Weekly Nambling Notes

27 February 2004

Friday, Feb. 27

Sky News -- Hoping to raise public awareness of its interactive wagering options with more advertising, Sky Bet is running a pitch through AAR for its £5m creative advertising account. At first four agencies will present for the account, but then two will be eliminated before a final pitch by the remaining two…. BettingCorp's Play Monte Carlo has been added to Sky Digital's Sky Active interactive television offering. Play Monte Carlo will provide Sky's subscribers with dice games and slots that can be plaid for fun or real money. Arcade horseracing being added later this month. Designed in-house by BettingCorp's development team, Play Monte Carlo allows players to access the same account via TV, Internet, and mobile platforms.

Problem Gambling Conference -- New Zealand's Gambling Problem Hotline and the Auckland University of Technology's Gambling Research Center will host an international conference with representatives from 40 countries in order to discuss problem gambling. The conference agenda includes critical reflections on the problem gambling policies, services, and research developments of the various countries, in addition to trends, future challenges, and more.

Illegal Gaming in Asia -- Police in Taiwan have arrested several individuals in connection to illegal gambling dens in addition to a husband and wife team and a computer expert who offered online wagering from a site in Macau. Besides lotteries, gambling is illegal in Taiwan. News reports from the area indicate that authorities were especially alarmed that betting on the upcoming Presidential election on March 20th had become wide-spread throughout the island…. A court in Shanghai, China has fined a 51 year-old Taiwanese man, Feng Zaizheng, $36,000 and sentenced him to 30 months in prison for offering illegal online wagering on European soccer matches. Feng's operation allegedly earned over $1 million per day at its peak last summer. Cases involving gambling occasionally reach the courts in Shanghai, but this is the first time anyone has been prosecuted for running an online operation.

Tribeca Deals -- Poker software company Tribeca Tables, says it has " completed several new poker room deals including that of Gaming Floor.com and Casinos of Mayfair.com." The company also plans to introduce new pacts with other partners that will be revealed soon.

Tab War -- Sky Digital's interactive games channel Fancy a Flutter, a joint venture between Rank and NDS, has teamed up with European television production company FreeMantleMedia to launch the classic gameshow Blockbusters as a fixed odds keno game. Players choose between one and fifteen numbers and then receive money for those that match after a numbered draw. Players can bet as little as 20p, and payouts can be as high as £500,000.

Thursday, Feb. 26

Stanley Struck -- Stanley Leisure is the latest British betting company to admit that it has been targeted by hackers trying to extort money by launching DDoS attacks. After several other British companies stated earlier this week that their gaming sites had been attacked, Stanley Leisure revealed that at some pointStanley Racing had been closed down for two hours due to DDoS attacks. Like all the other UK-based bookmakers who have spoken openly about the recent DDoS threats, Stanley Leisure maintains that it will never give in to ransom demands.

Irish Lottery -- The Irish Times reports that within three months Ireland's National Lottery will decide whether or not it will permit mobile lottery games. According to a spokesperson for the National Lottery, "We started a tender process late last year for multi-channel gaming. We're in the middle of that process now and hope to have all the proposals in by the start of May." The National Lottery has not yet decided who it would contract to supply the mobile lottery, but GTECH Corporation looks like a strong candidate after having licensed a mobile gaming platform on Tuesday from Valista, an Irish mobile payments software company…. The National Lottery recently reported that Irish people spent €560 million on lottery scratch cards and Lotto games last year, and 86 percent of that was returned to the public either as prizes or funding for good causes. €295 million was paid out in prizes and €187 million was given to health, sports, and arts projects.

Rumor Mill -- Sports911.com reports that Sportbet, an online gaming company based in Costa Rica, is experiencing a power struggle among its ownership. One man who owns 50 percent of the company has invested much money into the operation since 1998 but has not yet received any return. According to Sports911.com, the man is now trying to take over the business…. Sports911 also reports that U.S. officials investigating a money laundering case have requested that the Irish government freeze the personal banking account of a former online gaming site owner. The account is rumored to have over $5 million.

Norwegian Gambling -- Statistics from Norway's Lottery Inspectorate indicate that Norwegians are gambling more than ever, spending a total of $5.2 billion on gambling games, an average of $1,100 per person. Norwegians spent 22 percent more on gambling this year than they did last year, spending most of it on slot machines. In an attempt to lower the gambling levels, authorities will reduce the number of slot machines from 17,350 to 10,000 next year.

Cambodian Wagers -- Cambodia-based Ho Wah Genting Poipet Casino Resorts Co Ltd, a subsidiary of Ho Wah Genting Bhd, is partnering with Curacao-based Pinnacle Sports Worldwide in order to provide Internet wagering facilities at the HWG Poipet Casino's sports bar. HWG Poipet would like to display betting odds on global events broadcast over the Internet by Pinnacle's web sites. Pinnacle will provide marketing support, training, monitoring, and set-up, while HWG Poipet will supply computers, display equipment, and broadband Internet connections.

New Microgaming Releases -- Isle of Man-based Internet gaming software provider Microgaming is launching four new games on all Microgaming Viper powered casinos. The Big Kahuna is a tribal-themed 5-reel, 9 payline video slot with two bonus features. 3 Card Poker is a fast and easy poker variation where the player squares off against the dealer, and Aces and Faces 10 Play Power Poker is a video poker game that lets players use 10 hands at a time from separate decks. Bonus Blackjack is similar to Vegas Downtown Blackjack, but differs in that it offers players a bonus side bet.

Casino Via Web Cam -- Thanks to a partnership with CasinoWebcam, MVPcasino now features blackjack, baccarat, sic bo, roulette, and Caribbean Stud dealt from live dealers in Costa Rica and broadcast in real time via webcast. Players can now see and hear the games run by CasinoWebcam's croupiers to insure fairness and integrity.

Wednesday, Feb. 25

Tidbit from China -- A survey from China's Organizing Committee of the Internet Civilization Project(OCICP) indicates that the country is home to 5,292 online gaming sites. The survey doesn't specify whether the sites are all gambling- and betting-related or whether that figure includes skill- and arcade-based online games. Additionally, more than 40 percent of online users surveyed said they were always playing online games, and the majority said they would like to see Chinese-made online games for them to play.

Fixed-Odds Crunch -- British gaming operator John Griffith has identified the introduction of fixed-odds betting terminals in betting shops as the reason adult gaming centers are finding current trading conditions tough. Griffith, who owns a gaming center in Tooting, London, said the introduction of the terminals is "really having an impact on us."

Gallagher in the House? -- Former Park Place Entertainment CEO Tom Gallagher said this week that he is considering throwing his hat in the ring for a congressional seat in Nevada. Gallagher, 59, told the Las Vegas Sun that he decided last week to explore running against Republican Rep. Jon Porter for his seat in October. Porter is a freshman congressman who, until now, was facing no credible challenger for Nevada's Third Congressional District. "This is still at the exploratory level at this point," Gallagher said Monday. "I want to make sure there is sufficient interest in my doing this and support for doing this."

Tuesday, Feb. 24

Settlement -- Youbet.com and TVG Network have settled a legal dispute that began in September 2003 when TVG subsidiary ODS Technologies filed for injunctive relief to stop Youbet from holding a shareholders meeting which would attempt to alter the company's charter and by-laws, thereby denying TVG the opportunity to obtain a majority control in Youbet by exercising a warrant that could be redeemed for a large portion of shares. Youbet has agreed to withdraw its proxy proposals, and TVG has agreed to drop all pending litigation. Also as part of the settlement, TVG may not redeem its warrant until after April 1, 2004. The exercise price of the warrant has also been lowered to $36.5 million. If TVG chooses not to redeem the warrant before its expiration date of May 18, 2004, then Youbet must give TVG 1 million new shares of Youbet stock. Youbet must also pay $725,000 for the legal expenses incurred by TVG during the disupute.

Cyber Crime Report -- A two-day "e-crime congress" kicks off today in London with government security officials from Europe and the United States in attendance. Detective Chief Superintendent Len Hynds, the head of Britain's National Hi-Tech Crime Unit, will reveal the results of a survey by research group NOP, which show that British companies from all industries have reported losses of £195 million due to cyber crime. Financial institutions have suffered much bigger losses than other sectors. . . . A spokesperson for the National Hi-Tech Crime Unit told the Guardian that it is investigating six cases of British bookmakers being blackmailed by DDoS hackers. Paddy Power was brought down for several hours on Super Bowl weekend at the beginning of February. Extortionists last weekend targeted Blue Square and Coral. The attack on Coral began Friday night and lasted until Sunday night, but the company said the effect on its business and customers was minimal. Blue Square said that it had not only been hit by DDoS attacks this weekend but also Super Bowl weekend. Blue Square also said the effect was minimal, estimating that only about a quarter of its customers may have been denied service during the attack. Ladbrokes, William Hill, Tote and Victor Chandler said they have never experienced a DDoS attack.

Mobile Lotteries -- Lotteries and gaming company GTECH has licensed the service delivery platform of Irish mobile payments software company Valista, which it will integrate into its own Enterprise Series Interactive architecture, allowing consumers to buy lottery tickets via mobile phones and other devices. Valista will receive a licensing fee, and could see large revenue in the future if GTECH deploys the software in many regions around the world. GTECH is currently involved in the operations of 85 lotteries internationally.

Banking Accounts Seized? -- Sports911.com reports that U.S. authorities have seized all U.S. bank accounts of the owner of Belize-licensed sports book Carib Sports. A spokesperson for Carib denied the claim and insisted that operations are fine.

Korean Mobile Gaming -- Three South Korean wireless carriers, SK Telecom, KTF, and LG Telecom, are looking to capitalize on the growing popularity of mobile gaming. SK Telecom, the largest wireless operator, now has deals with 26 mobile game publishers, though the gaming industry opposes its new business strategies. KTF experienced a 25 percent rise in revenue in January. Propelled by that success, the company has removed a card game service from its offering and is establishing a new gambling category. According to a spokesperson, "We are open to every service provider, but terms of contracts will still hinge on the number of users. It is open competition, with focus placed on large networks and quality games." LG Telecom is also prospering off of mobile gaming, and is currently engaged in a WiPi Technology deal with KTF. Just last month the South Korean government reprimanded a technology provider for jointly offering Internet gambling with a company from North Korea. The government has since said that all gambling, outside of casinos, is illegal, and is currently seeking prosecution against some citizens that used the North Korean gambling site.

Monday, Feb. 23

Cricket Australia to Lobby Government -- The Sydney Morning Herald reports that Cricket Australia is hoping to work with other sports organizations in lobbying state and territory governments to enact legislation that would prohibit athletes, officials and others with inside information from betting on events. Cricket Australia's officials argue that players with inside information can make just as much money by wagering as can investors who cheat the stock market through insider trading. Cricket Australia's chief executive, James Sutherland, said: "It wouldn't be our powers but those of the government to impose hefty fines and potentially jail terms on the most serious offenders than anything we can currently impose or is capable of being imposed under the current legal regime." Cricket Australia already forbids its players to bet on matches, but the organization has little power to investigate alleged betting.

South African Gambling Bill -- According to Reinhardt Buys, an IT attorney in South Africa, a survey by South Africa's National Gambling Board found that 250,000 South Africans (0.6 percent) gamble online. Buys argues that the country's new National Gambling Bill is not going to eliminate online betting and will not provide the means to police it. The bill seeks to prohibit not just the operation of online gaming sites but also consumer gambling and the advertising the gambling sites. The South African Chamber of Business stated that it "believes this provision will be very difficult to police. One only has to consider the high rate of pornographic material and spam that is distributed via the Internet and the difficulty in combating it to be aware that the monitoring of material accessed over the Internet is an extremely difficult task, and as yet no appropriate solutions have been found."

TAB War -- Victorian betting company Tabcorp has increased its bid for NSW's Tab Ltd.. At $2.03 billion, the bid still offers less cash than UNiTAB's $2.1 billion proposal, but Tabcorp believes its deal is superior because it carries the blessing of NSW Racing Pty. Ltd., the body that represents thoroughbred, harness and greyhound racing across the state. The NSW government has said it will authorize legislation to permit one of the betting companies to merge with TAB, but only if that company can guarantee the state's racing industry that it will be no worse off after the deal. UNiTAB has not ruled out revising its current proposal, but NSW Racing's Chairman Tony Hartnell seems very confident that UNiTAB will never gain the favor of the NSW government or racing industry. Hartnell stated, "The possibility that the New South Wales government would publicly argue with the New South Wales racing industry, or vice versa, is low."

Betfair's New Marketing Director -- British betting exchange Betfair has appointed Ian Winton as its director of marketing communications. Winton, who will report to CEO Stephen Hill, will be responsible for all of the company's marketing communications. Winton founded Black Cat Direct in 1997 and served as the company's managing director until it was sold last summer.

DDoS -- Internet bookmakers in Europe have begun receiving e-mails indicating that the next coordinated DDoS attack could unfold in the days and weeks leading up to the Grand Nationals April 1-3. Hackers have begun sending threats to bookmakers and betting exchanges that service Europe, demanding that the betting companies give them money or else the they will launch DDoS attacks that will bring their services offline. Britain's National High- Tech Crime Unit is investigating the recent rash of extortion attempts and believes they are the work of organized criminals and not amateurs. The Financial Times reports that earlier this month representatives from over a dozen offshore betting companies met in Gibraltar to discuss ways to combat the growing threat to the online gaming industry.

Intralot Licensed in Malta -- After an international tender and two years of negotiations, Intralot has been awarded an exclusive eight-year license to operate all state lottery games in Malta. Intralot has established Maltco Lotteries Ltd, a company in which it owns a 73 percent stake. Maltco will install an online network of terminals that will connect to Intralot's central LOTOS System. Intralot will upgrade Malta's current Lotto and instant games and will introduce sports betting games and numbers games. The offerings will be made available through alternative networks.


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