Casino Watch - December 2003

1 December 2003
New Zealand Officials Warn of Online Casino Fraud

Officials with the Department of Internal Affairs in New Zealand issued a warning last week that a company offering $25,000 for a casino franchise is a fraud.

The office warned that a few companies, which paid the money to Casino Slot Club for the licensees, have been duped.

"Organizing, promoting, managing or conducting online casinos in New Zealand is illegal. Casino Slot Club's promotional material incorrectly stated that New Zealand franchise holders would assume absolutely no legal or financial risk," said Keith Manch, the general manager of the department's gaming and censorship regulation group.

Casino Slot Club is based in Malta and is expected to challenge the statement, according to published reports. The company has servers in Vanuatu and a business office in Australia set up for selling franchises in the Pacific market.

Manch said even if the businesses' holdings are offshore, the company or franchise-holders active in New Zealand are subject to New Zealand law.

Kentucky Lottery Abandons Plan for Online Keno

The Kentucky Lottery last week ditched plans for an online keno game after receiving a public vote from the state's newly elected government against the plan.

Gov. Ernie Fletcher Fletcher said the online casino game would violate the limits on games of chance. Arch Gleason, president of the Kentucky Lottery, said he agreed with the governor and that the lottery board supported the decision to drop the project.

Agreement reached in Detroit paves way for new casinos

The Lac Vieux Desert Band of Lake Superior Chippewa Indians agreed to settle a lawsuit against two Detroit casinos for $79 million, paving the way for the construction of permanent casino-hotels in the city in time for the 2006 Super Bowl.

But the tribe remains at odds with the city's third casino, MGM Grand Detroit, and will continue efforts to block MGM's permanent gaming facility.

The tribe, which has 430 members and a casino in Watersmeet in the Upper Peninsula, filed suit in 1997, saying its constitutional rights were violated when the city gave license preferences to MotorCity and Greektown casino ownership groups.

Mayor Kwame Kilpatrick announced the settlement at a Tuesday evening news conference. Greektown Casino and Detroit Entertainment LLC, the owner of MotorCity Casino, will each pay $39.5 million to the tribe over the next 25 years under a deal hammered out with help from Kilpatrick in Las Vegas in September.

The Lac Vieux tribe claimed in its lawsuit that Detroit had stacked the deck with its licensing ordinance.

The tribe is recognized in the I-gaming circles for its efforts to develop an online bingo business. They developed a site using technology from dot com Entertainment and went through beta testing in 2001, but did not launch a live betting services.

Ad Blitz for Ladbrokes

With competition getting fiercer in the I-gaming space, one of England's strongest land-based gaming brands ran an aggressive advertising campaign last month for its online casino.

Ladbrokes' Casino Freeplay campaign, launched Nov. 19, included advertisements at England's top Web sites as well as promos on the side of skyscrapers. The 10-day effort, was slated to bring in more than 55 million page views for the site.

Ladbrokes is heavily advertising in major portals, such as Yahoo, Freeserve and Tiscali, and other online gaming sites, such as Lucky Surf and Daily Draw.

Throughout the campaign, Ladbrokes offered new customers a chance to play for free every day 1,500 prizes up for grabs.

Station Reaches New Highs in Las Vegas

For the longest time, Station Casinos Inc. has made a killing by billing itself the casino for locals who live in Las Vegas.

The company more than tripled its profit in the third quarter this year compared to the same period last year thanks to strong returns at its Green Valley Ranch Station in Henderson, and the success of the new tribal casino it manages, Thunder Valley near Sacramento.

The company earned US$19.8 million, or $0.32 per share, in the third quarter compared to $5.7 million, or $0.09 per share a year ago. Station expects to add more slot machines at Thunder Valley and will also begin construction on a $110 million expansion of Green Valley Ranch to add hotel rooms and expand the spa, hoping the improvements will result in about $4 million to $5 million in incremental profit per year.

Failed Trader Lands on Gaming Site

Nick Leeson, the former trader who played a role in the 1995 collapse of Barings Bank by running up £800 million in hidden losses, is trying his hand at an online gambling site called

Leeson will play hands of poker with customers when the site launches and is expected to make more appearances for the site afterward.

"Nick's an international name in the world of gambling, obviously," Celebpoker's managing director, David Donovan pointed out. "Unfortunately, so far he's not been so good on that front."

While employed by Barings, Leeson lost £59 million in a single day on the Singapore stock exchange.

Donovan has lined up a roster of famous poker players, and hopes that the prospect of pitting their wits against the likes of snooker champion Jimmy White, comedian Kenny Lynch, and magician Michael Feighan will draw punters.

They've signed up more snooker players and was hoping to attract some England rugby players. The site has even held talks with poker fan Stephen Fry, Donovan said.