From the Editor's Chair - v17

26 July 2004

Last week's news of Betfair and PBL partnering in Australia could be huge. If they're allowed to get a betting exchange off the ground (and at this point, that's a big "if"), the result will be one of the most powerful interactive gambling brands in the world. Betfair's rise to fame is well documented. Few, if any, online-only operators have equaled their worldwide success, and certainly no one in the I-gaming biz has grown so much in such a short period of time. And in PBL they've found a partner that can inject their brand into mainstream media.

The PBL/Betfair marriage got me thinking about the overall picture for major brands and online gambling. Last December I wrote in my "Year in Review" article that the trend of major brands moving into the I-gaming space was reversing--and it was--but it appears that the tide is turning back already. Since then, Harrah's has turned its new "Lucky Me" subscription-based games site into a winner, Virgin has taken on Internet gambling and most recently PBL has partnered with Betfair.

But none of these heavyweights are new arrivals to online gambling; all have been eying the business for years. First there's Kerry Packer's PBL. Packer made his I-gaming ambitions known back in 1998 when he bid for Crown Casino, which he eventually acquired. Those ambitions came to fruition briefly two years ago with the launch of, which ultimately shut down due to Australian policy making Aussie gamblers off-limits. Now the astute media mogul has recognized the upside of P2P, and he's going for it again. Was there ever any doubt that they'd find their way back into the Internet gambling business? And if the P2P venture is thwarted, he'll find another window.

Then there's Harrah's, which is--and has been for the last decade--the most IT-savvy of the United States' casino corporations. While they haven't been outwardly seeking a place in the I-gaming industry, they've done a fine job of positioning themselves. In 1999, they temporarily bought into Sydney-based Star City, which at the time was planning to launch an online casino. In 2000, they purchased a minority stake in games site and then launched their own free-play online casino--the first of its kind coming from the Vegas market. In 2002, they replaced outgoing CEO Phil Satre with Gary Loveman, the strategist behind Harrah's revolutionary Total Rewards player tracking program--an award-winning system that no doubt brought Vegas' land-based casinos into the IT era. And most recently, of course, they reinvented themselves online with Lucky Me.

And the biggest splash made in Europe for several months--Sir Richard Branson's announcement that his Virgin conglomerate will launch online gambling services--should come as no surprise either. You might recall Branson came inches from securing a license to operate the U.K. National lottery in 2000 only to be denied in favor of Camelot, the incumbent operator. Branson promised to raise much more money than Camelot and one of his means of doing so was to bring lottery sales to the Internet. He even had talks with Microsoft about supplying the technology.

So yes, Virgin, Harrah's and PBL are relative newcomers to the I-gaming industry, but Branson, Loveman and Packer--all very well known for being progressive thinkers--have been in this market for years.

Back to the most recent newsmaker of the three. . . The throwing of PBL's hat into the P2P ring once again begs a question that's been asked over and over for the last year: When will betting exchanges be regulated in Australia? The answer, to me, is clear: As soon as the TABs are ready. The racing industry in Australia has put up a strong front against legalized exchanges, and the recently released review of the Interactive Gambling Act means they may have lost the battle. But, already the TABs are making it clear that if there's going to be regulated exchange betting in Australia, they plan to be first in line to cash in on it. I'm not sure how will go down, but I can't imagine legal P2P betting in Australia without the TABs getting a major piece of the market.

On the DDoS Front. . . I continue to be amazed at the amount of people who aren't taking the DDoS attacks seriously. In last week's very unscientific Readers Poll, IGN asked readers how they would react to a DDoS threat, and an astounding 42 percent (as of Today at 1 p.m. U.S. Central) said they would ignore it. Fifty-six percent said they would prepare to fight the attacks and 3 percent said they would pay off the hackers. Meanwhile, P2P site has taken an interesting approach toward dealing with the attacks. Never a stranger to unusual--and at times controversial--propositions, the Irish exchange recently announced they will accept wagers on IT security disasters, such as the timing of the next big Windows virus or the most likely victim of a future DDoS attack. So, if you're a hacker and your threats of extortion fall on deaf ears, you can always make a few bucks by having a punt at And if you've been threatened, you can always hedge on your potential losses by laying yourself.

Finally a little nugget on the insanely fascist crackdown on advertising to store away. . . As Judge Raymond Gruender bangs his gavel in the 8th Circuit, there's little noise coming from the Eastern District of Missouri, where as a U.S. attorney, he issued subpoenas to approximately 92,000 media outlets for aiding and abetting illegal online gambling services. It's getting to the point where many feel the whole thing will blow over, but don't be surprised if there's movement soon. And don't be surprised if that movement is in a positive direction for the Internet gambling industry.

That's all for now.

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.