A Look Back at 2000 (January - June)

31 December 2000

January 11 - New Jersey state senators Richard Codey and Robert Singer introduce a bill that would legalize account wagering in their state. The bill leaves the door open for Internet-based account wagering by allowing for the transmission of bets via "communication through other electronic media."

January 12 - Michigan Governor John Engler puts his signature on Senate Bill 562, a law that makes it illegal to offer online gambling to minors in that state. The cybercrime bill, introduced by Majority Floor Leader Mike Rogers (Rep.), addresses cyberstalking, death threats, weapon sales, and yes, online gambling. In a nutshell, Act 235 amends the Michigan Criminal Code by calling for $2,000 fines and/or two years in prison for illegally offering online gambling to Michigan residents. Law professor I. Nelson Rose later points out that language in the law actually leaves the door open for Michigan casinos to take bets online.

January 13 - British bookmaker William Hill enters the online casino business via the debut of William Hill Casino, the new online casino operated by William Hill Internet Ventures. The software was developed by CryptoLogic Inc. subsidiary Intertainet Overseas Licensing Limited (IOLL).

January 14 - Three months after an investigation into criminal activity, the Los Angeles County District Attorney and the Los Angeles Police Department reach a settlement with interactive race wagering service provider Youbet.com. According to Youbet.com, no issues of law or fact are determined under the settlement, and both parties agree that a "prompt and comprehensive civil resolution of the matter" is best. Pursuant to the settlement, the company will no longer handle wagers from California subscribers, and until state law is clarified, these customers will only be able to receive Youbet's information services. Additionally, Youbet.com agrees to move from California certain equipment that might be considered to record wagering information. The kicker: Youbet also has to pay $1,308,250 in court costs, civil payments and contributions to the Los Angeles County Education Foundation and the California Council on Problem Gambling.

January 18 - An Internet gambling prohibition bill surfaces in the South Dakota House of Representatives. Introduced by House Speaker Roger Hunt, HB 1110, seeks to "prohibit the use of the internet for certain gambling activities"--those certain activities being the running of an gambling establishment in which a transaction "originates or terminates, or both," in the state of South Dakota.

January 19 - Online gambling prohibition bills are introduced in the Tennessee House and Senate. Both bills would make it illegal to either gamble on the Internet or be engaged in the operation of an Internet gambling business. Those who wager on the Internet would be charged with a misdemeanor, while it would be a felony to "design, develop, manage, supervise, produce, establish, maintain or operate an Internet site that permits gambling over the Internet." The felony carries hefty fines of up to $20,000 for each charge. Neither bill moves forward in 2000.

January 26 - Penthouse, the famous adult entertainment publication, announces that it's teaming with gaming industry veteran Ed Fishman and software developer Gaming & Entertainment Technology (GET Group) to launch a new online casino in Australia. The partnership is the first of several in the year 2000 to be established between online gambling firms and companies with hot brand names to sell. The deal is nixed in September.

January 26 - The proprietors of Paradise Casino, an Internet and telephone sportbook, plead guilty in a St. Louis federal court to charges of violating the Wire Wager Act, money laundering and endeavoring to impair or obstruct the IRS Administration of the Internal Revenue Code. According to the prosecutor, Assistant U.S Attorney Mike Fagan, the case could be the first of many to be heard in St. Louis.


February 1 - The Mediterranean island country of Malta joins the growing list of government-regulated online gambling jurisdictions by passing legislation that permits the licensing of online bookmakers. A handful of sportsbooks, mostly from Great Britain, will soon call the island home.

February 4 - MGM Grand Chairman Terrence Lanni is elected Youbet.com Inc.'s board of directors. Considering the zero-tolerance approach toward Net betting taken by Nevada regulators, the move comes as quite a surprise, although it was somewhat foreshadowed in October of '99 when Lanni proclaimed that he was interested in pursuing Internet-related ventures. He subsequently steps down from the board position in June after recommitting himself to a fulltime role with MGM Mirage.

February 8 - Microsoft announces that it is teaming with Virgin Airlines head Richard Branson in his bid to run the U.K. national lottery. Microsoft's role is to provide the necessary technology and software for the lottery to be accessible via the Internet, mobile telephones and interactive television.

February 11 - The Public Sector Gaming Study Commission, a non-partisan group of U.S. state officials assembled to address issues involving gaming in the U.S., releases the draft version of its final report. In the report the Commission finds that Internet gambling is illegal and recommends that regulations be written to prevent advertising of online gambling sites via TV, radio and the Internet. The official version of the report is released in April.

February 14 - The long-awaited trial of World Sports Exchange President Jay Cohen commences in a Manhattan courtroom. It immediately becomes clear that the outlook for Cohen, charged with conspiracy and violating the Interstate Wire Wager Act, is not good.

February 16 - British bookmakers continue to push for a lower betting duty in England. Industry representatives meet with Treasury Minister Stephen Timms MP to press their case for a reduction in duty to 3 percent from the present rate of 6.75 percent. It is the beginning of a long battle to stop the mass exodus of British bookmakers to offshore locations. As of the end of 2000, the tax rate remains the same.

February 18 - British Home Secretary Jack Straw announces the terms of reference for the Gambling Review Body, a panel that is expected to make recommendations for the kind and extent of regulation appropriate for gambling activities in Great Britain. The panel will review British gaming law with an eye on current and future gambling trends, including the advent of the Internet.

February 23 - A Net betting prohibition bill surfaces in California. Assembly Bill 2179, if passed, would make it a misdemeanor to operate an online gambling site based in California or to make online gambling available to persons in California. The penalty for doing so is imprisonment in a county jail (not to exceed 90 days), a fine (not to exceed $1,000 per transaction) or both. Nowhere, however, does the bill define what constitutes a transaction. No action is taken on this bill during the year 2000.

February 28 - A New York jury finds World Sports Exchange President Jay Cohen guilty, on all counts and all causes, of violating the Interstate Wire Act of 1961 in the United States Southern District of New York.

February 29 - The Hong Kong Jockey Club reveals that it is considering offering online betting on horse races, and the legal climate is sure to be a major factor in their decision-making process. In the absence of a definitive policy for online gambling, a government official tells the South China Morning Post that betting on horse races over the Internet is legal.

February 29 - The British Court of Appeals overturns a previous High Court decision that allowed Victor Chandler and other U.K. bookmakers to advertise their offshore betting services on electronic media such as teletext.


March 1 - MasterCard implements a new policy in which the chargeback limit for online gaming merchants is cut from 2.75 percent to 1 percent. Those who cannot keep their chargebacks lower than 1 percent will face steep fines. Most e-commerce/e-gaming experts agree that such standards will make things extremely hard on Internet gambling operators.

March 9 - The House of Representatives hears testimony on Rep. Bob Goodlatte's Internet gambling prohibition bill, a companion piece to Sen. Jon Kyl's act which passed in the Senate in November 1999. It's the beginning of a long, hard year for Goodlatte.

March 10 - The U.K. Home Office selects the nine members of the Gambling Review Body.

March 13 - Upscale British casino operator Stanley Leisure officially enters the 21st century through the purchase of a pair of Caribbean online casinos. The deal signifies yet another instance in which a British gaming company moves offshore to go online in the absence of a satisfactory Internet gambling regulations in the U.K. The company additionally announces plans to develop a third site as well as an Internet sports betting service based in the Mediterranean.

March 14 - The Ohio Lottery Profit Review Commission (LPRC) releases a draft report after holding several meetings (commenced in February) to discuss why state lottery ticket sales have fallen and how to improve them, including possible Internet ticket sales. The draft report contains an overview discussing Internet lottery ticket sales, which briefly touches upon the pros and cons of such a move. The LPRC, however, is uncertain of its authority to pursue Internet sales and advised the governor and state assembly to decide whether it should be pursued.

March 15 - The Age reports that the Australian federal government will throw its support in the corner of a proposed moratorium on the expansion of Internet gaming Down Under. The moratorium proposal is drawn from recommendations made by the Australian Senate Select Committee on Information Technologies in a 110-page report to be released the next day. The report, "Netbets - A Review of Online Gambling in Australia," comes at the conclusion of a several-month-long inquiry into online gambling.

March 20 - The South Korean government has launched a massive effort to block its citizens' access to online gaming sites, while admitting that the feat is nearly impossible. The government discovered a Korean virtual gambling site in January, which has led to the crackdown, according to The Korea Times. Internet businesses were also complaining that employees were gambling online while at work.

March 21 - U.K. bookmakers' hopes for a lower betting duty are dashed as the Treasury's new budget announcement makes no such reference. Instead, the government is considering basing duty on gross profits and where the actual wager was placed.

March 22 - Louisiana House Speaker Charlie DeWitt introduces a bill, HB 85, that would legalize pari-mutuel account wagering in which wagers are made "in person, by telephone, or by other electronic communication." In short, the bill enables Fair Grounds Race Course to take bets over the Internet. A little more than a month later, the bill becomes a law.


April 4 - New Jersey's and Nevada's race to capture the Internet gaming market commences as New Jersey Assemblyman Joseph Azzolina reveals that he's examining the pros and cons of legislation that would enable Atlantic City Casinos to offer their games over the Internet.

April 14 - Nevada officially jumps into the race with New Jersey as the Gaming Commission meets for a day of training on Internet gaming issues.

April 14 - The government of Sweden announces that Svenska Spel, a government-owned gaming company, will operate an online casino. Technology will be provided by Swedish software developer Boss Media.

April 19 - The Australian federal government formally proposes to states and territories its recommendation for a one-year moratorium on Internet gaming. The states reject the plan, and the federal government threatens to override the states with its own legislation for a moratorium and possibly even prohibition.

April 19 - South Africa's National Gambling Board holds a conference for the entire gambling industry, including Net betting proponents, and the outlook for Internet gambling is favorable. Africa News Online reports that the South African government is expected to legalize Net betting this summer, but John Lee, vice president of business development for Sun International, is a little more cautious. Lee suggests that legislation is likely to pass by the end of this year, or mid-2001.


May 11 - U.S. congressmen James Leach of Iowa, John LaFalce of New York and Richard Baker of Louisiana introduce a bill to prohibit the use of credit cards, debit cards, checks, bank drafts or electronic transfers to place bets, collect winnings or conduct gambling activities on the Internet. The measure, H.R. 4419, is intended to work in conjunction with H.R. 3125, the House version of the Kyl bill.

May 12 - A meeting of the Gaming Regulators European Forum (GREF), comprised of gaming regulators from throughout Europe, covers Internet gaming issues and European Union developments. Fifty-two representatives from 20 European nations attend the session in Ljubljana.

May 13 - The Association of Racing Commissioners International announces at its meeting in Puerto Rico that it is forming the Internet/Off-Shore Betting Task Force, to be composed of regulators, track representatives and horsemen's groups, "to bring legitimate off-shore operations inside the tent so they can start working with the racing industry instead of against it."

May 16 - The New Jersey Assembly Commerce, Tourism, Gaming and Military and Veterans' Affairs Committee announces that it will explore the prospect of regulated Internet gambling. The session comes on the heels of New Jersey Assemblyman Joseph Azzolina's proposition in early April for Congress to weigh the pros and cons of legislation that would enable Atlantic City casinos to offer their games over the Internet. It also follows a similar meeting held by the Nevada Gaming Commission in mid April. The meeting will take place May 31.

May 17 - Britain's Gambling Review Body formally asks for written comments regarding the future of gambling in the U.K. The panel is studying both the current state of the gambling industry and likely developments over the next ten years, and will make recommendations on the nature and extent of regulation for gambling in the U.K. Among several issues, the panel will look into the feasibility of regulating Internet casino gambling.

May 19 - Australia's federal government introduces legislation to ban the issuing of new online gambling licenses during the next twelve months. The decision to seek a moratorium comes after Australian states and territories, with the exception of Western Australia and New South Wales, choose not to acknowledge the proposed policy in April.

May 19 - A new series of class-action lawsuits alleges that MasterCard International Inc., American Express Co., and banks such as Chase Manhattan Corp. and MBNA America Bank, have engaged in illegal bookmaking operations by allowing customers to amass credit card debts at illegal online casinos, a series of lawsuits allege. Gamblers who used credit cards to wager from $60 to more than $10,000 at offshore casinos claim in 10 lawsuits filed in federal court that MasterCard, American Express and 10 other financial institutions are aiding illegal offshore betting parlors and should be barred from collecting the gambling debts.

May 22 - With the federal moratorium on the issuing of new interactive gaming licenses looming in Australia, a few of the states and territories seem to be eager to hand out as many as possible while they still can. In particular, Tasmania and the Australian Capital Territories issue several licenses over a two-week period.

May 26 - A bill titled the "Off-Track and Account Wagering Act" is introduced in the New Jersey state Senate Committee on Economic Growth, Agriculture and Tourism. The bill, S. 1343, is sponsored by Republican senators Martha Bark and Robert Singer. The bill is the second account wagering bill to be introduce in 2000 in New Jersey and, like the first one, includes language that leaves the door open for Internet wagering.

May 26 Gibraltar-licensed Coral Eurobet unveils its new WAP-enabled betting service. The mad dash to capture the mobile betting market has begun

May 30 - U.S. software giant Microsoft Corporation again dips its toes into the U.K. interactive gaming waters. An alliance between Microsoft and Ladbrokes, one of the world's largest bookmakers, will promote the betting service on Microsoft's U.K. Internet portal, MSN.co.uk.


June 1 - GoCorp's AusVegas portal and betting site and Federal Hotels' Wrest Point Casinos launch state-licensed online casinos despite the Australian federal government's hurry to prevent the issuing of additional interactive gaming.

June 1 - Sportingbet.com Plc becomes the U.K.'s first bookmaker to take bets via interactive television. The new service, part of a three-year deal, enables 1.6 million Telewest subscribers to place bets from their sofa with the click of their television remote by subscribing to Active Digital.

June 7 - U.S. Rep. Chris Cannon, a member of the House Judiciary Committee, and Reverend Lou Sheldon, chairman of the Traditional Values Coalition denounce Rep. Bob Goodlatte's Internet Gambling Prohibition bill. "More damage will be done with a bill that partially prohibits what is fundamentally wrong," says Cannon. "Government is a powerful teacher and it should teach with clarity. The social ills associated with gambling are not selective, but cross the spectrum of class, income, and religious persuasion." The outlook for Goodlatte is beginning to look bleak.

June 8 - Perturbed by the formation of offshore closed-loop gambling services, the Association of Racing Commissioners International (ARCI) announces that it's forming an Internet/offshore betting task force to address the issue. "Many of these sites aren't regulated," explains Tony Chamblin, the association's president. "They don't put any money back into the industry and they don't pay any taxes."

June 15 - While politicians in Washington D.C. battle over the Internet Gambling Prohibition Act, another kind of legal drama is played out in California. The ongoing investigation into the alleged illegal betting activity of the individuals who ran gaming software firm Handa Lopez, nearly 13 months after their Sunnyvale offices were raided, comes to a head when a two-count indictment against the two individuals as well as the company is filed in a San Jose Federal Court. Named in the indictment are Handa Lopez, David Brown and Raymond Clark.

June 20 - Two panels present their views on the Internet Gambling Funding Prohibition Act (HR 4419) before the U.S. Committee on Banking and Financial Services. Discussions afterward are dominated by unresolved questions regarding enforceability and exemptions. The bill is marked up June 28, but goes no further.

July - December

Mark Balestra

Mark Balestra is the Managing Director at BolaVerde Media Group. He previously worked at Clarion Gaming and the River City Group where he was the publisher of iGamingNews. He lives in St. Louis, Missouri.