambling to become legal. He said it would cost about $14 million (?11.2 million) to finish the project, which is expected to create about 3,500 jobs.

Online gambling companies "coming together" at EiG

 

"One thing you need to realize is that this industry has always been under siege and probably always will be," said Sue Schneider, CEO of River City Group in her welcoming remarks to attendees of the European I-Gaming Congress and Exhibition (EiG) Wednesday morning. More than 1,000 delegates are in attendance at the Clarion Events ATE/River City Group produced event this week where the theme is "coming together." Staggering problems have lately emerged on both sides of the Atlantic for the global companies that deal in the interactive gambling space. On one side European Member States have begun taking more aggressive actions to prevent foreign companies from offering Internet gambling services to their citizens, while on the other the American government has passed legislation aimed at prohibiting most forms of Internet gambling altogether. Things are complicated further by the fact that several online gambling companies listed shares on public stock exchanges in 2005 and 2006. The listings were hailed as a means to bring more credibility and transparency to the companies, but ironically those that listed now face problems that their private rivals may be able to sidestep-- if they dare. "There are personal risks and there are corporate concerns, and you have to be aware of how those color decisions," said Schneider. In the last two weeks several of the publicly-traded firms such as PartyGaming and 888 responded to the American prohibition by shutting down their operations to American consumers. Most of the private firms on the other hand are taking a wait-and-see approach to the American prohibition and may be hoping it will prove unenforceable. Although expansion in Europe has been a goal in which a lot of online gambling companies have succeeded in 2006, Member State governments would prefer to put an end to the expansion so that their own domestic operators can dominate the market.

Following Schneider on the program was Norbert Teufelberger, one of the co-CEO's of European betting giant bwin.com who was arrested in France last month on charges related to offering betting to French citizens without a proper license.

Tuefelberger echoed EiG's underlying theme of "coming together" by revealing that his company was working with others to formulate a two-year lobbying and public relations campaign. "We will bring information to the decision-makers," he stated.

Schneider noted in her remarks that a number of regulators from EU governments and representatives from state-run companies are attendance. No American regulators are in attendance.

When asked later that evening about her impression of what was going on at the conference Schneider replied: "There is a lot of discussion among the delegates about what sort of changes the may need to take place among their companies and how they're going to handle that sort of thing."

Thursday, October 12, 2006

Lobbying scandal revived drive against online gambling

 

When Congressman Bob Goodlatte introduced his anti-gaming legislation in February, he sent a letter to his Republican colleagues in the House of Representatives with a stark message: This is the bill Jack Abramoff does not want you to sign. Mr Goodlatte's invocation of Mr Abramoff, the once powerful Republican lobbyist who was engulfed at the time in a wide-ranging lobbying scandal and who has since pled guilty to corruption charges, re-invigorated the criticisms of online gambling, says one Washington lobbyist. and nothing was going on until Jack pled out and admitted to things in respect to 2000," the lobbyist says, referring to Mr Abramoff's successful lobbying campaign against an earlier version of Mr Goodlatte's bill on behalf of eLottery, a client. Ultimately, lawmakers who wanted to prove their independence from Mr Abramoff's biggest cause in Washington, gambling, paved the way for the passage of the Unlawful Enforcement Gambling Act. But other forces allowed the bill, which had been passed in the House but which was not expected to gain traction in the Senate, to be attached to an unrelated port security bill and passed hours before lawmakers left Washington to campaign ahead of November's mid-term elections. At the centre of those efforts was Senate majority leader Bill Frist, who had sought to attach the bill to defence legislation only to be rebuffed by Senator John Warner, chairman of the armed services committee. Lobbyists who followed the progress of the bill say Dr Frist wanted to attach the bill to legislation guaranteed to pass for a number of reasons, including the fact its passage would sit well with conservative voters ahead of his expected run for president in 2008. Dr Frist may have pushed for the bill, observers say, in the hope it would generate support from fellow lawmaker Jim Leach, an Iowa Republican and critic of online gambling, whose support could be crucial for the Tennessee Republican's presidential bid in the important Iowa primary.

Leading the corporate lobbying effort in support of the bill - and in opposition to the efforts of UK companies such as SportingBet and Partygaming - was the National Football League, which said it wanted to crack down on sports betting because it hurts the integrity and perception of football in America. Public records show the NFL has spent more than $3m on lobbying since 1998. Last year, it paid one Washington company, Covington & Burling, $700,000 to lobby on gambling and other issues. Two of its lobbyists, Martin Gold and Bill Wichterman, are former senior aides to Dr Frist.

While lobbyists hired by Sportingbet and Partygaming believed passage of the bill was a long shot, the US Chamber of Commerce, another powerful lobbying group, argued passage of the legislation would create a regulatory burden on financial institutions that will now be charged with scrutinising transactions to see if they are gambling-related.

But the pleading of the US Chamber was ignored. One day before Saturday's vote on the legislation, two lobbyists who followed the bill alleged the last-minute intervention of the White House, which encouraged Republican senators to support the legislation, gave the bill the momentum it needed to be attached to the port security bill and passed by the Senate.

Both lobbyists contend the White House sought passage of the bill following the release of a bipartisan congressional report that documented contacts between the White House and Mr Abramoff and his partners, including contacts between the lobbyist and Karl Rove, chief political strategist for George W.Bush,president.

"What put it over the top is when the White House, in response to the Abramoff story, said we need this in the ports bill," one of the lobbyist says.

DID THE WHITE HOUSE INTERVENE IN ONLINE GAMBLING BILL?

 

If a story appearing today in the Financial Times is accurate, the presidential signing into law of the Unlawful Internet Gambling Enforcement Act is likely to be a slam-dunk. The respected publication carried a story quoting unidentified lobbyists who summarised the events leading up to the presentation of the Goodlatte Bill, including the exploitation of the Jack Abramoff lobbying scandal as a spur to get politicians to sign up for the anti-online gambling measure. It covers the House approval of the combined Goodlatte and Leach bills and how this stalled in the Senate before being picked up and pushed by Senators Kyl and Frist, ultimately leading to the attachment of the compromise measure to the must-pass port security bill and the early morning approval of both. The article also carries the startling news that the attachment to the port security bill was encouraged by the White House, according to two lobbyists who told the Financial Times that this was an important element in the whole process. The FT reports: "One day before Saturday's vote on the legislation, two lobbyists who followed the bill alleged the last-minute intervention of the White House, which encouraged Republican senators to support the legislation, gave the bill the momentum it needed to be attached to the port security bill and passed by the Senate. "Both lobbyists contend the White House sought passage of the bill following the release of a bipartisan congressional report that documented contacts between the White House and Mr Abramoff and his partners, including contacts between the lobbyist and Karl Rove, chief political strategist for George W. Bush, president."

US gambling law claims two more London scalps

 

The fallout from new laws restricting internet gaming in the US cast a pall further across the City yesterday when two more London-listed companies suspended operations there. Fairground Gaming and Leisure & Gaming, which run casino and poker websites, joined the mounting casualties from Congress's shock decision this month to ban banks and credit card companies from processing payments from internet gamblers in US states where it is illegal. FireOne, whose shares change hands on the Alternative Investment Market, said yesterday it too would no longer process US credit card payments relating to internet gaming as soon as the law comes into force. That is expected to happen in a matter of weeks, once President George Bush signs the Unlawful Internet Gambling Enforcement Act. Meanwhile, one of the City's leading law firms reportedly withdrew from advising on the sector. Slaughter and May, legal counsel to more of Britain biggest companies than any other firm, was unavailable to comment on suggestions it would no longer advise internet gaming companies after the US clampdown. Many of the online gaming groups derive the lion's share of revenues from across the Atlantic. The US ban has, therefore, hit the industry hard. Shares were hammered last week, with more than £3bn wiped off their valuation on the London market in a day. Yesterday, Fairground fell 8.5p to 14.5p, Leisure & Gaming crept 0.75p higher to 8.75p, and Fire- One lost 17.5p to 50p. Trading in the shares of World Gaming, another internet gambling company, was suspended on Monday after it warned that in light of the US legislation, which in effect turns off 95 per cent of revenues, it may be driven out of business.

Less than a week after admitting it may be in breach of loan conditions, World Gaming asked for trading in its shares to be suspended "due to a fundamental uncertainty over its ability to continue trading".

Unlike World Gaming, Fairground insisted it was "confident" its remaining operations, which account for just 30 per cent of sales, were profitable, and stressed that it had sufficient cash to go forward.

"Urgent" cost cuts are imminent and a tie-up with another company may be on the cards. Fairground is reviewing its overall strategy. "We are proceeding with appropriate caution in evaluating opportunities for further geographical diversification," the company said.

Leisure & Gaming is mulling whether to suspend, close or sell its US operations and has received approaches. Talks continue, while it concentrates on its UK and Italian businesses. Job will go at FireOne, which is restructuring and paring costs.

Gambling Law in US Hits Home

 

BRITISH firms continued to feel the strain of a crackdown on internet gambling in the United States as two more firms abandoned operations across the Atlantic. London-based casino Leisure & Gaming said it was "no longer appropriate" for the company to accept US customers after Congress approved the Unlawful Internet Gambling Enforcement Act. It also revealed it was considering selling its US operations after receiving "a number of approaches", sending its shares up nearly 10% yesterday. Shares fell 86% last week in the aftermath of the new legislation. There was a less positive response to FireOne's decision to pull out of the US and its shares dived by more than a quarter. The company, which provides payment services to the online gaming sector, has lost 72% of its value since Monday last week. The Bill passed by Congress specifically outlaws banks and credit cards processing payments to internet casinos. FireOne said: "The Act will have a significant negative impact on the business." It said it expected President George Bush to sign the Bill shortly.

State Law and the Unlawful Online Gambling Act

 

Prior to analyzing how the new federal law interacts with state gaming law, it is necessary to have a basic understanding about the two constitutions by which we are all bound. Every state has a constitution that is a body of laws that the citizens of that state must follow. There is also a federal Constitution that all citizens of the United States must follow. (The federal Constitution and the US Constitution mean the same thing.) We are each subject to both the laws of our state and federal laws. The Tenth Amendment to the United States Constitution states that: "The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people." The Tenth Amendment was intended to confirm the understanding of the people at the time the Constitution was adopted that powers not granted to the United States were reserved to the states. Historically, the states have successfully regulated gambling within their borders, as that is seen to be a power reserved to the state. Almost every state has some form of legal gambling, be it a casino, lottery, video, lottery terminal, horse wagering, bingo, or other forms of gambling. As to the issue of which law applies (state or federal), the US Supremacy Clause states that the "Constitution and the laws of the United States...shall be the supreme law of the land...anything in the constitutions or laws of any State to the contrary notwithstanding." This means of course, that any federal law - even a regulation of a federal agency - trumps any conflicting state law. Finally, the Commerce Clause makes Congress the guardian of interstate commerce. Article I, Section 8, Clause 3 of the US Constitution states in relevant part: "The Congress shall have power to... regulate commerce with foreign nations, and among the several states .."

Every federal law must have a constitutional basis in order to be valid, and the Commerce Clause has been widely used as a constitutional base for federal legislation of every type. It has been predicted that the Commerce Clause will ultimately regulate many activities on the World Wide Web.

Those three constitutional mandates taken together basically mean that any federal law must be constitutionally based. If it is, and if there is a federal law on a subject, it preempts state law. The federal government is to regulate commerce, but powers not granted to the federal government are "reserved to the states. And laws relating to the health and welfare of its citizens usually fall within the purview of state law."

So what powers does the federal government have regarding online gaming law? Traditionally, the federal government has stayed out of the gambling arena and left its regulation to the states. However, when gambling crosses into different states or countries, the federal government has a legitimate interest and therefore gets involved.

The Unlawful Internet Gambling Enforcement Act

As I explained in a prior article, section 5361(b) of the Unlawful Internet Gambling Enforcement Act specifically states that nothing in this new law shall be construed as "altering, limiting, or expanding any Federal or State law. prohibiting, permitting or regulating gambling within the US."

In other words, the language of the statute confirms that this new law does not change existing gaming law. The federal government has merely enacted a law that attempts to enforce state or federal laws already in existence.

The operative section of this new legislation states that "No person engaged in the business of betting or wagering may knowingly accept." electronic transfers, credit cards, etc. where a person is engaged in "unlawful Internet gambling." This new law applies, if and only if, the gambling is already illegal under current state or federal law.

Whereas my previous article focused on current federal law, this one addresses applicable state laws.

State Gaming Law

From the letters I have received, I am concerned that some readers do not know the gaming laws of their states.

A few states have passed statutes making it a misdemeanor to participate in Internet gambling. For example, Illinois passed legislation that criminalized the activity of the individual bettor, making it a Class A misdemeanor (720 ILCS 5/28-1 (2001)(a)(c)).

This legislation was ridiculed by deputy district attorneys, who would be the enforcers of this law, causing The Chicago Sun Times to conclude that the legislation "has bark and no bite" and that "without cyber cops monitoring households and their computers, the law will be difficult to enforce."

To my knowledge, there has not been one prosecution in those states that make it unlawful to play online poker in their state.

Problems with Enforcement

In a nutshell, the reason it is almost impossible to enforce a law prohibiting a gambler from playing poker online is because prosecutors are hard-pressed to come up with admissible evidence.

A criminal case must be pleaded and proved with specificity. What this means is that a crime must be alleged to have occurred on a specific date in a specific place, in order that the accused can lodge a defense. How could a state prove that one was playing poker on a certain date and time in its jurisdiction?

First, a county prosecutor would have to have sufficient information to file a lawsuit against an individual and then prove that the crime occurred within that county. With the advent of the Internet and laptop computers, it is almost impossible to prove that someone was playing poker in a certain jurisdiction. Many gamblers travel around the country to different venues. The government would have an extraordinarily difficult time proving from where a poker site was accessed. If a prosecutor cannot prove jurisdiction, the case gets thrown out of court at its inception.

Next, even if it could be proven that a certain computer was used, the identity of the user must be proven beyond a reasonable doubt. To prove the user's identity, the prosecutor would have to provide first-hand knowledge regarding who was at the computer playing poker. Also, subpoena power is not available overseas, meaning that an offshore online site would not turn over its records regarding who was playing and when.

The state cannot come into one's home without "probable cause" to believe a crime was being committed, which would entitle it to have a search warrant signed by a judge. The search warrant must be based upon probable cause, which is defined as objective facts that raise in the mind of a reasonable person the probability that a crime is being committed. It would be nearly impossible to demonstrate probable cause to believe a crime was being committed.

Finally, considering that some people play one- and two-penny poker, it would be embarrassing for a prosecutor's office to dedicate its scarce resources to catch a penny-ante online gambler, while murderers and rapists are on the loose.

The State of Washington Makes Online Gambling a Felony

It is important for our readers to understand that Washington did make it a felony to play online poker in their state. Although no entity appears to be enforcing this law, it does exist.

On March 28, 2006, the state of Washington passed a law prohibiting Internet gambling, which went into effect on June 7, 2006. The Washington bill upgrades online gambling from a misdemeanor to a class C felony.

Gambling Commission Director Rick Day and State Senator Margarita Prentice, who sponsored the legislation, have publicly stated that the aim of the law is not directed toward the online gambler. Day said that jailing small-time online gamblers is "not the focus of our work." Day said his priorities are to go after national and international promoters or operators based in Washington state. Evidently he thinks gamblers are like children, needing protection. He has publicly stated that he wants to protect gamblers from sites that won't pay, colluders, and money launderers.

In my opinion, this offensive, overbearing law is unconstitutional and needs to be challenged in a Washington court. Besides the fact that it attempts to legislate morality, the law is inconsistent with other Washington laws that allow gambling in brick-and-mortar casinos. The prohibition does not include online horse-race wagering, so that certain forms of online gambling are still legal where the state makes money. These issues will have to be hammered out in court. I eagerly await the first lawsuit and hope to be personally involved.

Furthermore, the sentencing scheme is ridiculous. Playing poker online in Washington has been deemed a class C felony, punishable by an amount not to exceed $10,000 and/or confinement in a state correctional institution for up to five years.

Other class C felonies in Washington include certain degrees of rape, child molestation, stalking, bestiality, making deadly threats, failure to register as a sex offender, theft, assault on a child, custodial sexual misconduct, sex and labor trafficking, and the list goes on.

This means that under Washington law, a penny-ante poker player could ostensibly receive the same sentence as one involved in certain types of child molestation. This violates the Eighth Amendment's proscription against cruel and unusual punishment. Allow me to explain.

In 1977, there was a law in Georgia that made rape punishable by death. In the famous case of Coker v. Georgia, the US Supreme Court ruled that a sentence of death for the crime of rape of an adult woman was grossly disproportionate and excessive punishment forbidden by the Eighth Amendment to the US Constitution. A sentence cannot be disproportionate to the crime. This issue will also have to be tested in court.

Regardless of what we all think about the Washington law, it currently exists. The next question is how it relates to the Unlawful Internet Gambling Enforcement Act.

How Does the Federal Enforcement Act Interact with State Law?

Only in the case where a state makes it a crime to play poker online, the new statute (if signed into law, of course) also makes it a crime for the "person engaged in the business of betting or wagering" to "knowingly accept" funds. As I have stated before, this rule does not apply to the online gambler, but rather, to the online sites.

In other words, where Washington makes it a crime to play poker online, the federal statute makes the operator of a site liable for accepting payment. However, since all gaming sites are offshore and not subject to our laws, this is a law with no teeth.

Recognizing that the US has no jurisdiction offshore, the bill ends in section 803 by saying that the US government should "encourage cooperation by foreign governments." Dream on.

People in the gaming world already know that a place like the Isle of Man does not feel sympathy with US laws and refuses to enforce a violation of a US law where no similar law exists there. As a matter of fact, the Isle of Man was one of the first jurisdictions in the world to introduce legislation specifically designed to benefit gambling and e-gaming firms as well as protect consumers. The last thing they would consider is cooperating with US antigaming laws.

In sum, the 2006 Enforcement Act does make it a felony for an owner or operator of a site to accept money for gambling where it is already illegal (that is, Washington), but since all gaming sites are located outside of the jurisdiction of the United States, this portion of the law is, in all practical terms, unenforceable.

I.G.C. ATTACKS U.S. ONLINE GAMBLING FINANCIAL RESTRICTIONS

 

In a press statement titled "Americans Still Free to Gamble Online" the Interactive Gaming Council, a trade association for Internet gambling operators, pointed to important aspects of the new US legislation this week. The IGC statement paints a background to the law whereby "Literally in the dark of night, without debate and far from public scrutiny, Republican leaders in Congress added an Internet gambling prohibition bill to completely unrelated, but important, legislation on port security. Without even reading the tacked-on provisions, legislators passed the entire measure before adjourning for their election recess." But it is important to note, the statement continues, that individual American players are still free to gamble online. The prohibition bill does not make it a crime for the individual participant. The focus of the bill is on the financial transaction - the transmission of money from the player to the operator of the gambling site. American online gamblers can "...continue to play without fear of federal prosecution. However, some of their favorite sites may no longer accept their wagers, as many of the publicly traded online gambling companies have announced that they would stop taking American bets." "This bill doesn't do anything to protect American consumers who choose to enjoy Internet poker and other games," said Keith Furlong, deputy director of the IGC. "But the immediate effect is to drive the industry further underground. Gambling sites will devise new methods for getting money from / to a market where players have shown a resilient demand for this type of entertainment. "The sad thing is, however, that many of the largest and most responsible companies, some of whom are major public companies listed on the London Stock Exchange, are being forced to stop providing real-money games.

"This will prove to be a classic case of unintended consequences. In the guise of protecting vulnerable Americans - minors who want to gamble and adults who can't control their gambling - Congress has actually heightened the risk to these groups. It has driven away the operators who followed the most socially responsible practices. It has also increased the possibility of online gambling being used for money laundering, because it has outlawed the most easily tracked methods of payment."

"With few exceptions, U.S. states have demonstrated over many years that they can successfully regulate the bricks-and-mortar gambling industry," added Rick Smith, executive director of the IGC. "That industry employs thousands of people and generates millions of dollars in tax revenue. The same principles could have been followed in the Internet gambling industry. With licensing and rigorous regulation of online gambling sites, rather than futile attempts at prohibition, governments can ensure that games are fair, operators are honest and solvent and vulnerable players are protected. And the governments could have reaped millions in taxes."

The IGC comments that the U.S. Congress has demonstrated little interest in objectively researching online gambling before attempting to pass laws against it. "In fact it specifically rejected attempts to include provisions to study the possibility of regulation," the statement claims.

"This was a sneaky election ploy," Furlong said. "It's no coincidence that a ban on Internet gambling is part of the 'family values' platform of the extreme right, which wants to distract voters from real problems, such as the war in Iraq, and at the same time impose its moral agenda on Americans, depriving them of their freedom of choice."

The statement goes on to question the motives of major proponents of the legislation such as Rep. James Leach and Senate Majority Leader Bill Frist of Tennessee, who led the weekend manoeuver to pass the ban, saying ".....these moral crusaders showed their true political colors by exempting Internet wagering on horse races and lotteries from their bill. In many states, people are free to gamble online as much as they want on U.S. horse races and state lotteries. In fact, in a research report in March, an investment bank claimed that the U.S. horseracing industry now generates over 15 percent of its revenue from online wagers.

"What a contrast between the U.S., which after all went through a notoriously unsuccessful attempt to ban alcohol, and Britain, which is methodically preparing to license and regulate online gambling, starting next year," Smith said.

Wednesday, October 11, 2006

More web gambling firms suspend US operations

 

Three more online gaming companies said today they are suspending operations in the US after the Senate passed legislation outlawing gambling on the internet. Fairground Gaming said it would stop taking bets from customers in the US as soon as President Bush signs the Unlawful Internet Gambling Enforcement Act into law. He is expected to do so this week. Fairground, which derives 70% of its revenue from the US, said it was reviewing its strategy in the light of the new legislation and was "attending urgently to appropriate cost-cutting measures" but had "adequate cash reserves going forward".

Cincinnati leaders back gambling proposal

 

Cincinnati and Columbus are on opposite sides when it comes to a ballot initiative that would permit gambling in Ohio. Elected officials and business leaders in Cincinnati said Monday they support a ballot initiative to permit gambling in Ohio, a sharp contrast to the Columbus Chamber and Columbus Partnership's opposition of Issue 3. If voters approve the amendment, it would allow for as many as 3,500 slot machines to be installed at each of Ohio's seven racetracks, including Scioto Downs and Beulah Park in Central Ohio, and two casino-type gaming parlors in Cleveland. A portion of the gambling revenue would be used to fund college tuition grants. The Greater Cincinnati Economic Development Fund, comprising civic and business leaders, came out in support of the proposed amendment to the Ohio Constitution, saying it would provide more funds for college scholarships than the state legislature would be able to spend. "Any money that this generates will put us ahead of the game compared to where we will be without it," State Rep. Bill Seitz, R- Cincinnati. The initiative is also backed by the Ohio Learn and Earn Committee, whose proponents say 30 percent of the gross revenue from gambling revenue would go toward college scholarships. Learn and Earn is forecasting the slot machines would bring in $2.84 billion a year, generating $852.7 million a year for the tuition grants, which could be used at any Ohio college or university. Those opposing the initiative, including the Columbus Partnership, a Central Ohio business coalition of top executives from some of the region's largest companies, and the Columbus Chamber, say amending the state constitution to allow gambling at nine specific sites would ordain those businesses as winners in the economy and is not good public policy.

Net Gambling Lobbyists Lose Big

 

In the high-stakes poker game of politics, online gambling lobbyists lost a monster hand late last month after Congress passed legislation prohibiting financial institutions from making payments to online gambling sites. The long-standing issue came to a head after presidential hopeful Senate Majority Leader Bill Frist, R-Tenn., became the torchbearer for conservative groups lobbying to ban Internet gambling. Despite repeated attempts by gaming groups such as the Poker Players Alliance and the International Interactive Alliance to stymie the debate, Frist's maneuvering proved too difficult to overcome. After unsuccessfully tacking the bill onto the defense authorization measure earlier in the week, Frist and House Speaker Dennis Hastert, R-Ill., were able to persuade the Republican leadership to add the measure to the Port Safety Act. Passed in the wee hours of Sept. 30, before Congress went into recess, the Internet Gaming Prohibition and Enforcement Act prohibits banks and financial institutions from processing payments for online gambling companies. Congress exempted state lotteries, fantasy sports leagues, horse race betting and Indian gaming from the legislation. "The politics of the moment got the bill passed," says Frank Fahrenkopf Jr., head of the American Gaming Association. The AGA, which had long been against regulating online gambling, did an about-face in April, advocating for the first time that Congress look at whether the technology exists to regulate online sites.

"While we were neutral [in the debate], we really thought the better way to go was a study commission," says Fahrenkopf.

The bill, eight years in the making, was a huge victory for social conservative groups and professional sporting leagues. They persuaded lawmakers to ante up and overcome any lingering Abramoff mystique. Former lobbyist Jack Abramoff, who represented eLottery Inc., was credited as one of the largest contributors to the defeat of a similar ban on online gambling in the House in 2001.

In the past five legislative sessions, bills banning online gaming have passed the Senate twice and the House once, just never at the same time. Advocates including Reps. Jim Leach, R-Iowa, and Bob Goodlatte, R-Va., and Sen. Jon Kyl, R-Ariz., have historically tried different legislative stratagems to pass the bill. But this time, Leach got Frist to promise to bring to the floor an online gambling ban while Frist attended a field hearing in July in Iowa, site of the first presidential caucus in 2008.

Currently, it is illegal for online gambling companies to operate in the United States or for U.S. residents to place bets on the Internet, with the exception of parimutuel horse racing, which enjoys an exemption from the law.

Frist's former aide Martin Gold of Covington & Burling led the charge for the National Football League, assisted by National Basketball Association lobbyist Frank Donatelli of McGuireWoods. While they pushed for the overall ban, Gold and Donatelli made the case to lawmakers that fantasy sports leagues should be left untouched.

"It's been 10-plus years that the NFL has been supporting legislation," says Joe Browne, an NFL executive vice president. "We don't believe that gambling of any sort is healthy for our league -- that it goes to the integrity of the NFL and, perhaps just as important, the perception of the integrity of our games."

EU nations face censure over curbs on gambling

 

France, Italy and Austria will this week be formally censured by the European Commission for restrictive laws on gambling, the latest move in the fierce global battle between governments and private sports betting and gambling companies. The intervention will come as a rare glimmer of hope for an industry seriously damaged by a series of regulatory blows, and from the high-profile arrest of senior executives on both sides of the Atlantic. In Europe, gambling operators have long complained of the obstacles they face when trying to enter markets outside their home state - normally a fundamental right for businesses in the EU.

Reed calls on Chavez to reject Indian gambling money

 

San Jose City Councilman and mayoral candidate Chuck Reed Monday called on opponent Vice Mayor Cindy Chavez to refuse $55,000 in campaign donations from Indian gambling interests. Flanked by former Mayor Tom McEnery and Deputy District Attorney David Pandori, Reed said he was "sounding the alarm to warn of a threat to San Jose's quality of life. Gambling money is being used in San Jose politics." Chavez said she had no knowledge of the money. The money was raised by the local Democratic Party. Reed was referring to the Oct. 5 filing by the Santa Clara County United Democratic Campaign which listed a $30,000 donation from the Sycuan Band of the Kumeyaay nation, dated Sept. 30, and a $25,000 donation from the California Nations Indian Gaming Association Sovereignty Protection Fund dated Sept. 29. Reed demanded to know who solicited the money, why and what promises were made to the donors. He said that the donations could be the first step toward locating a casino or other gambling operation in Santa Clara County. Democratic Party Chairman Steve Preminger says the money was not solicited. It was volunteered by the Indian gaming groups to be used to support State Treasurer Phil Angelides, the Democratic Candidate for governor. "None of that money will be used in the Chavez campaign," he said.

But Preminger could not say how the money would be segregated.

The party does not show any funds spent on the Angelides campaign since the Indian gaming funds were received. Earlier, on Aug. 4, the party spent $600 on materials for signs supporting Angelides, who is running against incumbent Republican Arnold Schwarzenegger.

Asked if she was concerned about the use of Indian gambling money on her behalf, she said, "I have nothing to do with this."

More online firms suspend US gambling operations

 

Two online gambling firms have announced that they are suspending their operations in the US ahead of the imminent implementation of new laws restricting internet gaming. In separate statements released this morning, Fairground Gaming and Fireone said that they would immediately cease trading in the US once the unlawful internet gambling enforcement act had been ratified. The legislation, due to be approved by US president George Bush in the near future, makes it illegal for banks and credit card companies to process gaming payments. Online gambling firms, which make a great deal of their profits from the US market, have seen their share prices plummet since the new law was adopted by the US congress. Fairground Gaming said that it would suspend the company's online casino and poker games to its US-based customers following the implementation of the legislation, while Fireone said that only non-US internet gamblers would be able to use its multi-currency credit and debit card and FirePay electronic wallet processing facilities. Both companies said that they were planning to restructure their businesses and cut costs in the wake of the US legislation.

Fireone said it expected the law to have a "significant negative impact" on its business and had "embarked upon a restructuring of its operations and cost base" as a result.

Fairground Gaming said it was "confident" that its non-US operations, which account for 30 per cent of the company's turnover, were profitable, but stressed it attended to "urgently" introduce appropriate cost-cutting measures.

The company, which stressed that it had enough money to continue trading, added that it was "evaluating opportunities for further geographical diversification" in light of the US ban on internet gambling and was reviewing the strategy of consolidation.

The announcement by Fireone and Fairground Gaming follows yesterday's announcement by World Gaming that it has asked the London Stock Exchange to cease trading in its shares due to uncertainty about its future.

Tuesday, October 10, 2006

Government's plan to make UK capital of internet gambling

 

Ministers want to make Britain the world centre of internet gambling, documents released by Whitehall showed today. The records showed that ministers and officials have met internet gambling tycoons and their representatives no less than 26 times over the past two years. The details suggest that the Government is engaged in a campaign of cosying up to online gambling concerns as intense as the effort to attract casino firms to set up large-scale new gaming resorts in Britain. Labour's aim is that 'Britain should become a world leader in the field of online gambling', the papers said. The closeness of ministers to gambling interests has brought the role of Deputy Prime Minister John Prescott in particular under scrutiny. Mr Prescott has been criticised since failing to register hospitality and the gift of a cowboy outfit from Philip Anschutz, the tycoon hoping to open the country's first supercasino in the Millennium Dome. The release of evidence of links between ministers and online gambling interests comes just as the internet gaming firms have run into deep trouble in the United States, where arrests of British internet gambling executives have been followed by a new law which would stop American punters from using their credit cards on line. Among recent meetings attended by ministers are talks between gambling minister Richard Caborn and heads of the Party Gaming and 888.com group in Gibraltar. Mr Caborn flew to the Rock at taxpayers' expense in July. Culture Secretary Tessa Jowell is scheduled to run a gathering of politicians from around the world at Ascot racecourse at the end of the month which will discuss regulation of the internet industry. The papers released under Freedom of Information rules show that the Government's aspirations were set out in a briefing note written for Mr Caborn before a meeting with Mark Davies, managing director of the Betfair firm, last July.

The briefing said: 'It is a government-wide policy, and that includes Her Majesty's Treasury, that Britain should become a world leader in the field of on-line gambling, in order to provide our citizens with the opportunity to gamble in a safe, well-regulated environment.'

The safety of internet gambling sites has been under question in the wake of a number of trials in which internet gamblers have mounted up massive losses.

In August, gaming addict Bryan Benjafield was jailed for stealing £1 million from his bosses to use for internet bets.

Benjafield, a 23-year-old bookkeeper, was losing as much as £17,000 a day on horse racing, football matches and casino games while earning £16,000 a year.

Jailing him for five years, Judge Andrew Langdon said: 'It says something for the power of your addiction to gambling that despite the low rate of return on your mindless betting, you carried on despite the obvious consequences.'

The judge added: 'The ease with which a desperate man addicted to gambling could spend enormous sums is bluntly staggering. Internet or online gambling has made it much easier, regretfully, for enormous sums to be spent unthinkingly.'

Internet betting firms lost more than £4 billion off the value of their share prices last week after the legislation from Congress meant an effective shutdown of US operations. Exile from America - where sports betting has always been viewed with much deeper suspicion than in Britain - would mean the firms must concentrate more strongly on the British market in order to keep profits flowing.

Online firms which rely on payment by credit card must currently operate from offshore. But from next September they will be allowed to operate from British bases under British regulation.

The Government's attempt to lure the firms into Britain has already meant they will face a tax of 15 per cent on gross profits, the same taxation applied to traditional bookmakers, and a rate regarded by bookmakers as extremely generous to the internet firms.

Shadow Culture Secretary Hugo Swire accused ministers of favouring the gambling industry over the interests of the public.

'Making Britain the world capital of on-line gambling is a strange objective,' he said. 'The whole point is to make sure we have regulations to prevent problems with gambling.

'Tessa Jowell and her department have been asleep to the problems of on-line gambling.'

Mr Swire added: 'Yet again Miss Jowell and her officials appear to be working for the benefit of the gambling industry.'

New US crackdown on online gambling

 

The US Congress has passed tough new federal restrictions on online gambling, including measures that prohibit US gamblers from using credit cards, cheques and electronic fund transfers to settle online wagers. The move came just hours after Peter Dicks, former chairman of Sportingbet, the British internet bookmaker, was freed by a New York court, signalling defeat for Louisiana's attempt to enforce its law against online gambling and increasing doubts about the ability of individual US states to prohibit the practice. But thanks to the new legislation, pushed through Congress by Republican senators, relief for the industry proved to be short-lived. "This enforcement provision provided by this bill will go a long way to stop these illegal online operations," said Jon Kyl, Republican senator for Arizona, who led the push for action together with Bill Frist, Senate majority leader and a possible Republican presidential candidate in 2008. "Congress has grappled with this issue for 10 years, and during that time we've watched this shadowy industry explode," Mr Frist said. "For me, as majority leader, the bottom line is simple: internet gamble is illegal." While the measures strengthen the legal armoury against online gambling in the US, it remains far from clear how they will be enforced. Pragmatists argue that any attempt to stamp out online gambling is futile, given the difficulty of preventing individuals placing bets with foreign websites in the privacy of their own homes. Some credit card companies and banks have lobbied for regulation rather than prohibition, fearing that the financial services industry could be held responsible for handling illegal online bets.

The US casino gambling industry, irked at the loss of gambling dollars to foreign internet companies, also favours regulation, allowing it to compete in the market legally.

Almost all online bookmakers are based outside the US, many of them in the UK, where internet betting is legal. In the absence, until recently, of any serious attempt to enforce laws against the industry, the US has grown into the world's largest online gambling market.

The most explicit legal threat posed to the industry until Friday was a patchwork of state laws prohibiting online gambling, such as the one used by Louisiana to pursue Mr Dicks. But the measures agreed by Congress significantly increases the legal deterrent against internet betting in the US by establishing a clear, nationwide law against the practice.

The bill, passed a day before Congress goes into recess for midterm elections, followed years of pressure for action from Christian conservative groups and other gambling foes. The new measures were attached to an unrelated bill aimed at enhancing port security.

Former Arkansas Lawmaker Arrested on Gambling Charge

 

A former state representative has been arrested on a felony charge of operating an illegal gambling house. Sixty-six-year-old Travis Dowd, who owns the Lucky Penny Arcade, was reportedly out of town when the arcade was raided Thursday and a warrant issued for his arrest. Dowd turned himself in Sunday, accompanied by his lawyer. Dowd posted a $20 thousand bond and was allowed to go. The violation is punishable by up to three years in prison. Arcades in Arkansas are legal under the law commonly known as the "Chuck-E-Cheese Law," which allows tokens or coupon pay outs valued at less than five dollars or less. Pay outs in cash are illegal. In 1993, Dowd was tried in federal court and convicted of making false statements to a federal agency. He was sentenced to one-month in jail and five-months house arrest. Prosecutors said Dowd lied to the Small Business Association when he told the agency he had an $85 thousand offer for his Ashdown insulation business after accepting a $103 thousand offer for the same property.

Is online gambling about to go the way of the manual typewriter?

 

It's an election year and already one of the biggest issues that has many voters' attention isn't the scandal of Mark Foley and the congressional page who he instant messaged for a year and a half, but it is a bill in which the government is prepared to crack down on online gambling. But is this bill going to stop and industry that has millionaires out of a few but has continued to send people into bankruptcy faster than some bad real estate get quick rich schemes the answer to a problem that may not be a problem? That depends on which side of the fence are you on. When it comes to online gambling, whether you are talking about online casinos or you are talking about offshore betting houses for sporting events, what must be addressed by Congress is why an industry has allowed certain programming to be it's milk and butter during a weekend. That industry I am talking about is the radio industry and namely sports talk radio stations. On any given Saturday or Sunday morning, hundreds of local sports talk radio stations use them to hock their own shows that are strictly for the gambling public. When you have local and national programming being influenced by these shows, it will be hard for the legislature in Washington, D.C. to try to regulate a free press because that is where you have to start in regulating this industry. But the legislators are not looking at this avenue because they don't think that is the problem. America if you want to stop a problem like online gambling, you have to attack some sources that may not have been on your target radar. As unpleasant and un-American as it may seem, to tackle offshore betting, you have to do more than put into words a bill that regulates your home or business computer; you will have to literally make such programming like sports betting shows that are seen on television or heard on radio stations illegal because they fuel an illegal activity.

It can be a very precarious situation during an election year but that is the avenue the Congress may have to take if they are serious about eradicating online gambling in this country. But for now, this industry will continue to thrive and make money for some and bankrupt others. And sadly that includes probably a few people on Capitol Hill who are frequenters to these sites as well.

Viva Macau! Asia's gambling capital

 

The dice are rolling hot on the tables of what was once a sleepy Portuguese colony. With millions of mainland Chinese high rollers arriving every year, developers in Macau are racing to turn the former enclave into Asia's glittering gambling capital. The stakes are high. At the baccarat table of one casino, a middle-aged Chinese woman shrugs off the loss of £6,000 on a single game, tipping her cigarette ash and restacking her chips. She gets busy again. There is a slight smell of sweat in the air. Macau, the only place in China where casinos are legal, is poised to overtake the Las Vegas strip in gambling revenues thanks to a huge influx of cash from the mainland. "Macau over the next few years is going to develop into something unique," says Ciaran Carruthers, the senior vice president of Galaxy Resort, a Hong Kong casino company. He is shouting to be heard over the sound of a band on the gala opening night of the Grand Waldo Hotel & Casino. The Grand Waldo is a large casino with 168 tables and 334 slot machines, but it also has restaurants, shops, a luxury hotel, spa, nightclubs, a fitness centre, a swimming pool, a children's playground and, inevitably for a casino targeted at the Chinese, karaoke facilities. There is no question where the punters come from. The discerning ear can pick out the distinctive dialects of Fujian, Beijing and Shanghai - this is a playground for mainland Chinese gamblers. It feels as if a casino is being built on every bit of land in Macau, making one fear for the elegant ruins of churches built by 16th-century Portuguese missionaries. Where no land is available, it is taken from the sea. The Grand Waldo is merely the first to open on the Cotai strip, a £13bn neon avenue of casinos, hotels and shops on 200 acres of reclaimed land that connects Taipa and Coloane, two small islands off the southern Chinese peninsula.

Elsewhere on the strip, beneath scores of cranes, armies of hard-hatted workers are putting the finishing touches on the Venetian Macau, a 39-storey replica of the Doge's Palace in Venice, with a huge statue of the archangel Gabriel on top and 3,000 suites inside.

The strip will raise Macau's current tally of 12,000 hotel rooms to 54,000 in 10 years. The backers of the scheme, the single biggest tourist investment anywhere, are betting it will steal the gaming jackpot from Vegas.

Macau generated £3bn in casino-gambling revenues, just slightly behind the Las Vegas strip's turnover of £3.2bn. But where Las Vegas beats Macau hands-down is on non-gaming income. In Vegas, visitors stay a lot longer, spend a lot more but gamble a lot less.

Many of the 19 million visitors lured to Macau's balmy precincts are day-trippers, or gamble their way through their visit, or stay in a massage parlour. Nearly three quarters of all money spent in Macau goes on gambling, leaving just £12 per visitor for other activities. In Las Vegas, gaming makes up just 41 per cent of the spend, with the rest, an average of £128, going on hotels, food, shopping and entertainment. Cotai's promoters hope the strip will solve the conundrum of how to make people stay longer. By injecting Vegas-style glitz, they aim to overcome the reputation for seediness and gang warfare that Macau has developed.

In recent years, corrupt officials have gambled away billions in the casinos of Macau, and Beijing is trying to stop this as part of a broader crackdown on graft. It won't be the first. Chinese authorities have fought a long battle against the national obsession with gambling. During the Song dynasty between 960 and 1279, they even cut off gamblers' hands. Yet today, the Chinese still bet on everything from fighting crickets to the Grand National at Aintree.

Casinos officially account for 80 per cent of economic activity in Macau, though the true proportion is probably higher. It became a centre for gambling during the 442 years that it was run by the Portuguese. Returned to China in 1999, it is now a special administrative region, under a regime similar to China's "one country, two systems" policy for Hong Kong. The law requires, for example, that only people from Macau or those with a special permit may work in the casinos, a boost to local employment.

The king of gambling in Macau is the octogenarian tycoon Stanley Ho, whose company, SJM, opened the Casino Lisboa, a 12-storey, circular tower, on 11 June 1970. With it came the 24-hour gaming experience that marked a revolution in gambling in Asia and earned Mr Ho almost mythical status in the city.

A good 80 per cent of gambling revenues in Macau flow through locally owned casinos, most of them run by Mr Ho. The Lisboa is a labyrinthine casino, still smoky and slightly run-down, and not as full as it used to be, but the punters are sweating and spending money. The Lisboa flies VIPs to its high-roller rooms by helicopter, and people can win or lose three or four million pounds in a day. Legend has it that one punter lost £67m in a single game of baccarat.

Walking the malls and circling the restaurants of the Lisboa are scores of legally tolerated prostitutes, many of whom live in the casino's hotel. Everyone gambles in Macau, even the sex workers. They cast lots to see who gets to patrol the prime public areas and who has to wait for clients in their rooms.

Looming over the old Lisboa is the emerging skeleton of the Grand Lisboa, a 44-storey building shaped like a lotus flower, Mr Ho's answer to the foreign pretenders who have challenged his domination of the market. His monopoly ended in 2002, when the government began offering concessions to outside investors.

Two years later, the Sands Macau opened. Its owners claim it is the world's biggest casino - 740 tables on 230,000 square feet on three floors, with more than 1,250 slot machines.The scene on the high-roller floor of the Sands, with 51 rooms for the big spenders, is very different from the Lisboa. Its main gambling hall is open and spacious, while the Lisboa's rooms are clearly built for the no-frills, hard-core gambler. It is so successful that it paid for itself in its first year.

The men who built Las Vegas are looking to Macau to keep the roulette wheels spinning and the former enclave is turning into a battle ground for two of the gaming industry's legends - Sheldon Adelson of Las Vegas Sands and gambling mogul Steve Wynn, both of whom have recently built huge casinos in Macau and are driving the development of the Cotai strip.

The verbal sparring matches between them are fun. Mr Adelson says Mr Wynn's new development is a non-event, while Mr Wynn compared the Sands Macau to a Wal-Mart store, somewhere no high-roller would ever go. Although rivals, they quietly need each other to do well; if one loses money, so will the other. This is not poker.

Mr Adelson expects to control 60 per cent of Macau's gaming market by 2010, and predicts that gaming revenues will rise to £7.5bn a year in the same period. Revenues from Sands Macau jumped 53 per cent in the second quarter of this year, accounting for two thirds of the firm's total income.

Jets of fire and water from a large fountain, and a recording of Frank Sinatra singing "Luck Be A Lady", announced the arrival of the Wynn Macau, the latest landmark in central Macau when Mr Wynn opened the £640m hotel and gaming complex earlier this month. It's not just the fireworks that are flash; An original Renoir sits behind the reception desk and Chanel, Prada, Christian Dior, Fendi and Louis Vuitton line the shopping arcade of the 24-storey Hotel; statues of camels lope through the swimming pools.

The hotel has 210 gaming tables and 380 slot machines, and a room starts at £200 a night, rising to £1,450 for a suite. "This place will go profitable tomorrow, on its first day. It'll take that long," Mr Wynn said at the launch ceremony, wearing a T-shirt proclaiming: "Knowledge destroys Fear".

Mr Wynn's company has a 50-acre plot on Cotai while Las Vegas Sands Corp is building a complex and luring several five-star hotel operators, such as Four Seasons, Hilton, Marriott, Sheraton and Shangri-La. Also under construction is the City of Dreams, which bills itself as the world's first underwater casino.

"In Macau, the invitation has been rather one-dimensional - just gambling," says Mr Wynn, who, as head of Mirage Resorts, transformed Las Vegas before selling the company and starting from scratch with Wynn Resorts. "Now the invitation is being enriched at a pace not seen in any other destination in the world. The speed of development is dizzying."

Mr Carruthers says that even if the developers succeed in getting people to stay a bit longer away from the tables, gambling will always be central to the former colony's appeal.

"The Cotai strip will be uniquely Macau and while retaining its huge allure as a gaming destination, will become more attractive to people in the region seeking non-gaming facilities as well," says Mr Carruthers.

"However, I still feel even those that come here for the hotels, fine dining, retail, conventions etc, will still find the gaming too huge an attraction to ignore," he says.

China is central to the expansion of Macau and companies such as Galaxy Resort have their sights firmly set on the mainland Chinese market. "How Macau changes and develops will be closely linked to the change and development in China," Mr Carruthers says. "Right now, most of our players are from the middle and lower classes in China, and it is the middle class that will drive growth here. This is true for much of the region and as the middle classes become ever more affluent and have the means to travel, Macau will be an obvious and convenient choice for many of them."

But gaming and tourism experts say Macau also needs to attract punters from across Asia, rather than concentrating on the Chinese market. Already there are signs that Japanese, Koreans, and punters from south-east Asia are coming to have a flutter.

First of many online gambling dismissals begin

 

The first firings in the Israeli online gambling industry have started, as IM Intermedia dismissed half of its 100 workers yesterday. The firm supplies services for online marketing and data mining for online gaming companies in the United States, and its customers include Intercontinental Online. The company confirmed the report. Yesterday's cutbacks are just the first of many expected in the industry after the U.S. Senate approved a bill last week banning the use of credit cards for online gambling. American banks and credit-card companies will no longer be allowed to pass on funds to Internet gambling sites. Initial estimates are that the first companies to feel the pinch will be small- and medium-sized firms that supply services to the gambling sites. It appears those predictions are coming true. Since the law was passed, share prices of Internet gaming companies, including a number of Israeli firms, have plummeted by dozens of percent. Empire Online has lost 25 percent, 888 has dropped 28 percent, PlayTech lost 35 percent, Party Gaming lost 61 percent, and Sportingbet plummetted 62 percent. Billions of dollars in value evaporated overnight in the online gaming industry, and this is just the start as half of the revenues in the $6 billion sector come from American gamblers.

Monday, October 09, 2006

US Anti-Gambling Law Does Not Respect WTO Ruling

 

If the law that is planned to be signed by United States President, George W. Bush, on Friday is actually signed and enforced, it would be a direct spitting in the face of the United States to the World Trade Organization. The WTO claims that the exemptions in the US Internet Gambling Prohibition Bill for horse racing and state run lotteries discriminates against foreign internet gambling companies. The case brought to the US by the WTO representing Antigua and Barbuda mean nothing to the US, however, if the United Kingdom and/or the European Union get involved the United States could face some mighty troubles. The EU already expressed interest in the WTO case claiming that the new US legislation confirms that the US is breaking WTO laws against protectionism. "To the extent that the legislation eliminates foreign competition for activities that remain lawful in the U.S., such as online betting on state-licensed horseracing, or state-licensed casino gambling that meets federal guidelines, there's no doubt it raises WTO issues," said Jonathan M. Winer, a Washington attorney. We will see in the coming weeks how the US really feels about violating WTO rulings.

Time for gambling execs to shut the door on the US.

 

A number of gambling industry executives have suggested that they will exploit exemption clauses contained within the Unlawful Internet Gambling Enforcement Act of 2006 - keeping open their principal US facing websites, but retuning them towards skill based games. One has even gone as far as to suggest that his company will seek to offer online poker within state boundaries. The Unlawful Internet Gambling Enforcement Act of 2006 makes unlawful the receipt by a gambling business of proceeds or monies in connection with unlawful internet gambling. It represents the first piece of Federal legislation to explicitly deal with online gambling, and it makes clear the US government's intention to stop the flow of funds from Americans to online gaming operators through criminal sanction. The Act explicity states that; "No provision of this subchapter shall be construed as altering, limiting, or extending any Federal or state law or Tribal-State compact prohibiting , permitting, or regulating gambling within the United States." This means that the Department of Justice's position that online gambling; "contravenes three statutes, the Wire Act, the Travel Act and the Illegal Gambling Businesses Act" stands. It also means that many gambling industry executives still have outstanding arrest warrants issued against them. In its short history the world's largest online poker company PartyGaming had a number of run ins with the US authorities. These should have left the executives of the company in no doubt that said authorities viewed their activities in the US as being unlawful. In April 2004 the company was informed by Discovery Communications that US marshals had seized over $2 million of money it had paid Discovery for television advertisements to promote PartyPoker.com. Court documents at the time revealed that Discovery had been made aware that by broadcasting such advertisements it could be party to an illegal activity.

In its IPO Prospectus, PartyGaming stated that it had received an e-mail in January 2005 purporting to be from the office of the Louisiana Attorney-General, requesting that the company desist from offering its services in the US state. The company said that it had "no knowledge of the legitimacy of the e-mail or its author" and that it would dispute jurisdiction if a legal challenge were to be launched against it.

Kris Wartelle a spokesperson for the office of Louisiana's Attorney General recently told the Financial times that it was possible that the email was indeed legitimate;

"It is possible that our consumer protection division could have sent a cease and desist letter following a request from the police gaming enforcement division."

On the 26 June 2005, the Sunday Times reported that the US Justice Department would consider arresting executives of PartyGaming should they return to the US; "We could arrest and prosecute these people if they come back to the country."

The Times of London recently reported that Louisiana had a total of more than 50 warrants outstanding against executives from internet gambling companies that have clients who live within the states boundaries;

"It is believed that those targeted by the warrants include other Sportingbet directors, including Nigel Payne, the chief executive, and board members of companies including PartyGaming and 888 Holdings."

It is now widely believed that when the Unlawful Internet Gambling Enforcement Act of 2006 is signed into law, all but the most cavalier of online operators will stop accepting bets from US citizens.

The notion that a number of the leading companies, may then decide to hang around in the US, exploiting opt out clauses in the Act, simply beggars belief.

Until the climate changes, the best advice would be to give the US a wide bearth once and for all. To do otherwise would be to antagonise the US authorities, and to further increase the risk of arrest. And that is something that beleagured ordinary investors can live without.

Thousands call gambling helpline for lotto results

 

The 1-800 hotline established to help Ontario's addicted gamblers is being inundated with thousands of calls from people looking for winning lottery numbers, prompting the government to rethink the way it advertises the telephone number. Figures obtained by the Citizen show that the number of "misdirected" phone calls to Ontario's Problem Gambling Helpline has skyrocketed since its inception in 1997, going from zero that year to 13,024 (of 17,808 total) last year. "By far, most of those calls are people looking for winning lottery numbers," said Brad Davey, executive director of ConnexOntario, the non-profit government agency that runs the helpline. "Or sometimes it's hours of casinos or things like that. It's usually related to gambling, but (the callers are) on the 'I'm gambling' side rather than the 'I think I have a problem with gambling.' Those are the misdirected ones." Mr. Davey defended the high number of errant calls, saying the Ontario numbers were lower than in other jurisdictions. "It's a common issue with problem gambling helplines," he said, adding he views the misdirected calls as a "marketing opportunity." "Many times when the person has called in looking for the winning numbers and our operators explain what it is we do, the person then says, 'Well, I am concerned with the number of tickets I'm buying every week,' " he said. Mr. Davey could not say how much it costs to field misdirected calls. The London-based call centre is staffed by the equivalent of eight full-time operators and has an annual budget of $826,200. The unusually high numbers have prompted government officials to reconsider their marketing strategy, acknowledging that the 1-800 number might either be overexposed or underexplained. The number is currently posted on every one of the province's 13,069 slot machines, as well as many lottery tickets, and is listed either on the home screen or the withdrawal receipt of most ATM machines in provincial casino and slot facilities. The provincial government has also launched a series of television, radio and newspaper advertisements publicizing the number.

While the total number of calls to the helpline has fluctuated between about 12,500 and 18,000 over the past five years, the number of callers seeking help has remained constant at about 5,000. Officials say the number of gambling addicts in the province has stabilized over the same period.

University of Lethbridge professor Robert Williams, one of the country's leading authorities on problem gambling, says the high number of errant phone numbers is "a waste of time and resources," but says the program is otherwise effective.

Mr. Williams estimates that between three and five per cent of adults in Ontario have a moderate to severe gambling problem, but they contribute 35 per cent of the province's $6.2 billion gambling revenues.

Regulate gambling or lose the income

 

The world's largest computer facilities for online gaming are located in Canada and are nicknamed MIT. This doesn't stand for the Massachusetts Institute of Technology: It stands for the Mohawk Institute of Technology. That is because this gigantic "server park" -- which drives many of the online gambling sites -- is inside the Mohawk First Nations Reserve, also known as Akwesasne, which straddles the borders of Ontario, Quebec and the United States. "It operates just like the server parks in Costa Rica or Belize," said William Rutsey, president of the Canadian Gaming Association, which represents those gambling enterprises in Canada that are legally licensed. The Americans are cracking down on Internet gambling, but nothing is being done in Canada. This is because gambling is a provincial matter and most governments and their gaming partners may not be aware of the huge growth of the business. Their inaction is combined with governmental fear of enforcing laws on any First Nations Reserve. So the beat goes on at MIT and elsewhere, with many Canadian players involved. Meanwhile, the United States has launched a crackdown and prohibition against online gambling. Stocks of Internet gambling companies around the world tumbled after Congress passed a law banning U.S. banks from financing online bets.

Two British CEOs of Internet gambling sites (both publicly listed) were temporarily arrested when changing planes on U.S. soil. Online gaming is not illegal in Britain and two of the biggest publicly listed gambling companies are on the London Stock Exchange.

Another weapon U.S. prosecutors have used is to attack the media for carrying online gambling ads.

This year, the Sporting News paid US$7.2-million to settle a case by the U.S. feds that claimed the publication promoted illegal gambling by accepting ads. The magazine did not admit or deny liability.

The worldwide online gambling market is estimated at more than US$11-billion annually and is projected to reach US$25-billion by 2010. More than half comes from U.S. gamblers.

In Canada, the online gamblers are breaking the law but no one is getting pursued and, alternatively, there is no move to make it legal.

"Canadian laws are different. Under the Criminal Code of Canada, only provincial governments, or their agents, can conduct or manage gaming. Gambling is owned by governments here, then contracted out to managements," Mr. Rutsey said in a recent interview.

"Our position is that the law should be enforced which is on the books or else governments should look at creating an environment where online gaming can be regulated and taxed."

Right now, slots, race tracks and casinos are allowed by provinces in Canada.

"The Canadian model is for government to regulate, own and outsource gaming operations to the private sector. Gross revenues are $14-billion a year and 50% of this goes to governments, charities or not-for-profits, or $7-billion," he said.

Provincial failure to crack down, or license, Internet gambling operations exposes the public to needless risk.

N.S. leads way with Net Nanny software

 

Nova Scotia is taking on a leadership role that may help stop problem gambling before it starts. The province has helped develop software that prevents children from surfing their way on to gaming websites. As many as 500 families across Nova Scotia will be able to try out the product for free. "It's Internet-blocking software that's specially designed to help parents keep kids off gambling websites," Margaret McGee, director of prevention programming for the Nova Scotia Gaming Corp., said Friday. "It's the first of its kind in the world." Ms. McGee said the corporation developed the program, BetStopper, with the help of a U.S. software company. "The idea came from the fact that there are a lot of Net Nanny softwares out there, but they're not very effective when it comes to gambling because most of them are designed for pornography and chat rooms and that sort of thing," she said. "And with the rising popularity of online gambling, particularly among the youth age group, we wanted to do something that was a demonstrable, tangible thing that showed that our commitment to doing our part to prevent problem gambling is real." In a news release issued Friday, the gaming corporation said BetStopper is considered 94 to 99 per cent effective in blocking both legal and illegal online gambling sites and blocks more than 2,300 casino-style websites from around the world. Similar programs are only 56 to 79 per cent effective.

The new software uses artificial intelligence, a "blacklist" of blocked websites and manual updates to help parents protect children under 19 from online gambling, lottery and sports betting sites, the release said.

The pilot test of BetStopper begins today, the release said. Each family participating in the project will fill out three surveys over six months but will have a full year to try out the software.

"Research is going to look at things such as usability, effectiveness at keeping kids off gambling websites, effectiveness at raising awareness of the issue and motivating parents to talk to their kids about the issue and the risks of gambling," Ms. McGee said.

John Dunsworth, a Halifax actor and self-confessed VLT addict, agreed wholeheartedly that it's important to limit under-aged Internet users from accessing addictive websites.

But he also said it's ironic that the government releasing new software to do that is the same government making a profit from gamblers across Nova Scotia.

"I just think it is wrong for the same people who are benefiting from gambling . . . to be in charge of limiting their own revenue. It's a conflict of interest - they just can't do it effectively," he said Friday after hearing about the new software.

"The casino takes an awful lot of money out of this province. Why don't they limit that?"

Mr. Dunsworth said it bothers him that the province continues to make "profit from people's misery" and that it's the government's responsibility "to protect the weak in so-ciety."

He emphasized that "any limiting of gambling among people who are immature or incapacitated or inveterate or addicted is a good thing. . . . I think it's a real shame that so many kids have addictions to Internet gambling."

But Mr. Dunsworth said he would rather see a full ban on Internet gaming sites in Canada.

"I think anything that will curb that hideous use of the high-tech Internet would be a good idea."

Ms. McGee conceded the government does make money from gambling but said that's why the province has a responsibility "to spend some of that money doing our part to prevent youth gambling."

Legalized Casino Gambling on the Ballot in Ohio

 

This November in Ohio, voters will be asked whether or not to legalize casino gambling and use percentages of the tax revenue from "games of chance" to assist students with college tuition. If approved, the plan would legalize casino gambling at 7 racetracks across Ohio as well as 2 casinos in Cleveland. Very similar to the legislation voted on and passed in Broward County, Florida back in 2004. The gambling revenues earned by legalizing and taxing casino gambling would be divided into several categories. The first 30% of the money made from slots would fund college scholarships for top-notch students from low-income households. The next 15% would go to local economic development, additional racing purses and gambling addiction programs. Plans for the other 55% have not been announced. According to proponents of the new law, the projected $800 million per year in annual scholarship funds would be kept in private personal accounts for each student by the state of Ohio. "The additional scholarships will allow thousands of students each year attend college who would otherwise be flipping burgers or doing manual labor", said Ed Nelson, a Cleveland native and long-time proponent of the new slots proposal. On the flip-side, those opposed to the new bill cite legalized casino gambling as a dangerous way to generate tax revenues for education. They believe the legalization of gambling would create more problems than additional scholarships could resolve. Definitely an interesting issue to watch this year as the November elections are quickly approaching.

Sunday, October 08, 2006

U.S. LEGAL - MORE ONLINE GAMBLING COMPANY DECISIONS

 

With the initial panic over last weekend's rushed US Congress action against online gambling dying down, operational companies are starting to look more objectively at the practical implications of this essentially financial restrictive US proposal. The Unlawful Internet Gambling Prohibition Act contains no provisions that would make it illegal for a person located in the U.S. to place a bet with an online gambling company. All provisions are directed at trying to stop the flow of US money to offshore gambling companies. Jackpot Factory group started the positive ball rolling when it announced earlier in the week that whilst it was monitoring the situation it would be business as usual when it came to US players (see previous Online-Casinos.com/InfoPowa reports) Several other major online casino and poker room groups have now followed suit, and as we went to press the respected Cardplayer.com site had published an excellent and practical review of the entire situation which will go some way to calming the business hysteria that has been so prevalent this week. The Leisure and Gaming group, which includes many top online gambling companies, acknowledged the introduction of the Unlawful Internet Gambling Enforcement Bill, is monitoring the situation closely and is continuing to take legal advice on any impact this may have on its business. In the meantime the group continues to operate its business in the usual course. The important Mansion group said that the full effect of the legislation at this time remains unclear. Mansion continues to closely monitor developments of the proposed amendments to U.S. legislation, and the online gambling group is actively seeking the best legal advice to remain fully informed. "We are committed to ensuring our members are well informed, should any of the proposed regulations have an impact on the conduct of our business and the availability of our products and services," says the announcement, adding that: "We wish to reassure our members that at this time, Mansion continues to trade normally and we remain committed to delivering the quality and standard of service that they have come to expect from us."

The Roxy Palace and Vegas Splendido online casinos told webmasters that the company will be conducting business as usual and will still accept US players at both casinos.

The Board of International All Sports Limited ("IAS") issued a statement saying that the company "....is disappointed that the USA Government is passing laws to circumvent its commitment under the General Agreement of Trade and Services to the World Trade Organisation to allow free international trade in an effort to protect USA gaming companies that operate in the USA."

The Board noted that US horse racing has been exempted from the legislation and as such this aspect would not affect the business of IASbet.com. Turning to subsidiary Canbet, the international brand of IAS that operates out of the United Kingdom the statement said the US proposal is not expected to have any financial effect on the operating profit of the group.

Problem gambling increasing Proximity of gaming means more people partaking: study

 

The rate of problem gambling in Surrey and Langley rose in 2005 after the arrival of casino gaming here. That's among the first-year findings of a multi-year study conducted for the provincial government into the socio-economic impacts of casinos in the Lower Mainland. It's tracing the effects on residents of the spring 2005 opening of Langley Cascades casino and slot machines at Fraser Downs racetrack in Surrey, plus two facilities in Vancouver. Researchers surveyed residents at random as well as casino patrons. They determined the percentage of problem gamblers in Langley climbed from 2.5 per cent in 2004 to 4.9 last year. The rate climbed from 5.6 to six per cent in Surrey, but fell in Langley Township from four per cent to 2.6 in 2005. The firm behind the study, Blue Thorn Research and Analysis Group, concluded the change is not statistically significant. "The venues appear to have produced new gamblers," the report found. "Some people are now gambling at the venues that previously did not gamble. It is possible that some of these new gamblers may develop problems." Researchers interviewed nine counsellors who work with problem gamblers. Obvious impacts were limited because the facilities are new, the counsellors said, adding their clients "were in trouble well before these facilities opened." The report said the counsellors believe the casino in Langley may have led to an increase in the number of mental health clients there, because of the casino's proximity to low-income housing and residents there without ready transportation. The counsellors suggested the addition of gambling sites creates "enormous temptations" for problem gamblers, and convenience and visibility increases the risk of relapse.

Overall, the report concludes that based on the first year's findings the casinos have had a relatively small impact on gambling behaviour.

In 2004, about 76 per cent of Langley City residents surveyed said they never played slot machines. That fell to 60 per cent in 2005 after the casino opened (versus 64 per cent for Langley township.)

About 40 per cent of Langley City residents surveyed said they gambled at the casino, versus 30 per cent of Langley Township residents.

In contrast, 74 per cent of Surrey residents surveyed said they didn't play slot machines in 2005 - up slightly from 73.7 per cent in 2004 prior to the installation of Fraser Downs slots.

Surrey residents who do gamble at slot machines don't automatically go to Fraser Downs. It was fourth on the list of where they play slots, behind Las Vegas/Reno, River Rock in Richmond and Cascades in Langley.

A total of 11 per cent of those surveyed in Surrey said they did gamble at Fraser Downs in 2005 and spent on average $54 per visit.

Langley City residents spent an average $36 per visit, but more - nearly six per cent - said they go every day.

Of combined Vancouver-Surrey-Langley residents surveyed, 20 per cent said they don't gamble.

Sixty-five per cent are rated as non-problem gamblers - classifications based on survey responses - while 10.5 per cent are "low risk", 3.7 per cent are "moderate problem gamblers" and 0.7 per cent are "severe problem gamblers."

The report found there was "no discernible impact" on crime or traffic near the casinos.

Stakes raised for pub operators under new gambling regime

 

Pub owners will be able to raise the pay-out limit on fruit machines, following a concession from the Government. The Department for Culture, Media and Sport (DCMS) has given the go-ahead to increase pay-out limits on fruit machines from £25 to £35, ahead of the Gambling Act next September. DCMS announced the measure in response to lobbying from the main trade bodies in the sector, including Business in Sport and Leisure (BISL) and the British Beer & Pub Association (BBPA). Brigid Simmonds, chief executive of BISL, said: "Working with the major trade associations who have an interest in this area, we convinced ministers of the hardship the industry was experiencing at this low-stake, low-price end of the market." "As a result they have bought forward the changes to stakes and increased the prize for the 'pub' machine to £35," she said. A spokesman for the BBPA welcomed "the modest" change as a step in the right direction. It should help soften the blow of next year's smoking ban in England and Wales for pub operators, which fear fruit machine revenues will be hit hard as smokers go elsewhere. High-street operator JD Wetherspoon, which has pubs in Scotland and sites that have been smoke-free in England and Wales for almost a year, recently reported a fall in gambling revenues at its no-smoking pubs. However, because the changes put fruit machines into a higher tax bracket, operators are unlikely to see benefits from the agreement until they are reclassified in next year's budget and the rate of tax is lowered.

WPT Enterprises, Inc.'s response to the Unlawful Internet Gambling Enforcement Act

 

WPT Enterprises, Inc. the company that helped launch the current global poker boom, issued a statement today encouraging the U.S. poker community to focus on the bright future ahead in the wake of Congressional passage of the "Unlawful Internet Gambling Enforcement Act of 2006." "The Justice Department has been very clear that it believes online gaming to be illegal in the United States and our policies have been always been tailored accordingly," said Adam Pliska, General Counsel of WPTE. "This law clarifies the rules and makes it possible for everyone to move forward on an even footing." It is estimated that over 50 million Americans play poker on a regular basis, with more than 100 million players world-wide. Whereas casinos were closing their poker rooms in 2001 prior to the launch of the World Poker Tour, today casinos across the country are expanding their rooms or opening new showcase poker rooms like the 111 table room at Foxwoods Resort and Casino in Connecticut and the 85 table room at the Borgata in Atlantic City. "It was a wide-spread love of this game and the reinvention of poker as a televised sport that ignited the poker phenomenon," said Steve Lipscomb, CEO and founder of WPTE. "And, that is what will continue to drive the future of the sport. WPTE remains committed to growing the domestic poker market through traditional franchise opportunities like consumer products, sponsorship and events."

WPTE is the producer of the WORLD POKER TOUR® (WPT) TV television series, which airs in the U.S. on the Travel Channel, as well as 150 countries and territories. WPTE also maintains an online gaming site that explicitly excludes U.S. customers from wagering online.

The WORLD POKER TOUR launched the poker phenomenon when it first aired on the Travel Channel on March 30, 2003, and it continues to lead the way in developing poker as a major international sport. WPT schedules, information and merchandise. The highest rated show ever on The Travel Channel, the WPT is now seen in more than 150 countries and territories worldwide. Premiere shows of the WPT air on the Travel Channel March to June and WPTE's newest series, the PROFESSIONAL POKER TOUR airs from July to December every Wednesday, 9 p.m. ET/PT.

About WPTE

WPT Enterprises, Inc. is a company engaged in the creation of internationally branded entertainment and consumer products driven by the development, production, and marketing of televised programming based on gaming themes. WPTE is the creator of the World Poker Tour®, a television show based on a series of high-stakes poker tournaments that airs on the Travel Channel in the United States and more than 150 markets globally. With the WPT in its fifth season, WPTE has launched a second series on the Travel Channel, the Professional Poker Tour(TM), which focuses on the play of poker's leading stars. WPT Enterprises currently licenses its brand to companies in the business of poker equipment and instruction, apparel, publishing, electronic and wireless entertainment, DVD/home entertainment, casino games, and giftware. The company is also engaged in the sale of corporate sponsorships. For show information, tools for improving poker play, and other WPT news.

Namibia: Gambling With Public Funds

 

Recently, the Governor of the Hardap Region was quoted in the media as reading the Riot Act to local and regional authorities in her region. Should one join her or not in her crusade at this juncture? I am not quite sure. Hold on, don't jump to conclusions! Lest you misunderstand me I am not saying our local and regional governance structures somehow and at some point do not need ironing out. Examples of a system gone wayward abound. One need not look further than to the concerns often expressed by the principal officers of the Ministry of Regional and Local Government, Housing and Rural Development at various occasions over governance - rather mis-governance - at these levels. I am just unsure whether reading the Riot Act to them is the remedy or cure that they may need. In fact, how has the Honourable Governor decided that what their malady (ies) is/are that need the remedy of a Riot Act? I am inclined to think that it is easy reading the Riot Act to the converted. Are these officials converted? If there are any converts among them they may only be a handful. And by converts in this context I mean those having had a basic introduction and induction to their working environment for a start, and disciplined in one or the other aspect of their work before being thrown in at the deeper end. In a nutshell, are these officials, both elected and appointed, equipped before being entrusted with the duties they are assigned, some of which are fiduciary in nature. I wouldn't think this is the case all the time and for most of them. In that sense, what these officials need is more than a mere Riot Act. How can they make sense of this Riot Act if in the first place they are not qualified, however rudimentary and broadly defined this qualification may be.

Yes, I am sure our principals would be quick to point out to the formal preliminaries often undertaken to prepare these officials, among them workshops and what-have-you. Obviously one cannot discard them but one doubts their comprehensiveness, especially in view of the fact that most of our officials may be coming from a zero knowledge background at worst. I would argue that such preparations should be thorough if they are to be meaningful in supplanting the scant qualities these officials already possess if they do at all. I think this is the crux of the matter and not so much whether a Riot Act exists and how often and loud it should be trumpeted or not. Have we been choosing the best on offer in any locality or region?

The best in this regard does not only mean scholarly qualifications or truthfulness to whatever political ideals. In fact, in the eyes of most politicians or political parties, party loyalty, a euphemism for cliques, has often been the number one qualification criteria. The interest of the local community has in most cases been subjected to the presumed greater interest of the party and its big shots at head office, remote-manoeuvring the situation through local agents who are at the end of the process are rewarded with positions, as undeserving of these positions some of them may be. This has been the context in which the rolling out of governance to the local and regional levels has been taking place, a fact that political parties would not readily admit to. This is also the environment in which the Riot Act is read and applied.

Out there in our localities and regions, we have people with integrity to occupy these offices and bring to these public offices and our people there the dignity, diligence, dedication, commitment and a sense of duty needed in uplifting these communities. Yet, such people are most of the time bypassed for political yes-men/women with little track records, be it in terms of serving these communities in one aspect or another, or in terms of having instilled the public with the requisite confidence that they can in reverse deposit their trust in them. This is not to ignore well-meaning officials in our local authorities and regions, but they are few and far in between. It seems meritocracy, however you may define it, whether it is in terms of academic qualifications, good standing and service, to mention but a few, hardly applies when it comes to electing and appointing officials at the local and regional levels.

Certainly, elected bodies at these levels must reflect the diverse make-up of their constituent communities if they are to champion and carry these diverse interests. A healthy balance must be struck between elected officials dedicated to service for their communities, politically conscious, not with regard to party politics but local interests and commitment to service to these communities at the one end of the continuum, and good standing, which includes financial stability, at the other end. There is no denying that some of the woes at these levels of governance, particularly as they relate to the misappropriation of public funds by our officials, are induced by financial instability among some of our officials. We are living at the end of a double-edged sword in the sense that between the two strands of those entrusted with public affairs, the appointed and elected officials, none seems to be prepared well for the task and duties at hand due to historical legacy. It is a case of the blind leading the blind. One obvious disqualification for those wishing to assume office, elected or appointed, is failure to pay for services.

If anything, this is an indication of financial instability, and electing or appointing someone like that to public office is not only gambling with public trust but also risking public funds. The temptation is great of him/her helping himself/herself to pubic funds to lessen his/her financial burden or either somehow cooking something up to write off his/her debt. The probability of one or the other misdemeanour is high.

Yes, I agree that Rome was not built in a day but I do not think sporadic piece-meal administration of remedial doses is the answer. With hindsight one would tend to think that the seemingly slow pace at which the rolling out of governance to the localities and regions has been taking place is a blessing in disguise. What use is it to roll out mismanagement? Certainly I do not subscribe to the pre-Apartheid notion when we submitted in the face of Apartheid apologists that we had the right to rule and misrule ourselves.

Let's work at our own pace and according to our own agenda to roll out real democracy and not mismanagement to the regions and local authorities. If the time has not arrived for us to devolve functions to these levels of governance, it has simply not. However, the first thing must come first. This first is to ensure that those to whom these functions are to be entrusted are in a position to carry them out with the minimum hitches, inhibitions, and not tempted by material cravings to help themselves to public resources. In that event the Riot Act would barely be necessary. Ineffectiveness, corruption and lack of skills amongst council officials contributed to the mismanagement of public funds, which resulted in the non-improvement of service delivery, the Minister of Regional, Local Government and Housing then, Joël Kaapanda, stressed in 2003. He did not end there but added: The problems being faced by you are quite complex and will require systematic long-term support. Need I say more? There are simply no quick fixes. Neither is the Riot Act the answer. Merit is the guide. Service is the goal. Upliftment is the mission. Humbleness is a virtue. Craving is a vice.

CasinoBlasters response to the Unlawful Internet Gambling Enforcement Act

 

You are no doubt aware of the recent passing of the Federal Unlawful Gambling Enforcement Act in the US. As a result of this act, Casino Blasters is in the process of consulting legal counsel, but until further notice it is business as usual. All affiliates will receive payment for traffic. For more information, please feel free to contact us at Info@CasinoBlasters.com or call us toll-free at 1-866-225-6909. If anything shall change we will notify you.

Saturday, October 07, 2006

Don't bet on gambling to save schools

 

Illinois Church Action on Alcohol and Addiction Problems calls upon Rod Blagojevich and Judy Baar Topinka to come up with a better plan to fund education that does not rely on people gambling away their money to fund state programs. Green Party candidate Rich Whitney is the only gubernatorial candidate to propose a plan that does not include gambling. The public knows that gambling does not solve the problem of school funding. According to a Copley News statewide poll, 49 percent oppose Gov. Blagojevich's plan of selling or leasing the state lottery to increase funding for schools, and 40 percent oppose state Treasurer Topinka's plan to allow casino gambling in Chicago and more than doubling the number of gambling positions at the nine casinos. Blagojevich opposed the expansion of gambling when he ran for office in 2002 and stopped many gambling expansion proposals in the Legislature during his first term. We call upon him to reject the sale or leasing of the lottery, which will lead to a massive expansion of gambling . As a state representative, Topinka voted against legislation that created casino gambling in Illinois and opposed keno, tribal casinos and other expanded forms of gambling during this campaign for governor. We ask her to reject a massive land-based casino in Chicago and expansion of gambling positions at existing casinos, which will rival the casinos in Las Vegas.

Gambling is an unstable source of revenue. The children and citizens of Illinois deserve a well-thought-out plan in place of a "quick fix" gambling proposal that will result in long-term devastation to individuals and families.

It's time to come up with a better plan that does not include gambling.

What now for online gambling?

 

Internet casinos were fighting for survival today after they were left stunned by law makers in the United States who called 'no more bets' and sent shares crashing this week. Billions of pounds were lost when Congress effectively shut down online gambling operations in the US and deprived casinos such as Party Poker firm PartyGaming and 888 Holdings of their main source of revenue. It also left investors in a state of panic as the subsequent fall in share prices revived memories of the dotcom crash. More than £4bn was wiped off the value of the online gaming sector in one day - more than halving its value - with shares in PartyGaming down by as much as 65%, 888 off 28%, Sportingbet 67% lower and World Gaming losing an astonishing 92%. The sector is now looking for ways to rebuild its reputation and cashflow with investors more nervous than ever on taking a punt on internet casinos. Richard Hunter, of Hargreaves Lansdown stockbrokers, said: 'These companies represent high risk investments and as such will tend to be suitable only for the most hardened of investors - or gamblers perhaps.' For a long time online casinos generated enough cash not to need large bank loans but analysts now fear firms could be forced to look for credit to make up for lost revenues and falling profits. Reports have suggested that PartyGaming will have to negotiate a new loan facility with its banks within 30 days of anti-gaming legislation being approved. And smaller player World Gaming - which generates more than 95% of its revenues from the US - has already entered talks with creditors as it struggles to deal with its debts. A wave of consolidation is now expected in the sector as online casinos look for new gamblers outside the US to revive their fortunes.

Ukbetting became the first to reveal it had received an approach as it admitted that its decision not to operate in the US made it a valuable takeover target. Most of ukbetting's gambling customers are British and it also owns sports news websites such as teamtalk.com and football365.com.

City analysts said 888 was behind the preliminary approach but added that its approach was made before the change in legislation in the US.

888 went on to say that it was not 'currently' in discussions with ukbetting although the company is widely thought to be on the acquisition trail. 'The talks apparently started prior to the change in US regulation,' said Panmure Gordon analyst Charles Hall.

'As far as 888 is concerned the deal makes good strategic sense, given that it would further strengthen the company's UK position.'

But he added: 'This may well have made sense last week but in the new environment the company may feel it has more pressing issues to deal with as well as not wanting to tie up all of its cash resources.'

Both PartyGaming and 888 still generate a lot of cash without their American punters, and PartyGaming has also suggested it is on the look out for acquisitions.

Its share price was given a welcome boost by talk that it is in renewed discussions over a bid for smaller rival Gamesys.

A marketing push away from the US is also expected in the coming months to attract new players to its websites. Both PartyGaming and 888 have courted customers around the world as the threat of anti-gaming legislation in the US loomed.

In the first six months of the year, 888 attracted 370,000 new members to its casino and 380,000 to its poker tables - two-thirds coming from outside the US, which now accounts for just over half its revenues.

PartyGaming has managed to reduce its reliance on the US from 90% to around 75% in the last year. Mr Hunter said: "The obvious next strategic move for these companies would be the traditionally rich gambling mentality in Asia and also the largely untapped European market.

'Even in these localities, depending on the country, there are some difficult legal hoops to get through before the likes of PartyGaming and 888 can begin to replicate some of the revenues they have lost.

'There is also, now more than ever, the likelihood of consolidation within the sector, particularly as many of the smaller companies will find it increasingly difficult to survive.'

Investments in online gaming stocks have been something of a gamble since the sector took off around 18 months ago.

Share prices have lurched violently up and down on a daily basis with the enormous popularity of games such as online poker offset by ongoing concerns over the legality of internet betting in the US.

PartyGaming warned of the threat of changes in regulation in the US when it listed on the stock market in London in June last year. But investors threw their chips onto the table and sent its value soaring to £7bn - more than four times its current value of £1.6bn.

The US authorities raised the stakes over the summer when they arrested two British executives - BetonSports chief executive David Carruthers and Sportingbet chairman Peter Dicks - on American soil.

Despite the warnings, few in the City expected the controversial Unlawful Internet Gambling Enforcement Act to be passed by Congress. However, it was approved after Senate majority leader and 2008 presidential hopeful Bill Frist attached it to the back of a totally unrelated Bill on security at US ports at the last minute.

The successful ambush gave American conservatives and the religious right - who have compared the evils of gambling to those of crack cocaine - an extraordinary coup.

Parliament to consider draft law on gambling business

 

President Vladimir Putin introduced in the parliament Friday a draft law proposing a new set of regulations for the gaming industry. The president proposed the new law after the Interior Ministry launched an apparent sting operation to check the financial, tax and sanitary-epidemiological documents of a variety of gambling establishments in the capital allegedly linked to the Georgian mafia. The wave of closures of Georgian-owned casinos and restaurants in Moscow follows on the heels of a recent spying scandal between Russia and Georgia that saw the arrest of several Russian officers on espionage charges. If the parliament passes the law, which envisions the establishment of two types of gambling zones where gambling will be allowed, the new rules will come into effect January 1, 2009. The first type comprises gambling zones in residential areas. These can be established on territory allocated for urban and rural development. The federal government will issue permits to gambling establishments in these areas in coordination with local authorities. Permits will be issued for five years and will allow each organizer to set up one gambling facility per permit. The second type comprises gambling zones established on parcels of land belonging to federal or municipal authorities not allocated for urban or rural development. These parcels will be leased to the owners of gambling business by the Russian government.

The draft document also outlines the requirements for owners of gambling establishments. The owners must be Russian legal entities that have not been created by the Russian government or local authorities, and whose net assets are not less than 600 million rubles (about $22.4 million).

All gambling businesses that do not meet the requirements proposed in the draft will be shut down after July 1, 2007. Those gambling establishments that meet the requirements will be allowed to operate without special permits until January 1, 2009, when the new law comes into effect.

Congress stupidly outlawed Internet gambling and only terrorists were helped

 

Last Saturday the United States Congress passed a port security bill that carried an amendment banning Internet gambling. This was a huge mistake, not because Internet gambling is a good thing (it was already illegal, in fact), but because the new law is either unenforceable or -- if it can be enforced -- will tear away the last shreds of financial privacy enjoyed by U.S. citizens. The stocks of Internet gambling companies, primarily traded in the UK, went into free-fall as their largest market was effectively taken away. I don't own any of those shares, but I guarantee you they will fully recover, which is part of what makes this situation so pathetically stupid. Ironically, many of the senators who voted for this legislation may not have even known the gambling bill was attached, since it didn't appear in the officially published version of the port bill. But such ignorance is common in Congress, along with a smug confidence that people and institutions can be compelled to comply with laws, no matter how complex and arcane. The amendment was a surprise late addition, pushed by Senate Majority Leader Bill Frist, who has presidential ambitions and reportedly sees this battle against Internet gambling as part of his eventual campaign platform.Only the new law isn't really against Internet gambling at all, since it specifically authorizes intrastate Internet gambling, imposing on the net the artificial constraint of state boundaries. So the law that is supposed to end Internet gambling for good will actually make the practice more common, though evidently out of the hands of foreigners, which in this case includes not just operators from the UK but, if you live in South Carolina as I do, it also includes people from Florida and New York. Let a million local poker hands be dealt. What the new law actually tries to control is the payment of gambling debts through the U.S. banking system, making such practices illegal (except, of course, for intrastate gambling, which probably means your state lottery). Once President Bush signs the bill, your bank and credit card companies will have 270 days to come up with a way to prohibit you from using your own money to pay for gambling debts or -- though far less likely-- to keep you from receiving your gambling profits. The law covers not just credit card payments but also checks and electronic funds transfers.

The most optimistic view of this law from the U.S. banking industry says that controlling payment by checks and electronic transfers is simply impossible and won't be enforced. Only credit card payments are seen by the banks as being practical to limit. But what if Congress doesn't want to take "no" for an answer? What if they are serious? Then the banks will have to put systems in place to examine every payment transaction, no matter how small, and determine if it is gambling related. And because there will inevitably be attempts to get around the law, such examination would go beyond simply identifying the payee to following the money further upstream and downstream and examining it in the total context of your financial activity: Is there a suspicious trend in these payments, which appear to follow every NFL football game, for example?

If you bother to read U.S. currency, the notes say they are good for paying "all debts, public and private," which is why Tony Soprano and the Cali cocaine cartel liked $100 bills so much. Ironically, if the banks are effective in controlling other gambling payment schemes, it may all come back to paper money, which is almost impossible to trace.

Is the end here really worth the effort? The United States already has strict, even draconian, controls over fund transfers that might potentially be used to pay for terrorist activity. Buy a house or open a brokerage account and see how deep an interest the bank takes in where the heck your money is coming from. Now it is proposed that they apply the same diligence to transactions as small as one dollar.

This is ridiculous, not just because it is an unwarranted invasion of privacy, not just because we as consumers will ultimately have to pay for the cost of snitching on ourselves, but because the system of regulation ultimately won't work. With an Internet gambling market approaching $20 billion per year, there is a huge incentive for new enterprises to spring into being specifically to get around this law. Frankly, it ought to be easy.

Just off the top of my head I can think of several possible approaches to subverting this new law. Working within the banking system it might be possible to aggregate payments to make their individual origins less obvious, especially if the aggregation involves some non-gambling money. Remember, these restrictions are being placed on the U.S. banks, not their foreign counterparts, so any bank in the Caymans or on the Isle of Man ought to be able to chug through such aggregated payments without violating any local laws. Another option, since intrastate gambling is authorized, is to make interstate and international gambling debts effectively local by creating thousands of local virtual bookies. All of these are old school ideas that don't even need technology to implement. What if we bring to bear the capabilities of Web 2.0 and create payment mashups by the dozen Ð little PayPals that rise and set like the Sun?

Any random group of 535 nerds is smarter than the 535 members of the U.S. Congress and able to circumvent ANY regulation if there is enough profit incentive to do so. Well the U.S. Congress has just created such an incentive where there was none before. And once these various payment schemes start appearing, what's to say some of them can't be equally used to finance terrorism? Of course they can be used for that purpose. Thanks a lot Senator Frist.

Here's a law that purports to end Internet gambling but will instead enable it, a law that is intended to make certain types of financial transactions harder to do but will ultimately make them easier, a law that says nothing about terrorism but will ultimately abet it, making us all less secure in the process.

There is, to my knowledge, no center for Al-Qaida hacking, nor is terrorism as an industry big enough to attract much third-party software development. But ally the interests of terrorists and Internet gamblers who all want to be paid, that's a $20 billion incentive to corrupt the world financial system -- an incentive that didn't exist before last week.

And what will be our institutional response to these obvious flaws when they come to light? More regulation of course! More scrutiny of financial transactions, not less. But as we've seen in recent years, this greater scrutiny often comes with lax or unequal enforcement, depending on your campaign contributions.

Once again, Congress is proposing to regulate something it ought not to -- something that in any practical sense is probably beyond its power. And the result will be only bad, not good. And Congress's response will probably be even more regulation, not less. And all this to push one man's presidential ambitions?

Nova Scotia testing gambling blocker software

 

The Nova Scotia Gaming Corporation is looking for families to test a new computer program for blocking online gambling sites. The corporation said the new software program, called Betstopper, is supposed to block more than 94 per cent of online gambling sites. The province wants 500 families to test the product in their homes. As many as six per cent of Nova Scotia teens between the ages of 15 and 17 admit to gambling online, the corporation said. Marie Mullally, the gaming corporation's chief executive, said it's not hard for kids to access internet betting sites. "Many of them are unregulated, with no controls, no supervision, no age restriction, no security checks. So, in fact, it's quite easy for kids to get on-line and to gamble, and they have thousands of sites from which they can choose," she said. The gaming corporation said if families involved in the test like the program, it will make the product widely available. The provincial government agency said there are estimated to be more than 2,300 casino-style internet gambling sites in the world. Donna Gallant, an Antigonish mother of three children under the age of 10, got one of the first copies of Betstopper. Gallant said she doesn't want her kids trying on-line gaming when she's not watching. Since she installed the softwear a couple of days ago, it has already blocked several gambling websites.

Frist Writes to Southern Baptists About Internet Gambling

 

"The new law passed because members of the pro-family movement -- including a great many Southern Baptists -- brought the issue to the attention of both Democrats and Republicans," Bill Frist says in a letter to the Southern Baptists, a minority group not representative of all, or even a majority, of citizens of the United States of America. In an attempt to explain his way out of attaching a ridiculous law that prohibits the rights and freedoms of American citizens, in the midnite hours of the last day of Congress sessions, Frist explains that "...rigorous state enforcement means that brick and mortar casinos make a good faith effort to keep minors away from gambling. The same isn't so for online casinos: A website can't tell whether someone is 13 or 35." Frist makes a good point about underage gambling online, if it were true. When 60 minutes did a report on internet gambling and the producer let his son attempt to play online, he was consistently denied by online casinos and poker rooms. The kid had to search through several casinos before finding a shady website where he was allowed to use his parents credit card, which he somehow was in possession of. Frist also showed his ignorance of the subject of online casino regulation in his letter to the Southern Baptists. Online casinos are legal and highly regulated by the UK government and the other countries where they hold valid gaming licenses. And everyone in the industry knows that if an online casino is shady it would be online gaming suicide. Online, a casino running a tight ship is what equals success. The problem Mr. Frist, with all this (and I could go on disecting your article to your minority backers but I won't waste my breath) is that this bill was attached to a Port Authority Bill and was not given a chance to be debated in Congress. The bill was not even presented to anyone in the House until 30 minutes before it went to the floor. You actually attempted several times before the midnite hours of that last night to bring it up to your cronies in the Senate only to have it be knocked down by the more honest politicians who believed it was not nearly as important as National Defense and the Security of our Nation.

Friday, October 06, 2006

Trinidad moves to ban online gambling

 

Trinidad has banned casino slot machines and is moving to outlaw online gambling - practices the socially conservative prime minister accuses of encouraging vice and straining families. Prime Minister Patrick Manning announced the changes in his budget proposal speech to Parliament on Wednesday, less than a week after the U.S. Congress passed legislation cracking down on Internet gambling. "Gaming activities are of great concern to the government," he said. Manning, who said Trinidad also would discontinue its national lottery, commands majority support in Parliament, assuring passage of the online gambling prohibition. The Caribbean nation's premier outlawed slot machines by executive order. No timetable was given to eliminate online gaming and the national lottery in the twin-island country. Oil-rich Trinidad and Tobago relies less on gambling and tourism than other islands. But casinos have started to proliferate, with dozens opening here over the past five years. The United States has been trying to control the multibillion-dollar (-euro) online gambling industry, which has outposts in several Caribbean countries. The legislation passed Saturday prohibits the use of credit cards, checks and electronic fund transfers to settle online wagers. Manning also announced a 15 percent tax increase on all tobacco products. Alcohol produced inside the 15-nation bloc Caribbean Community also will see a 15 percent tax increase, with taxes rising 30 percent on liquor and beer from outside the region, he said.

The spivs gambling with our pensions

 

No word of apology yet from all the City bankers, promoters, PR men, fund managers and regulators who are responsible for the worst scandal to hit the London stock market for years. Shares in online gaming companies have gone through the floor after the U.S. Senate passed a Bill to forbid banks from processing payments to gambling websites. That confirmed what many suspected was already the case: online gambling in America is illegal. The pretence to the contrary by the world's online gambling companies, congregated on the London Stock Exchange, was wrong. Since Monday, investors have lost around £3billion and shares in companies such as PartyGaming, Sportingbet and 888 Holdings, are worth about a third of what they were last Friday. One, World Gaming, is close to being bust, and PartyGaming has cancelled its dividend. So what, you may ask. Who cares if a few City slickers and spivs have lost their shirts? Well, anybody with a pension should be worried. Some of these companies were so large - PartyGaming was once in the FTSE 100 index - as to form a significant part of the pension funds of most people up and down the land. And big providers of unit trusts, like Fidelity, New Star and Merrill Lynch, not to mention thousands of small investors, wandered like suckers into the kind of chicanery which is the City at its worst.

To John Maynard Keynes, this story would be all too familiar. "When the capital development of a country becomes the by-product of the activities of a casino," he wrote, "the job is likely to be ill-done."

It is hard to think of a more obvious example of Casino Capitalism than a bubble in shares of gambling companies, with no real assets, run by secretive characters based offshore.

But for capitalism to work, it should not be a casino, where spivs can easily part fools from their money. Indeed, there are important distinctions between investment and gambling.

If you buy a share in a company, you own something, which gives you certain rights: the right to receive a dividend, to vote at annual meetings, and to participate in any capital uplift.

But a gamble is just a zero sum game. You either win or, more likely, you lose everything.

"Gambling is a serious addiction that undermines the family, dashes dreams, and frays the fabric of society," said Bill Frist, the Senate majority leader.

"Congress has grappled with this issue for ten years and during that time we've watched this shadow industry explode.

"The bottom line is simple: internet gambling is illegal. Although we can't monitor every online gambler or regulate offshore gambling, we can police financial institutions which disregard our laws."

President Bush is expected to sign the Bill in two weeks. I hope he does so. It will be a sign that, unlike most politicians, he is not prepared to look at the internet like a rabbit dazzled by headlights.

Of course there are those who are bound to cry that Bush is simply protecting America's own offline gaming industry from competition.

But he is perfectly entitled to shield U.S. citizens from say, drugs, fraudsters, computer hackers and the like.

If you are reminded of all the opportunities afforded to pornographers by the internet, you would not be wrong. The link between the two is personified by Ruth Parasol.

She is the founder of PartyGaming and was once heavily involved in sex lines in Seattle, while working for a sex entrepreneur.

After the companies were prosecuted, she left and now lives in PartyGaming's hometown of Gibraltar, where she refuses all interviews.

When Miss Parasol and her husband, Russ deLeon, plus two unknown Indian colleagues, turned up in London two years ago, looking to float PartyGaming on the Stock Exchange, the big American investment banks were not interested.

Instead, the company hired Dresdner Kleinwort Wasserstein, a shadow of the old Kleinwort Benson.

The Financial Services Authority could have proclaimed that PartyGaming was an unsuitable company to list in London. But it declined to do so and, at that stage, the four sold shares worth £960million.

The float was waved through, along with countless other dubious proposals, such as the Russian oil giant Rosneft (but that's another story).

For the spivs of the world, London is the stock market of choice.

However, in America, online gambling is illegal. It always has been. It counts as "wire fraud".

Congress has taken the decision that gambling should take place only in real casinos, where it is easier to keep an eye on what is going on and where the day-to-day regulation is the job of the individual states.

In the PartyGaming flotation prospectus, amid numerous risk warnings, the company admitted it had received an email from the attorney general of Louisiana ordering it to cease trading.

But, incredibly, the prospectus said: "PartyGaming has no knowledge of the legitimacy of the email or its author" and "has not responded or sought to determine its legitimacy."

Why on earth did all those professionals, investing our money, buy the shares? Perhaps it was because they took some comfort that two bigwigs, Michael Jackson, chairman of software group Sage, and Sir Brian Larcombe of 3i, had agreed to serve on the board, pocketing a million pounds each for their services.

Say what you like about the founders of PartyGaming, they are not stupid. Over the summer, they sold another big chunk of their holding, making a further £230million. One of them resigned as a director, enabling him to sell more shares.

Insiders scuttling from a company is a classic sign something is wrong, but still the lemons at the big fund management houses held on. Then, in September, two gambling executives were arrested while travelling in America.

U.S. Online Gambling Prohibition Likely Not Enforceable

 

Rushed through Congress in the final hours of the 2005-2006 legislative session, the Unlawful Internet Gambling Enforcement Act seems likely to fail in its ultimate goal of prohibiting Americans from depositing and withdrawing money from offshore-based online gambling companies. To be truly effective, the regulations should mandate that America's financial networks identify every product and service that an American purchases and to whom payment is made. If the purchase is related to online gambling then financial institutions should be required to deny it. The Act's effectiveness will rely heavily upon how well the Fed and Treasury are able to deal with "uncoded" transactions. While credit card transactions always contain a code that identifies what type of product or service is being paid for, paper checks, electronic checks and Automate Clearing House (ACH) transactions do not have such a code that would allow financial institutions to monitor and block them. As late as July the banking industry opposed an earlier form of the legislation due to what the Independent Community Bankers of America (ICBA) called "an impossible compliance burden for 'uncoded' transactions." It appears that hurrying the bill before Congress' adjournment at the end of September was so important to Senate sponsor Jon Kyl (R-Ariz) that he was willing to make concessions that could seriously jeopardize its effectiveness. "We were fortunate to be able to work with the bill's sponsors to minimize the burden that it could have imposed on banks," said Laura Fisher, the American Banking Association's (ABA) head of public relations on issues relating to banking legislation and regulations. "There's a provision in the bill that says the Treasury and the Federal Reserve can exempt certain transactions that they deem impossible to track and code. "The two specific transactions are checks and Automated Clearing House payments."

The Federal Reserve and Treasury will be tasked with devising the regulations that will enforce the Act after it is signed into law. The process will involve an issued statement regarding how the Fed and Treasury propose to enforce the law, followed by a public comment period during which interested parties may submit thoughts and concerns about the matter.

The ICBA and ABA are certain to argue for exemptions for ACH payments as well as paper and electronic checks.

"There are 40 billion checks processed every year, and tracking those would mean having a staffer manually review each check and review whether each payee is an illegal gambling site or a restaurant, and that is pretty much impossible," said Fisher. "That would be a real compliance nightmare for banks."

With regard to credit card transactions, it is already virtually impossible for Americans to use credit and debit cards to pay for online gambling services. Internet gambling presented a number of problems for American credit card companies in the 90s, including chargebacks, lawsuits from gamblers attempting to have their debts ruled unenforceable, and pressure from lawmakers seeking to ban the activity. In 2001 the major credit card companies responded by requiring all gambling-related Internet transactions to be coded in such a way that made using their cards to pay for such services impossible.

The situation created an opportunity for offshore-based alternative online payment processors like Neteller, Firepay and Citadel to fill a consumer demand that the credit card companies had ceased to service.

Today alternative payment processors are the most commonly used method of payment for American online gamblers. Neteller, the largest of the payment processors, boasts close to 3 million customers and received $119 million in revenue in the first half of this year. 86 percent of the company's active customer base resides in North America.

"The great unknown is how far into the Internet commerce stream federal regulators are willing to go," said Professor I. Nelson Rose of Whittier Law School. "The Act requires institutions like the Bank of America and Neteller to identify and block transactions to unlawful gambling sites, whatever they are. But, while the Bank of America will comply, Neteller might not, because it is not subject to U.S. regulations."

Neteller is located in the Irish Sea between the UK and Ireland.

"The courts have the power to issue temporary restraining orders, preliminary and permanent injunctions, to prevent restricted transactions," said Rose. "The only problem with this enormous power is that it is, again, practically useless against payment processors who are entirely overseas."

The Unlawful Internet Gambling Prohibition Act contains no provisions that would make it illegal for a person located in the U.S. to place a bet with an online gambling company. All provisions are directed at trying to stop the flow of money.

It is estimated that Internet gambling will generate $12 billion in revenue in 2006, with more than half of it coming from players based in the United States.

One Internet Gambling Company Approached, Many More to Come

 

The first online gambling company to be approached in a possible buy off was UKBetting, owner of a gambling website - UkBetting.com - and several smaller betting and gambling news portals such as Football365.com, SportingLife.com, TeamTalk.com, and Golf365.com. UKBetting only dropped 6% of its share price off the London stock exchange as it assured holders Monday that it relied on basically no US customers for income. As one of the few gambling companies that only targets the UK, Europe, and other non-US entities, UKBetting is an attractive company to other much larger businesses that were seriously affected by the US ban, such as Party Gaming and 888. UKBetting did not reveal who approached them Thursday and they did not reveal if they were interested in being bought out, however, the fact that they were approached is the first sign of a massive consolidation in the industry. After the news of the possible buyout of UKBetting was revealed, their stock increased 12% within just a few hours.

Online Gambling in the U.S. Could be History

 

Online gambling in the U.S. could soon be history in the wake of a recently passed bill banning the favourite pasttime of many Americans. Causing much uproar in the industry, the United States Congress passed a surprise legislation that would essentially prevent banks and credit card companies from paying out funds to Websites for online gambling. All that's left is for President George W. Bush to sign the papers, which Reuters says most analysts believe is a "certainty". The bill has been incorporated into the Safe Port Act, which, although meant to improve homeland security, includes 30+ pages related to the topic of the prevention of online gambling. The only exceptions offered are in relation to horse racing and state lotteries. A group of poker advocates (including companies and players) expressed their frustrations that the government skipped the public debate process on the topic entirely, and simply "piggy-backed [the bill] onto a bill that was guaranteed to pass." Michael Bolcerek, President of the Poker Players Alliance, also spoke out against the bill, saying that it "reeks of political gamesmanship. Congress has an opportunity to regulate and tax online poker leading to potentially billions of dollars in annual revenue for the federal government and the states," he said. "If the goal is to protect people from the possible dangers of gambling, a prohibition is the worst way of achieving it. All it will do is push poker underground, essentially creating online speakeasies, which will provide no protection for youths, no services for the problem gambler, and leave only the most unscrupulous operators in the game." If the bill is passed, not only will the U.S. be filled with disgruntled players and online gambling site providers, but financial institutions will have to pay closer attention to their transactions, keeping a watchful eye on anything related to online gambling.

Gambling site concerns CHL

 

The Canadian Hockey League has asked its lawyers to look at an off-shore internet gambling website where bets can be placed on major junior hockey games and the Memorial Cup. The CHL includes the Ontario, Western and Quebec major junior leagues that total 59 teams of players aged 16 to 20. The Austrian website bwin.com invites bets on OHL, WHL and QMJHL games and the Memorial Cup, which is troubling to a league in which its players are part of a teenage demographic that spends a lot of time online. "Surprised would be a fair term and disappointed more than anything," CHL commissioner David Branch said Wednesday from Toronto. "We're looking at options. Gambling is an issue we cannot choose to ignore." Betting on sports is a grey and in many ways unregulated area. Office hockey and football pools are common. Anyone over the age of 18 can buy a Pro-Line ticket, or its Sports Select equivalent in Quebec and B.C., at the corner store and put money down on an array of pro sports including the NHL, NFL, Major League Baseball, college sports and NASCAR. But when those playing the sport place bets, it becomes a moral and often legal issue. The long-running controversy over whether Pete Rose gambled on baseball has dogged him for years and kept him out of the Hall of Fame. Italian soccer was rocked this year by a match-fixing scandal. Phoenix Coyotes assistant coach Rick Tocchet was charged last year along with two other men for running an illegal gambling ring.

Teenage hockey players could be approached and influenced by people placing bets or be tempted to place bets themselves.

"I think we'd be naive to think that couldn't happen," Kitchener Rangers head coach and GM Peter DeBoer said. "Circumstances set it up that it's more of a possibility at our level with them being teenagers and not having a lot money than at the pro level where they are mature and they do have money.

"I think we're a lot more susceptible to that than even the pros would be. We're dealing with teenage kids and it would just be ignorance to how bad a position they could be put in if they got onto one of these sites."

An option the CHL will consider is including a seminar on gambling as it does on drugs and alcohol at the start of every season.

"With young people, education is paramount," Branch said, adding that the NHL and Players' Association have resources on the subject that the junior leagues could use to inform players on the dangers of gambling.

DeBoer feels a gambling seminar will be necessary.

"We run seminars honestly from training camp right to the first regular season game: drugs and alcohol and concussions and the new rules and hits from behind and we'll add this," he said. "You are dealing with kids as young as 16. It's important we educate them on all those things."

Thursday, October 05, 2006

Gambling with second-hand smoke

 

The Pennsylvania Senate recognizes the severe health hazards of second-hand smoke and wants to make sure you are fully protected -- unless you're in a casino. That outrageous loophole was part of a gambling-reform bill the Senate passed last week. It prevents the state's 14 new slots venues from being subjected to anti-smoking measures. Gary Tuma, an aide to Democratic State Sen. Vince Fumo, of Philadelphia, noted that other states have shown "considerable drops in revenue" when casinos are made to go smoke-free. "The drops are 20 to 30 percent," Tuma said. "In a city like Pittsburgh, it could be an $80 million, $100 million loss." Why are politicians willing to accept that argument when it applies to casinos, but not for restaurants, bars and private clubs? It's because of the incredible political power that casino operators wield in Pennsylvania these days. Gov. Rendell and the Legislature are counting on millions from casinos to pay for property tax reform. If those dollars don't materialize, neither do the tax benefits. So it doesn't matter if a local restaurant or club loses business because its patrons are banned from smoking. But if those same restrictions keep people away from slot machines, it's a potential state crisis. To their credit, Allegheny County officials blanched at the casino exemption when they learned of its existence last week. County council approved a smoking ban last Tuesday, but many members are reconsidering their votes after the Senate's action. It's been our position all along that anti- smoking laws intrude on a decision that should be left to private businesses and their customers. Politicians who contend that smoking is too unhealthy to be permitted in public lose their credibility when they hand out exemptions as political favors.

Russia to have 4 zones for gambling houses -- lawmaker

 

Russia will set up not more than four zones where gambling houses may run their businesses, speaker of the State Duma lower house of the Russian parliament Boris Gryzlov said Wednesday after a meeting between the house factions' leaders and the Russian president earlier in the day. It is envisioned by amendments to the law on gambling, submitted by the Russian president to the State Duma. These areas will not be residential, Gryzlov said. "It is planned to allocate not more than four limited territories, where gambling business will be possible," the speaker went on to say, "these can be two territories in the European part of Russia, one in Siberia, and one in the Far East. At present, territories free from residents are offered." During the meeting with the lawmakers, Putin expressed the hope for the soonest approval of the amendments to the law on gambling: "I'm hoping Duma lawmakers will finalize the bill and approve it in the nearest future. It should fundamentally change the situation in this sphere." The president noted that "police had zeroed in on a number of entertainment and gambling centers." "It is another reason to address the problem on the whole," the head of the state said. This, as does the alcoholization of the population, causes serious moral and often material damage to us," he said.

Will gambling bill effect Rovers?

 

A new bill making it illegal for banks and credit cards to process gaming payments has been passed by the US Congress, could this effect Blackburn Rovers, with them obviously sponsored by online betting firm bet24. The move is aimed to clamp down on betting, which ultimately leads to serious financial trouble for many people. So should the bill, which has been passed in the United States, be signed into law by American President George W Bush, which is said to be highly likely, a major clampdown on online gambling will be undertaken in the United Sates of America. It would then be illegal for Banks and Credit cards to process online gaming payments from the US. Although I'd heard of the situation I didn't really give it much thought until Vital Blackburn Rovers user Petesta brought the matter fully to my attention by posting this recent comment asking: "What is the situation re the club's new sponsor's bet24 with the problems we have heard about in the USA for sports betting firms? Does this mean they won't have the money to pay rovers in full for the "lucrative" contract?" From what I can make out many British based companies work in a system that goes through the US so this is already having some effect on the online gambling companies in this county, with their share prices dropping. The system would no longer be able to work in such a way, through the US, but unless this law comes into effect in this, and other countries, although the US is major financial force and ripe with gambling it shouldn't cause too much trouble to Blackburn Rovers Football club or bet24?

Congress' online gambling bill cuts Internet firms' stock value

 

Congress approved legislation restricting Internet gambling just before beginning a lengthy recess, prompting a major shakeup in the online wagering world. News of the congressional action sent online gambling companies into a tailspin when stock markets reopened Oct. 2. Shares of PartyGaming, the largest of the Internet firms, decreased 58 percent on the London Stock Exchange, with the company losing about $3.8 billion of its market capitalization in the process, according to The New York Times. Another online company, 888 Holdings, saw its shares fall 26 percent on the same day, The Times reported. Both companies, which are based in Gibraltar, said they would halt transactions with American bettors if Bush, as is expected, signs the bill into law. PartyGaming receives 78 percent of its income from the United States, The Times reported. The Senate and House of Representatives passed the Unlawful Internet Gambling Enforcement Act in the early hours of Sept. 30. Both houses approved the measure as part of a bill to provide protection for America's ports, with the Senate passing it by a voice vote and the House in a 409-2 roll call. The gambling measure requires financial institutions to block credit card and other payments to Internet wagering businesses, which are primarily located overseas. Mitch Garber, PartyGaming chief executive, told The Times, "This development is a significant setback for our company, our shareholders, our players and our industry." The private nature of Internet gambling has result in its widespread use by minors and young adults as well as addiction problems for people of all ages, opponents of the booming illegal enterprise have said. Americans were expected to pay $5.9 billion, about half of the $12 billion wagered worldwide on Internet gambling, to online casinos overseas this year, bill sponsors said. Online gambling sites frequently act as fronts for money laundering, drug trafficking and financing for terrorists, they said.

Richard Land, president of the Southern Baptist Ethics & Religious Liberty Commission, said, "All friends of families should be delighted with this legislation, which will help to curb the growing scourge of Internet gambling, one of the most rapidly expanding addictions in America. Thousands of families have faced financial ruin and bankruptcy because of such Internet gambling addictions.

"This legislation will make it more difficult for these Internet gambling predators to reach into the pockets of America's families and steal the future of children and spouses," he said. "Congress should be applauded for passing this legislation."

Rep. Jim Leach, R.-Iowa, who led the House effort in behalf of the measure, said in a written statement, "If Congress had not acted, gamblers would soon be able to place bets not just from home computers but from their cell phones while they drive home from work or their Blackberries as they wait in line at the movies.

"Internet gambling's characteristics are unique. Never has it been so easy to lose so much money so quickly at such a young age," Leach said. "Everyone loses if this industry continues its remarkable growth trends."

The legislation requires the Treasury Department to publish regulations that would require financial institutions to bar transactions between U.S. bettors and online gambling companies. Violators could be fined or penalized.

The measure, however, does not include a provision passed earlier by the House that would have updated a 1961 law prohibiting betting over telephone wires to cover online gambling.

Internet Gambling: Strange bedfellows

 

Politics has again made for strange bedfellows. This time, the oddly linked pair is port security and Internet gambling. In the last hours before Congress adjourned for the midterm election campaign, the long-awaited port security bill passed both chambers with an anomalous appendage: the Unlawful Internet Gambling Enforcement Act of 2006. If signed by President Bush, the new law would make it a crime for banks, credit card companies and other financial institutions to transfer funds for American gamblers to Internet gambling sites. The impact was almost immediate. Shares of PartyGaming PLC, which operates the world's most popular poker site, PartyPoker.com, fell 58 percent on Monday. Shares of Sportingbet, which owns ParadisePoker.com, fell 64 percent. Overall, according to Cox News Service, the plunge wiped off as much as $7.5 billion in stock value. The legislative maneuver was seen as a way for congressional Republicans to show they'd done something for the religious right in a session in which Congress accomplished so little for almost everyone. "Gambling from your bedroom or living room or dormitory is not a socially useful activity," according to a statement from the office of Rep. Jim Leach, R-Iowa, who pushed the legislation. While accessibility of online gambling has surely lured its share of gullible gamers, just how comfortable should we be with government dictating which activities undertaken in our bedroom, living room or dormitory are "socially useful"?

Mark Foley voted against internet gambling bill

 

Disgraced Florida Congressman Mark Foley was a friend of internet gambling. Gambling911.com has learned he voted against a bill to outlaw online gambling, apparently between internet sex breaks with young Congressional pages. Bluff Magazine, a leading poker monthly, obtained the votes from each Congress person to ban internet gambling in which Foley voted "ney". Could Mark Foley have been an online poker addict on top of an alcoholic and sex depraved underage Congressional page stalker? Foley was one of only a few Republicans to vote against the Republican-driven anti poker prohibition. Late Friday night, Republican Senator Majority Leader Bill Frist slipped a more "watered down" version of an internet gambling measure into a port security bill. Nevada Congresswoman Shelley Berkley condemned the Republican party for sneaking in measure while eliminating provisions that would beef up the security of the nation's rail and mass transit system. That bill passed both the House and Senate during the wee hours of Saturday morning while much of the internet gambling industry was sound asleep and threatened to endanger the votes for Republicans by some 50 million American poker players this coming Election Day. The nearly 100,000 member strong Poker Players Alliance has urged its members not to vote for those Congresspersons who supported the bill, claiming it "reeks of protectionism". The bill carves out niches for horse racing and state lotteries.

Shocking new Internet messages surfaced yesterday, revealing that former Rep. Mark Foley engaged in online sex with a male high-school page - while taking a break from an important vote on the House floor.

The graphic exchange published on ABC News website follows what the two described as earlier "orgasms".

"Ok[sic] I better go vote . . . did you know you would have this effect on me," writes Maf54, identified as Foley, after the two apparently had what they described to each other earlier as orgasms, according to ABC.

"You go vote . . . I don't want to keep you from doing your job," the teen responds.

"Can I have a kiss goodnight," Foley asks.

"*:- KISS," the teen responds.

It is not known at this time whether Mark Foley had opened any internet gambling accounts.

Frist has condemned online gambling as "a serious addiction that undermines the family, dashes dreams, and frays the fabric of society".

His colleague, Mark Foley, apparently did not agree with that sentiment.

Wednesday, October 04, 2006

U.S. bill deals losses to gambling firms

 

The shares of several Canadian-based online gaming companies plunged in mid afternoon trading today after U.S. Congress approved new legislation aimed at restricting most forms of online gaming. As of 2:15 p.m., the shares of leading software company Cryptologic Inc. fell $4.58, or more than 19 per cent, to $20.05 in midafternoon trading, a week after the Toronto company said it will move its head office from Toronto to Dublin. The U.S. legislation, part of a port securities bill passed by the House and Senate on Saturday, prohibits the use of credit cards, cheques and electronic fund transfers for online gaming. Other Canadian companies affected by the new leglislation are Vancouver-based Chartwell Technology Inc., whose shares fell 40 cents or 18 per cent to $1.75; software firm Las Vegas From Home.com, whose shares slipped one-third to 10 cents; and Internet Bingo firm Parlay Entertainment Inc., whose sharese lost 11 cents or 9.5 per cent to $1.05 in over-the-counter trading. The new legislation comes even after years of lobbying by both conservative U.S. politicians and by casino owners in the powerful gaming industry. Casino owners have been worried about the steady growth of the online gambling industry, which may cut into their business. In all, the global online gambling market is expected to generate $23 billion (U.S.) in revenue by 2009, compared with about $8.4 billion in 2004, according to a recent analyst report.

Senate Cracks Down on Net Gambling

 

In a move engineered by Senate Majority Leader Bill Frist (R - Tenn.), the United States Senate on Saturday passed legislation, by a voice vote, that ostensibly would tighten security restrictions on cargo shipments from overseas. But attached to the tail end of this bill was language from an earlier House bill that was going nowhere since last July, which effectively makes it illegal for a bank or other institution to transfer funds to organizations that are involved in so-called "unlawful Internet gambling." Although the measure does not render Internet gambling in the U.S. unlawful, it may as well have, since the new language makes it tremendously more difficult, if not impossible, for banks to process online gambling transactions even when they may be permitted. The bill whose language was grafted onto the SAFE Ports Act, last known as the Unlawful Internet Gambling and Prohibition Act, did spell out certain exceptions for legal online gambling, including between states where gambling was legalized, within individual states or tribal territories, as well as certain other categories such as some horse racing wagers. Earlier, President Bush indicated he would be willing to sign the gambling act into law, were he to receive it on his desk. Instead, the President will find it tucked beneath anti-terrorism and security legislation, which he also has indicated he supports. "No person engaged in the business of betting or wagering," reads the language of the Act, "may knowingly accept, in connection with the participation of another person in unlawful Internet gambling: credit...an electronic funds transfer...any check [or] draft...[or] the proceeds of any other form of financial transaction."

Within a 270-day period, the Federal Reserve Board of Governors has been instructed to work out a plan with financial institutions to implement an electronic regulatory system that will block funds transfers that fall under new federal restrictions.

The very notion that such a system will be created has resulted in the shutdown, within hours, of U.S. branches of Internet gambling operations, a great many of them based in the UK. The Times of London reported today that PartyGaming, Sportingbet, World Gaming, and 888 Holdings are among the British companies that saw giant chunks of their capital value erased from the books: as much as 3 billion pounds ($5.66 billion USD) ceasing to exist, and stock value plummeting as much as 75%.

PartyGaming today issued this statement: "After taking extensive legal advice, the Board of PartyGaming Plc has concluded that the new legislation, if signed into law, will make it practically impossible to provide US residents with access to its real money poker and other real money gaming sites. As a result of this development, the Board of PartyGaming has determined that if the President signs the Act into law, the Company will suspend all real money gaming business with US residents, and such suspension will continue indefinitely, subject to clarification of the interpretation and enforcement of US law and the impact on financial institutions of this and other related legislation." Free games access, and gambling access to non-US customers, will remain unaffected.

In Montreal, Optimal Group, which co-owns an online payment processing service, saw its share value plunge today a full 31%, to $8.08 CAN.

Sen. Frist was quoted over the weekend as saying, "Although we can't monitor every online gambler or regulate offshore gambling, we can police the financial institutions that disregard our laws."

A December 2002 Government Accounting Office report looked into the possibility of whether Internet gambling operations could effectively be used as fronts for money laundering. "Law enforcement officials...cited several characteristics of Internet gambling that they believed made it vulnerable to money laundering," the report reads, "including the volume, speed, and international reach of Internet transactions and the offshore locations of Internet gambling sites. In their view, these characteristics promoted a high level of anonymity and gave rise to complex jurisdictional issues." The report made no recommendations, but certainly raised the specter of possible complicity.

Banks See Protections in Gambling Bill

 

Internet gambling legislation passed late last week by the U.S. Congress, which led to a major sell-off of Britain-based online gambling stocks Monday, remains a concern to the U.S. banking industry but isn't as burdensome as feared. "We got some language in the bill that looks like it protects the financial services industry," said Steve Verdier, director of congressional relations for the Independent Community Bankers of America, which represents almost 5,000 banks in the United States. "It could have been a lot worse." The legislation is designed to prohibit U.S. banks and credit card companies from processing payments for illegal online gambling. Financial services companies and the U.S. Chamber of Commerce had expressed concerns about the compliance burdens that would be imposed, such as tracking and blocking potentially millions of transactions. Under the legislation as passed, "If you are acting as a normal bank, and you're not in some sort of conspiracy with a betting house, then you are not going to be held liable," Verdier said. In addition, the legislation will be guided and enforced by regulations written by the Federal Reserve and the U.S. Treasury Department. "If they find that the banks just don't have the technology to track and block these transactions, then we don't have to," Verdier said. "The Fed and Treasury are not supposed to ask us to do the impossible."

Still, Verdier said, "we will have to see how those regulations get written."

The legislation, attached to an unrelated port security bill, was approved by the U.S. House of Representatives Friday and by the U.S. Senate early Saturday. It is expected to be signed into law by President Bush.

Shares in Britain-based betting companies, such as PartyGaming PLC, 888 Holdings PLC and Sportingbet PLC, plunged Monday. The companies said they would suspend business from the United States if the legislation is enacted.

US ban crashes Internet gambling stocks

 

Shares in online gambling companies listed in London lost more than half their value immediately after a dramatic move by US authorities to ban Internet betting. The market was taken by surprise when the US Congress unexpectedly rushed through the Unlawful Internet Gambling Enforcement Act on Saturday, dealers said. Meanwhile, US casino owner Harrah's Entertainment Inc. said that private-equity firms Apollo Management and Texas Pacific Group made a buyout bid of $15.05 billion, or $81 per share. It would be the biggest deal ever for a casino operator and the fifth-largest leveraged buyout in history. US President George Bush is expected to sign the anti-gambling bill into law this week. It would make it illegal for finance companies to collect credit-card payments from customers using Internet gaming sites. The online gaming business last year generated around 15 billion dollars globally, but faces deep opposition from US lawmakers. "It is extraordinary how many American families have been touched by large losses from Internet gambling," said US Representative Jim Leach, the bill's main sponsor in the House, in a statement after its passage on Saturday. Critics label the ban "the new prohibition," referring to the spectacular failure last century by the US government to ban all alcohol. But whether the ban eventually succeeds or fails is of little current interest to the market. "This has come as a major shock to the industry, where most observers expected the legislation to fail," said Stephen Ford, an analyst for broker firm Collins Stewart. "It also comes as a major shock to the stock market and unsurprisingly stock prices have fallen significantly across all online gaming stocks exposed to the US."

The Harrah's bid, called "aggressive" in a Wall Street Journal report, reflects a 22 percent premium on Harrah's closing stock price Friday. By mid-morning trading Monday, the firm's shares rose 14.27 percent, or $9.48, to $75.91.

Harrah's lists more than $12 billion in equity and more than $10 billion in debt. The company reported $7.1 billion in revenue for 2005.

Shares in online gambling companies fall as U.S. outlaws online wagering

 

Canadian Internet gambling companies were rattled Monday as their stocks took a nosedive in the wake of legislation passed by the U.S. Congress that effectively outlaws online wagering in the United States. Shares in leading software company CryptoLogic Inc. (TSX:CRY) took the biggest hit, retreating more than 19 per cent, or $4.76, to $19.87 on the Toronto Stock Exchange. The legislation, part of a port securities bill passed by the House and Senate on Saturday, prohibits the use of credit cards, cheques and electronic fund transfers for online gaming. CryptoLogic said it had been preparing for that eventuality for five years and effective immediately licensees of WagerLogic, the company's licensing subsidiary, will stop taking wagers from U.S.-based players. Last week, the company announced plans to move its head office from Toronto to Dublin, noting that more than 70 per cent of its licensees' revenue now comes from outside the United States. The company's chief financial officer Stephen Taylor said in a phone interview that the company will remain "strongly committed to Canada." "We have a technical staff of in excess of 200 people based in Toronto and so that operation will be staying," he said.

"There will be an impact on our financial results ... and it will take some time before things shake out and get back to more normalized earning levels," Taylor added.

Other Canadian companies involved in the industry found their stock similarly stricken by the news.

Dynasty Gaming Inc. (TSXV:DNY) dropped three cents to 50 cents Monday as the company, headquartered in Montreal, said it would sell three non-core subsidiaries and focus on rolling out a play-for-points mah-jong game in China.

Vancouver-based Chartwell Technology Inc. (TSX:CWH) was down 35 cents or 16.3 per cent to $1.80, and ESI Entertainment Systems Inc. (TSX:ESY) fell 40 cents, or 15 per cent, to $2.20 on the TSX.

Shares in software firm Las Vegas From Home.com (TSXV:LVH) tumbled four cents or 26 per cent to 11.5 cents on the TSX Venture Exchange, while Internet bingo firm Parlay Entertainment Inc. (TSXV:PEI) lost 44 cents, or 29 per cent, to $1.06.

Parlay is one of the Canadian companies with the most exposure because it generates 60 per cent of its revenues from the United States, said Paradigm Capital Inc. analyst Gabriel Leung.

"We believe there could also be a wave of consolidation given the financial infeasibility for some of these companies to exist as standalone companies in the event of a complete loss of U.S. player activity," Leung added in a financial report.

Spencer Churchill, an analyst for Clarus Securities, said he expects to see an impact on Canadian companies, though he doesn't anticipate any major domicile shifts outside of the country.

"Canadian institutional investors are basically going to take a big pass on this base for some time until we see a major shakeout of the revenues (generated from the U.S.) that are basically going to zero for most of these companies that have U.S.-facing operations."

British online gambling companies, including Sportingbet PLC and PartyGaming PLC, also saw their stocks dive on Monday. PartyGaming, the world's biggest online gambling company, said it would pull out of the U.S. if President George W. Bush signs the legislation into law.

The companies hit hardest by the ruling offer betting markets denominated in U.S. dollars, and usually operate from bases in the Caribbean or Central America. Most of the big British and Irish sites, by contrast, keep their operations in Europe and take deposits only off credit cards denominated in pounds and euros.

Sportingbet, which does more than 60 per cent of its business in the U.S., said the impact of the legislation was unclear. However, the company called off talks about a potential bid for World Gaming.

Shares in PartyGaming plunged 60 per cent to 43 pence (81 cents US), and shares in 888 sank 48 per cent to 76 pence ($1.42). Sportingbet shares dropped 67 per cent to 60 pence ($1.12).

The U.S. decision comes as some countries are focusing on legalization and regulation of online gaming.

In the United Kingdom the government has moved to regulate online gambling sites. Italy backed away from its original position against Internet gambling and now plans to make the websites legal as early as 2007.

Banks await gambling block costs

 

THE costs of policing a new US internet gambling ban for banks and credit card companies will be determined by regulators in the coming months, industry officials said. Government officials are expected to propose a "coding-and-blocking" system that will identify and stop payment to online gambling sites, experts said. Many banks and credit card companies already voluntarily block internet gambling transactions using such a system. The Treasury Department and Federal Reserve Board have nine months to draft regulations after the new law, included in a package of port security measures passed by Congress and expected to be signed into law by President George W. Bush. US banks and credit card companies are optimistic that officials will prepare a workable system. "If the Treasury (department) and Fed can come up with reasonable rules here, it shouldn't be that bad," Oliver Ireland, a lawyer who works with several financial services payment providers, including Visa, said. "The way they built (the new law), it gives us a chance to work with the regulators in a constructive way to come up with a system," Greg Mesack, director of government relations for industry trade group America's Community Bankers said.

British-based gaming companies such as Sportingbet, PartyGaming Plc and 888 Holdings Plc said on Monday they would likely pull out of the US market, their biggest source of revenue, and their stocks plunged.

Some banking industry officials had worried that the new law would make them responsible for blocking payments by check as well as credit card payments - a requirement they had said would be unworkable.

But those concerns were allayed when lawmakers agreed to a provision allowing the Treasury and the Fed to exempt checks from the requirement.

Experts said the system would not be fool-proof, but would bar the vast majority of bettors.

"I suspect some smart enterprising person out there will find a way to (get around) it. But for your average person who wants to get out there and bet on college football, you're not going to do it," one lobbyist said.

Tuesday, October 03, 2006

US bans offshore online gambling

 

THE US Government stunned the online gambling industry over the weekend by passing laws that effectively ban the services from their biggest market. The $US6 billion ($8 billion) industry went into meltdown over the news, with shares in UK-listed PartyGaming, 888 Holdings and SportingBet - which has operations in Australia - plummeting in early London trading overnight. Also in the line of fire is Betcorp, which is listed on the Australian Stock Exchange and, like the UK-listed companies, counts on US customers for most of its business. The US Senate, which was expected to block the legislation, sneaked the bill through early Saturday morning US time, following some last-minute manoeuvring ahead of the Senate break for mid-term elections. The bill outlaws the processing of bets for online gaming companies, effectively preventing US banks and credit card companies from doing business with the operators. It could be signed into law by President Bush as early as this week. The bill excludes US-based online betting on services like horse racing and lotteries and has no impact on American casinos and other gambling operations. The US Government has been in a tussle with the industry for more than a decade, dating back to when foreign operators accepted bets from US citizens over the phone from offshore operations in the Caribbean.

These online sports betting, poker and casino operators have been drawn to the London Stock Exchange, where investors have profited from the explosive growth in US internet wagers, despite their questionable legal status.

That is expected to change. According to UK reports, 888 Holdings, PartyGaming, and SportingBet are expected to halt their US-facing operations.

Shares in PartyGaming slid 64.5p, or 59 per cent, to 43.5p in early London trading. SportingBet shares were down 69 per cent to 58p and 888 Holdings 48 per cent to 76p.

The latest move is not entirely surprising given the hard line already being taken by US authorities. SportingBet's former chairman, Peter Dicks, was arrested last month on a warrant issued by Louisiana State Police, but was released by a New York court recently. Mr Dicks faced being extradited to the state on charges that include gambling by computer, a charge that could land him a year in jail.

In July, the then chief executive of BetonSports, David Carruthers, was arrested in Texas, sending internet gambling stocks plunging.

Mr Carruthers, who has since been sacked by BetonSports, has pleaded not guilty to racketeering and tax evasion.

Australian-listed Betcorp, which generates most of its business from US sports betting, announced last month that it would discontinue its phone service to US customers after, as it said, taking legal advice. The company's stock has more than halved since the troubles began in July, closing at its lowest levels in more than two years yesterday at $1.88.

Betcorp will leave the Australian Stock Exchange this month to concentrate on its British listing. Executives were not available for comment yesterday.

Betcorp was one of the first online companies to be targeted for allegedly contravening US laws.

Gambling Law Crushes CryptoLogic

 

CryptoLogic saw its shares tumble after the maker of Internet gambling software said licensees of WagerLogic, its licensing unit, will no longer take wagers from U.S.-based players. The company cited new legislation expected to be signed Monday by President Bush that outlaws the processing of financial transactions in the U.S. online gambling market. CryptoLogic tried to take an upbeat view, saying it has spent five years shifting its revenue base to European markets and that it's "positioned for long-term profitability and growth." Investors weren't as optimistic, sending shares of CryptoLogic sinking 27% to $16.10 in early trading. "While the new U.S. developments will be a challenge for the whole industry, our company's diversification, strong balance sheet, thriving European customers and potential new business in emerging markets enable us to face the future with confidence," the company said. More than 70% of its licensees' revenue now comes from outside the U.S.

Optimal Sees Unit Hurt by Gambling Law

 

Canadian online payment processing company Optimal Group Inc. said Monday that online gambling legislation passed over the weekend by the U.S. Congress will have a "significant negative impact" on its majority-owned FireOne Group PLC unit. Congress passed the Unlawful Internet Gambling Enforcement Act of 2006 on Saturday, which when enacted, will prohibit gambling businesses from accepting credit cards, checks and electronic fund transfers to settle online wagers. FireOne provides payment processing services for the online gambling industry. Optimal holds a 76 percent stake in the company. Optimal said the its Optimal payments unit is not affected by the act. The company also said it divested its Optimal services group hardware maintenance and services business. The move will not have a material impact on financial statements.

Online Gambling Bill Scares Investors

 

Online gambling companies in the U.K. took a huge hit Monday as investors reacted to news that the U.S. Congress had passed legislation prohibiting the use of credit cards, checks and electronic fund transfers for online gaming. Shares of British gambling companies, including Sportingbet and PartyGaming, were sharply lower Monday. CBS News reporter Vicki Barker in London reported that shares of PartyGaming, the world's largest online gambling site, were down about 60 percent in early Monday trading. PartyGaming says it will pull out of the U.S. market if President Bush signs the legislation into law. 888 Holdings says it is suspending online betting operations in the U.S. as a result, and Sportingbet says it has called off takeover talks with World Gaming. Gambling in any form is illegal in most of the United States, but is an accepted feature of British society. Betting houses, offering wagers on everything from horse racing to whether it will snow on Christmas morning, are as common on the streets of London as pubs. But just because it's big business in Britain, doesn't earn it an honored place in the American market. As soon as the Internet began blurring the lines between U.S. and U.K. commerce, members of the U.S. Congress reacted. Republican Senator Bill Frist is one of the lawmakers who has fought for years to see online gambling banned, maintaining simply that it's illegal. The online betting legislation got through Congress as a tagalong on a port securities bill passed on Saturday, which was largely popular and easily won the necessary votes. President Bush has used his power of veto very sparingly during his leadership, and isn't likely to scrap the port security bill over the gambling legislation, which is also very popular among the conservative base of the Republican party.

Leader: Online gambling on a losing streak

 

The ball landing on zero on the roulette wheel when you've bet your last chip. That dead cert falling at the first, with all your wages in its nosebag. Your pocket aces getting cracked while a pair of twos scoops the pot. Roll up all that bad luck into one big ball of misery and you might get just a tiny inkling of how the execs running online gambling businesses feel today. In a shock move the US has passed the Unlawful Internet Gambling Enforcement Act which aims to crack down on online gambling companies by making it illegal for banks and credit card companies to make payments to online gambling sites. Some poker fans in the US are already talking about a new era of prohibition similar to the 1930s, with the Poker Players Alliance claiming the law will "push poker underground, essentially creating online speakeasies". In some ways the gambling industry shouldn't be surprised - online gambling has been barely tolerated by the US for a number of years, with senate majority leader Bill Frist going so far as to describe it as a "shadow industry". Perhaps the gambling companies felt that sooner or later the US would have to bow to the pressure of the markets. But today that looks like a gamble they may have lost.

Senate whacks Internet gambling companies

 

Two global online gambling companies have halted U.S. operations after the U.S. Senate criminalized such activity, sending their shares plummeting Monday. Lawmakers early Saturday outlawed the processing of bets by U.S. residents by banks and credit companies in a surprise assault on the United States` $6 billion Internet gambling industry. That, in turn, prompted Britain`s 888 Holdings and PartyGaming, the world`s largest Internet gambling concern, to cancel all U.S. business. Shares in global Internet gambling companies tumbled, the Telegraph of London reported Monday. Officers of such companies were livid. 'This is the worst form of protectionism I have ever seen,' one such officer told the Telegraph. 'This will drive Internet gambling underground and consumer protection will go out of the window. The religious groups that lobbied for this may live to regret it.' But the Senate`s leader sounded the opposite of regretful. 'Gambling is a serious addiction that undermines the family, dashes dreams and frays the fabric of society,' said Sen. Bill Frist, R-Tenn. 'The bottom line is simple: Internet gambling is illegal. Although we can`t monitor every online gambler or regulate offshore gambling, we can police the financial institutions that disregard our laws.'

Monday, October 02, 2006

Gambling online faces collapse in US after Senate ban

 

AMERICA's $6 billion (£3.2 billion) internet gambling industry is facing meltdown after the US Senate pushed through a Bill at the weekend outlawing the processing of bets by banks and credit companies. The surprise move, which is expected to spark a massive share sell-off, will prompt London-listed 888 Holdings to announce this morning that it is halting its entire US-facing operation, accounting for half its business. PartyGaming, the world's biggest internet gambling company, said last night that it was "still evaluating the situation", although industry sources believe it will also announce a cessation of its services to American punters. However Sportingbet, which was celebrating on Friday after a New York court released its former chairman, who had been facing gambling charges, will tell investors that it is still digesting the implications of the Bill. Despite the Bill's prescriptive nature, it excludes local online betting on horseracing, fantasy leagues and lotteries. It also has no impact on the hundreds of casinos and gambling emporia that dot America, ranging from the neon palaces of Las Vegas and Atlantic City to the riverboat casinos that ply their trade on the Mississippi. One senior internet gambling executive said last night: "This is the worst form of protectionism I have ever seen. This will drive internet gambling underground and consumer protection will go out of the window. The religious groups that lobbied for this may live to regret it." The Unlawful Internet Gambling Enforcement Bill needs only to be signed by President Bush to become law. Legal sources predict that he will do so in the next two weeks, possibly as early as Wednesday.

The passing of the Bill in the early hours of Saturday surprised the industry. Although it had successfully negotiated Congress, its passage through the Senate looked likely to be blocked through lack of parliamentary time.

However, Bill Frist, the Republican leader in the Senate, got the measure through by attaching it to an unrelated Bill that enhances port security.

"Gambling is a serious addiction that undermines the family, dashes dreams and frays the fabric of society," Dr Frist said. "The bottom line is simple: internet gambling is illegal. Although we can't monitor every online gambler or regulate offshore gambling, we can police the financial institutions that disregard our laws."

The ban may drive some small companies out of business, although big operators such as 888 and PartyGaming will highlight the strong prospects of their non-US business.

However, 888 is expected to warn its shareholders in a Stock Exchange statement this morning that its withdrawal from America will force it to pare back its cost base, resulting in a significant hit against this year's profits.

Toulouse protest again ban on gambling advertising

 

Ligue 1 club Toulouse protested against a French ban on advertising for gambling by wearing the slogan ".com, censored" on their shirts during a game at Olympique Marseille on Sunday. It replaced the name of Toulouse's shirt sponsors, online casino and poker firm 888.com. The French Professional Football League (LFP) on Friday banned its clubs from advertising any form of gambling and online betting. On Saturday, Monaco were forced to remove advertising boards for online betting firm bwin.com before the kickoff of their Ligue 1 match against Le Mans. An LFP official told Monaco the boards around the pitch had to be removed or the match would not start. "Monaco insist on the fact that the decision to remove all advertising for bwin was imposed by the LFP as a condition for the match to start," Monaco said in a statement. The club added that it contested the decision by the LFP and might take legal action to fight it.

The LFP ban came after the two joint chief executives of Austrian online betting firm bwin.com Interactive Entertainment were placed under investigation earlier this month for alleged violation of French gaming laws.

Gambling is a state monopoly in France and online betting firms are banned from seeking clients on French territory.

Bwin are the shirt sponsors of Monaco and have sponsorship deals with several other Ligue 1 clubs, including Le Mans, and other leading European sides.

Congress Passes Bill to Curb Online Gambling

 

It took a backdoor move by the Senate Majority leader, but the bill designed to curb online gambling in the United States has passed. Sen. Bill Frist helped get the Internet gambling ban attached to a defense bill designed to boost security at nation's ports. The bill passed Saturday. The bill calls for banks to work with the federal government to stop transactions between customers in the U.S. and offshore gaming companies. The bill makes it illegal for banks and credit card companies to make transactions with online gambling companies. The bill considers online poker a form of gambling. Recently, online poker sites have worked harder to expand its customer base outside the United States, where about 80-percent of online poker players live. The bill will not target player but does call for prison time for people who run online gaming companies. Banks that don't comply by the bill may also face punishment. A representive from the Independent Community Bankers of America testified to the House that its members will have trouble enforcing the act. The United States is moving in an opposite direction concerning this issue compared to the rest of the world. The United Kingdom recently moved to tax and regulate online gambling sites, and the European Union had made it clear that it considers online gambling a product that should be allowed to be freely traded.

Internet gambling bill will inconvenience gamblers but not prosecute them

 

Nowhere in the language of a bill passed late Friday night to curb internet gambling is there any mention of gamblers being prosecuted for placing bets or playing poker online. In fact, the new bill does not apply to gamblers at all other than to make it a little more difficult to fund online betting and poker accounts. Online gambling transactions will be the focus of a Thursday meeting in London among third party payment processors. "The passage of this legislation has had me working non-stop to get geared up for this battle," said one attorney who represents a major payment processor catering to the online gambling community. "Hopefully the collective legal minds at the meeting in London, as well as counsel for other interested parties, can launch a attack and/or approach to adaptation to the regulations." One Republican politician we spoke to Saturday had this to say: "The bill affects Visa/Mastercard transactions and it is getting impossible to use these cards anyway (for online gambling transactions. "The bill is very 'watered down' in terms of language which gives ISPs plenty of wiggle room if they did not know they were enabling consumers to reach gaming sites. It is not a big deal." The banking sector has already stated it will be close to impossible to monitor electronic checks, fast becoming the payment option of choice for today's web surfers. It's not just online gambling government is trying to regulate over the world wide web.....now they are going after internet dating services. Yikes. Several states are cracking down on the online dating industry, proposing new laws that would, among other things, mandate criminal background checks on all those looking for love on the Internet.

To date, New York is the only state that has a law regulating online dating sites, but six other states have introduced similar legislation mainly in the last year. They are California, Florida, Michigan, Ohio, Virginia and Texas.

Lawmakers seeking to regulate the online dating scene claim that the industry isn't doing enough to police itself, and consequently, is putting vulnerable people at risk of meeting up with predators.

Proposed legislation has varied from state to state, with some states wanting to make criminal background checks mandatory, and others wanting online companies to alert surfers upfront that background checks on potential dates have not been done.

Another bill sneaked its way through Congress recently that would hold online networking site MySpace.com liable for any harm that comes as a result of unmonitored predators utilizing the popular website. Ouch!

Poll Shows Voters Behind Wage Hike, Not Gambling

 

A newspaper poll finds Ohio voters support raising the minimum wage and curbing smoking in public places but not expanding gambling in the state. The Plain Dealer poll shows 73% of respondents support raising the state's minimum wage to $6.85. Issue 2 on the November ballot is a constitutional amendment to raise the wage from its current $5.15. The poll shows respondents aren't behind Issue 3, which would put slot machines at nine locations in Ohio and give some of the proceeds to college scholarships. Both smoking issues are supported by the respondents with the more restrictive ban winning by a greater margin. But if both ballot proposals pass, the less restrictive measure that still allows smoking in most bars will prevail.

U.S. LAW AGAINST ONLINE GAMBLING CONDEMNED

 

"This last minute deal reeks of political gamesmanship" says PPA, but the horseracing business is delighted with its carve out. Most posters deplored what was seen as the "stealth" introduction of the measure by Republican Senator Bill Frist, who pulled political strings to attach a compromise version of a stalled anti-online gambling proposal to an essential port security act, which went through after a late night session of Congress. There was also concern and anger that the wishes of millions of American online players had apparently been brushed aside. "The American people should be outraged that Congress has hi-jacked a vital security bill with a poker prohibition that nearly three fourths of the country opposes," said Michael Bolcerek, president of the Poker Players Alliance, a grassroots advocacy organisation of more than 110,000 poker enthusiasts. "Allowing this bill to become law would run contrary to public opinion and would damage an already fractured relationship between government and the electorate. The millions of Americans who enjoy playing this great game will have the last voice in this debate come Election Day." Bolcerek pointed to research which shows that 74 percent of Americans oppose federal attempts to ban Internet poker. "Congress has an opportunity to regulate and tax online poker leading to potentially billions of dollars in annual revenue for the federal government and the states," said Bolcerek. "If the goal of Congress is to protect people from the possible dangers of gambling, a prohibition is the worst way of achieving it. All it will do is push poker underground, essentially creating online speakeasies, which will provide no protection for youths, no services for the problem gambler and leave only the most unscrupulous operators in the game"

Most players and industry observers were taking a "wait-and-see" position before assessing the true impact of the legislation, which mainly seeks to hamper and disrupt the financial channels through which US players fund their online gambling entertainment at offshore venues not subject to US law.

The bill falls short of clarifying whether the 1961 Wire Act applies to casino and poker gambling online because it was dropped from Frist's compromise attachment. This is being viewed as a small victory for the online gambling community as it is thought unlikely such revisions will be added in the future.

In fact, Frist as the main architect of the stealth ban admitted: "Although we can't monitor every online gambler or regulate offshore gambling, we can police the financial institutions that disregard our laws." There are strong reservations within the US banking sector as to whether this can be done effectively, however.

The horseracing industry was clearly pleased that its carve-outs were intact and praised the move, particularly noting that any 'harmful elements' in future 'rule-making' would be prevented . The Frist measure contains language that recognises the horse racing industry's right to offer account wagering under the Interstate Horseracing Act of 1978 - an important historical carve-out together with state lotteries.

"This is a very significant landmark recognition by the [United States] government of our industry's legal right to conduct wagering under the IHA and of our industry's important position as an agribusiness that supports 500,000 jobs," said Greg Avioli, chief executive officer of the National Thoroughbred Racing Association and Breeders' Cup Ltd. "The bill also includes language that will prevent the addition of harmful elements in any rulemaking required by the bill. This language was crucial for our industry."

Other provisions are still being debated, for instance whether the law can be used to control American ISPs, or whether affiliates and other entities providing gambling information might be vulnerable if based on US soil or carried out by American citizens.

The reaction to any final US regulations that might be developed in the 270 day implementation planning period could be serious. Legal advisers for one major online payment processor have already indicated to the portal Gambling911.com that they plan on joining in on any pending litigation that might materialise as a result of this bill. A third party risk meeting is slated this coming Thursday in London, the portal claims.

One of the best assessments was posted at The RX message board after a detailed but lay study of the legislation. The conclusions were that:

Quote:

1-Neteller might go away. It will be their choice, but they may decide not to take American customers. They are not subject to this law as they are a foreign based banking operation - but they might abide by it.

2-There is a 270 day period [during which the AG and the Federal Bank] to figure out how to enforce it. Right now there is no way because there is no coding of EFT's. It is possible that they might not even find a way to do this or it might be too expensive.

3-Nothing in this bill criminalizes your behavior as the bettor.

4-Nothing in this bill criminalizes you if you are not a bookmaking operation and you send or receive payments.

5-The responsibility is on US banking, payment processors, and epayment services to stop this.

6-American hosts of illegal gambling websites will have to stop. I do not believe that ISP's have anything to do with this and there will be no attempt to block XXXXXX from getting to your computer.

Unquote

Little is likely to change in the short term for the online gambler, but there will undoubtedly be intense legal and financial planning activity for operators, international financial institutions and law enforcement agencies in the States. It is however highly unlikely that this latest American legislative move constitutes the death knell of a thriving and successful industry, and this issue will be playing out over a long time yet.

Sunday, October 01, 2006

Prison officers bust football gambling syndicate in Hong Kong jail

 

Prison officials in Hong Kong said Saturday that they had broken up a major football gambling syndicate inside one of the city's maximum-security jails. Eight thousand packets of cigarettes believed to have been used to stake bets on English Premier League and European Champions League matches were seized in the operation. Nearly 100 hand-made soccer betting slips were also seized in the raid Friday inside Hong Kong's Shek Pik Prison, a spokesman for the territory's Correctional Services Department said. Prison workshops, cells and activities were raided by 81 officers during the operation, said the spokesman, who added that disciplinary action would be taken against inmates involved in the gambling ring. Betting on football is hugely popular in the gambling-mad city of 6.8 million people, where English and European matches are broadcast live via satellite and cable TV channels. The only legal forms of gambling in Hong Kong are twice-weekly horse races and football bets placed through the official Hong Kong Jockey Club.

US Congress ticks Net gambling ban bill

 

Most forms of internet gambling would be banned under a bill that received final US congressional approval on Saturday. The House of Representatives and Senate approved the measure and sent it to President George W Bush to sign into law. The bill, a compromise between earlier versions passed by the two chambers, would make it illegal for banks and credit card companies to make payments to online gambling sites. Democrats had accused Republicans of pushing the bill to placate its conservative base, particularly the religious right, before the Nov. 7 congressional elections. "It's been over 10 years in the making. The enforcement provisions provided by this bill will go a long way to stop these illegal online operations," said Sen. Jon Kyl, an Arizona Republican and a chief sponsor of the measure. Negotiators from the Republican-led House and Senate reached a deal on the legislation Friday and attached it to unrelated legislation to bolster port security, which the Congress approved. The final bill dropped earlier provisions opposed by some gaming interests that would have clarified that a 1961 federal law banning interstate telephone betting also covers an array of online gambling.

Investors in British-based gaming companies such as BETonSPORTS Plc, Partygaming Plc and 888 Holdings Plc have tracked the legislation.

Senate Majority Leader Bill Frist, a Tennessee Republican and potential 2008 presidential candidate, recently appeared at a hearing in Iowa - the state that holds the first presidential nominating contest for the 2008 election - to listen to concerns about internet gambling.

Internet Gambling, Port Deals Reached

 

House and Senate negotiators reached agreement last night on legislation to tighten maritime and port security regulations and, in a last-minute move, added an unrelated measure that seeks to ban Internet gambling. At the same time, House negotiators prevailed in their fight to strip out $4.5 billion in rail and mass-transit security funds included in the Senate provision. The port security and Internet gambling legislation was approved 409 to 2 in the House and on a voice vote in the Senate early today, as lawmakers rushed to leave Washington for their fall reelection campaigns. Senate Republican and Democratic leaders announced it would be passed by voice vote after the House's late-night vote. Lawmakers from both parties had been crafting the port security measure for more than a year, but its passage became politically critical after a Middle Eastern government-owned company's purchase of U.S. port operations triggered a political melee in Washington early this year. The final agreement requires radiation scanning of all containers at the top 22 U.S. seaports, orders the Department of Homeland Security to develop response and recovery plans for a terrorist attack, and sets firm deadlines for the implementation of a transportation worker identification and screening system. It authorizes $2 billion in port security grants between 2001 and 2011. The changes angered some Democrats, who helped craft the original port security legislation but were largely blocked from the final negotiations. The Senate had overwhelmingly approved the authorization of $3.5 billion for mass-transit security grants and $1 billion for freight and passenger rail programs, but House Republicans balked at the cost.

Senate Minority Leader Harry M. Reid (D-Nev.), whose home-state casinos are split over the Internet gambling measure, briefly weighed scuttling the bill over the provision before agreeing to go along, aides said.

House and Senate Republican leaders pushed hard to secure the Internet gambling measure, which some Republicans viewed as a chance to clear their names after they allowed disgraced lobbyist Jack Abramoff to scuttle a similar measure six years ago.

Proponents of the crackdown said the industry, which is mostly based overseas, provides a front for money laundering, some of it by drug sellers and terrorist groups, while preying on children and gambling addicts. Americans bet an estimated $6 billion per year online, accounting for half the worldwide market, according to analysis by the Congressional Research Service.

A coalition of on-line poker players and gambling Web sites tried to thwart the Internet gambling provision. Michael Bolcerek, president of the Poker Players Alliance, argued that it could put familiar Web sites such as Party Poker and Pacific Poker out of business while pushing gamblers to "rogue Web sites with no protection for children and no protection for problem gamblers."

Internet Gambling in Chaos After Port Security Bill Passes

 

The Port Security Bill, which will increase security along all United States ports, overwhelmingly passed both the House and Senate in the midnite hours of Friday night early Saturday morning. Attached to the quality security bill is a a completely unrelated measure that directly affects internet gambling. So what exactly does this bill do to the state of internet gambling? The quick and honest answer is... we have no idea. Differing analysis can be found on whatever site you get your news from. As far as the Casino Gambling Web is concerned, this is how the newly passed bill is to be interpreted... In its most literal form the bill makes it illegal for banks to allow online payments to be made to online gambling operations. What is interesting about the bill is that it does not include language that upgrades the 1961 Wire Act to include online gambling, which the House passed bill did include when it passed in July of this year. This means that the state of online gambling is exactly the way it was before for players - still in a grey area. It is no more illegal now than it was before the bill passed. What will happen now all depends on what the banks do as a result of the bill passing. Will they stop payments to Neteller, a known third party gambling banking company?

The banks already stop payments to online gambling operations directly.

Will the banks comply with the new laws?

Will the banks even be able to comply with the new laws?

Don't the banks already stop payment to gambling operations?

We will keep you up to date with what is happening, but for now, everything you read is just speculation and nothing should be read as fact.

Until more is known, keep expressing your freedoms in the United States.

GOP Aims to Crack Down on Web Gambling

 

Congressional Republicans attached a measure cracking down on Internet gambling to a bill aimed at enhancing port security that passed Saturday. Senate Majority Leader Bill Frist, R-Tenn., and Sen. Jon Kyl, R-Ariz., pushed for the gambling provision to be added to the larger bill. Online gambling is generally illegal in most circumstances, but it is something that is difficult to enforce. The new measure tackles that by prohibiting gamblers from using credit cards, checks and electronic fund transfers to settle their online wagers. "The enforcement provision provided by this bill will go a long way to stop these illegal online operations," Kyl said late Friday. Kyl and Frist previously tried unsuccessfully to put the measure on a bill authorizing funding for the military, but critics said the Defense Department bill was no place for the gambling measure. Similarly, Democrats complained Friday that Republicans had used the port security bill as a vehicle for other GOP-backed measures. The House passed a version of the Internet gambling bill in July, but the Senate has taken no action on similar legislation.

Frist, eyeing a 2008 presidential bid, recently discussed the online gambling provision in the politically important state of Iowa. He also called it a legislative priority in a recent speech on the Senate floor.

"Congress has grappled with this issue for 10 years, and during that time we've watched this shadow industry explode," Frist said in a statement Friday. "For me as majority leader, the bottom line is simple: Internet gambling is illegal."

The measure's supporters include the National Football League as well as conservative and antigambling groups. Some banking groups have lobbied against it.

Federal officials have made recent arrests involving offshore companies operating Internet gambling sites. The Internet gambling industry is headquartered almost entirely outside the United States although many of its customers live in the U.S.

The new gambling provision is not expected to affect gambling at tracks or casinos.

Former gambling chief Dicks is freed in US

 

The internet gaming industry breathed a sigh of relief yesterday when Peter Dicks, the former chairman of Sportingbet, was released from US custody and allowed to return to Britain. Mr Dicks became the second UK internet gaming executive to be arrested when he was held in New York three weeks ago under a warrant issued by the state of Louisiana charging him with "gambling by computer". A New York judge dismissed the warrant yesterday after the New York State Governor, George Pataki, refused to sign an order to extradite Mr Dicks to Louisiana to face the charges against him. However, his lawyer, Barry Slotnick, said the Louisiana warrant remained in effect. He said Mr Dicks would be dealing with the Louisiana authorities on the charges, "hopefully putting this entire matter to rest". As he left the criminal court in Queens, Mr Dicks said: "I'm very grateful." Asked if he would return to Sportingbet, he said: "They've had enough of me." He resigned from Sportingbet a week after his arrest.

Sportingbet has continued to take bets from US customers and carried on advertising stateside, even though internet gambling is a legally grey area in the US. Earlier this week Louisiana police warned all online gaming companies to stop accepting bets in the state. It is thought the state has issued warrants against more than 50 people connected to more than 10 online gambling or related firms. Shares in the sector have fallen sharply since the arrest of the then BetonSports chief executive, David Carruthers, in July. The chairman and another non-executive director of World Gaming stood down from the board over the legal uncertainty this week. Meanwhile, ukbetting yesterday bought the online gaming website of London's Ritz Hotel, owned by the Barclay brothers. The Ritz shut down the website earlier in the week but it went back up again on Thursday night. The price was not material enough to be disclosed.

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