From the Editor's Chair | v. 25

In case you took a well-deserved holiday last week:

The Department of Justice struck again. Whether we'll ever know definitively whose $24 million that was will likely remain a mystery. While court documents strongly suggest a link to Bodog Entertainment Group, the facts remain elusive.

That the seizure came as any surprise is, in my opinion, surprising. Like Martin D. Owens Jr. wrote last week, bearing the Neteller seizure in mind, it's hard to imagine why Bodog, a grizzled operator by industry standards, would have left that money -- any money -- in American bank accounts.

Seeing a court document pitting the United States government against an unclaimed sum of money was, among many other things, a highly novel legal anomaly these young eyes hadn't witnessed before. With bated breath, I'll be watching to see whether the Justice Department releases any P.R. reminiscent of that accompanying the settlements with Google, Microsoft and Yahoo.

CryptoLogic Ltd. has had a rough run of it lately, with its London shares hitting a one-year low Friday. Despite an increasing number of licensees -- several of whom were acquired during this fiscal year -- will increased operating expenses hurt incremental revenue gains during the second half?

In my experience writing about this industry, I've found it's difficult -- unreliable -- to read a company's performance and prospects by its share price. While each company has its own investment-related quirks, one needn't look further than PartyGaming to argue soundly that I-gaming stock value has but limited value in making performance-related judgments.

Subjectively, CryptoLogic is an old dog -- don't worry, there's no follow on here with "new tricks" to round off the cliché -- and with an ambitious chief executive to rally around, investors may yet find hope. If nothing else, this company is sure to weather the storm.

The following might be an argument you've already heard; if so, my apologies, but this is a dead horse worth beating. Like one of our analyst experts polled last month, I believe the casino lobby in the United States has the power to effect change on the federal level.

The Internet Gambling Study Bill, introduced some time ago by Representative Shelley Berkley, could be the first step in getting the American Gaming Association behind a more commercially friendly version of "regulated" Internet gambling (caveat quotes entirely necessary).

Ms. Berkley's bill was not addressed during last week's markup, though, given its neutrality -- a term social conservatives are sure to lambast me for using -- this one may just find its way to the president's desk.

At heart, the casino enterprise is an economic one; I just wonder when, if ever, we'll see the land-based giants press for Internet gambling to supplement lost revenue on rising operational and consumer costs.

It was useful (but not surprising) to learn that I-gaming companies are finding creative ways to legally engage the Chinese market. AsianLogic Ltd. last week did a deal with C Y Foundation to launch an online, player-to-player network targeting the mainland.

While always skeptical of Beijing's attitude toward Internet-based forms of entertainment, I would say that AsianLogic, with this venture, would certainly seem less exposed to a Chinese government fond of The Crackdown.