From the Editor's Chair - v2

13 October 2003

It's not a good time for I-gaming affiliates, and last week's raids on dozens of I-gaming operators in Italy are another sign that it's not going to get easier. The sector borne from Internet gambling's most effective marketing strategy was bound to yield to a period of attrition, but the recent crackdowns could speed things up. It's doubtful that law enforcement in the United States, Italy or anywhere else will put the industry's top affiliates out of business; they're strong and they won't back down. Many of the lower-tier, "less interested" affiliates, on the other hand, may channel their entrepreneurial energy toward less risky endeavors--activity the U.S. government is less concerned with, such as the black market for prescription medication. The barriers to entry in the affiliate sector need to be raised, but this obviously isn't the ideal way to get there. Fortunately, there's plenty of Xanax out there for stressed out I-gaming advertisers struggling to make ends meet.

Sportingbet seems to be in a "damned if you do, damned if you don't" predicament. The rapidly expanding U.K.-based bookmaker purchased in 2001 and then outperformed its earn-out expectations. That translated to a £93.7 million bill due to's former owners, and had Sportingbet entertaining takeover bids this past July. Fast-forward three months and the hard reality of "success" has given way to a different flavor of adversity. The company lost about £2 million over a two-week span from late September to early October because of streaks of victories from favorites. According to a spokesperson, "The three major sides in each of the top five European leagues have played about 120 games, and only three have resulted in wins for the underdog, with just eight draws." The company's earnings estimates for the half year ending Sept. 30 are consequently about £2 million below expectations.

Speaking of streaks, it's been several weeks since the sporting world has experienced a Golden Palace streaker. What's the deal, GP? The well advertised online casino has received much "exposure" this year, thanks to a series of nude "guests" making special appearances at major sporting events wearing nothing but ink advertisements for After growing accustomed to the GP streaks, I was quite surprised last week to see a pair of woman streaking a sporting event, with no Golden Palace-related markings on them whatsoever. Without the GP URL written across them, they looked... well... naked.

If an international organization rules in favor of Antigua in a complaint lodged against the United States in the forest, and no one's there to hear it, does it make a sound?

There's never a dull moment in the P2P business. Most recently, exchange betting's poster child,, announced it was setting up an Australian office--this in response to the Communications Minister Richard Alston's recently announced plans to retire. Alston's departure means that the amending of Australia's 2001 Interactive Gambling Act will almost certainly be postponed, giving Betfair precious time to stake its case amid strong desires Down Under to cut P2P out of the picture. But these developments were trumped last week by the stirring of the pot in England. U.K. Gambling Minister Andrew McIntosh said Tuesday that consumer-protection measures aimed at betting exchanges will be included in the country's new gambling bill. Observers wearing P2P colors welcome firm controls and see the new provisions as a means of ensuring the legitimacy of betting exchanges. But those who oppose exchanges are suggesting that the call for further consumer-protection measures illustrates the government's leeriness of P2P betting and could be a step toward doing away with them.

So what's it going to be? My inclination is that P2P will be part of the picture. The United Kingdom has repeatedly expressed its intentions of remaining on the cutting edge as the world's most progressive gambling jurisdiction and they certainly recognize the revenue potential of P2P. Nevertheless, P2P-related scandals keep rearing their heads, making it difficult to justify allowing exchanges. And one more prediction: The gloves will come off in this fight (on both the U.K and Australian fronts). It's already been dirty and it's certain to get dirtier.

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.