Trouble at the Gaming Factory
The U.S. Securities and Exchange Commission in April filed a civil lawsuit against The Gaming Factory, an online gaming company with an office in West Palm Beach, Fla.
The SEC's lawsuit alleges that The Gaming Factory used lies, exaggerations and high-pressure sales tactics to convince investors to sink more than $1.9 million into the company. The agency's case alleges that the company, which was registered in Panama and listed its headquarters in Costa Rica, lied to investors by creating a false sense of urgency, telling them that only a small number of shares were available.
The SEC also alleges that The Gaming Factory exaggerated its profits, saying its gaming site was making a lot of money in July 2001, even though it didn't start taking bets until January of this year.
The SEC's charges result from a sting operation, wherein representatives from The Gaming Factory repeatedly tried to convince an undercover SEC operative to invest in the company.
The SEC is seeking unspecified fines from The Gaming Factory.
Crypto Feels Sports.com's Pain
The placement of Sports.com into administration is leaving CryptoLogic (CRYP) to reexamine its investment in the U.K.-based sports content and online gaming company.
Jean Noelting, CryptoLogic's president and CEO, said he is disappointed in the "rapid deterioration" of Sports.com finances, as well as in its management and investors.
"We are evaluating our business and legal alternatives," Noelting said. "Given the rapid increase in traffic, we are encouraged to see that they will continue to operate and seek a buyer."
Sports.com went live with CryptoLogic's full suite of Java-based casino games in April. CryptoLogic's subsidiary, WagerLogic, invested in Sports.com earlier this year so it could receive a greater share of the online casino's profits and possibly acquire SCG Enterprises Ltd., Sports.com's online gambling arm.
Being put into administration means that a court-appointed administrator is now conducting Sports.com's daily business. He or she will decide if the company is salvageable.
The administrator in charge of Sports.com has indicated that the company will be kept intact and sold, CryptoLogic said in a press release.
Playboy Aims for Operating Profit by Year End
Playboy Enterprises (PLA) could end its three-year period in debt by the end of the year, chairman and CEO Christie Hefner told the Chicago Tribune recently.
"Our goal is to create an operating profit for the company for the year, and if the business performs as our plans are, we will achieve that," she said.
The company, however, has been criticized by analysts for its foray into online gambling. Playboy launched three Internet wagering sites last year.
"Anybody and his mother can get a license to do it, so why should a
customer go to Playboy?" said Robert Routh, a senior analyst with Arnhold and S. Bleichroeder Inc.
Power Leisure Changes Name
Power Leisure (PWL), Ireland's largest bookmaker, is changing its name to match that of its online gambling Web site, Paddy Power.
The change, which went into effect on May 30, will not affect the company's stock symbols.
The name change will "further enhance brand awareness of Paddy Power and provide greater connection between the public company and its core operations," the company said.
ISWI to Buy GIG
Interactive Systems Worldwide Inc. (ISWI) and Global Interactive Gaming (GIG) on Friday signed a letter of intent for ISWI to acquire all of GIG's shares.
As per the terms of the agreement, ISWI will pay $430,000 to Prisma iVentures Ltd., GIG's principle shareholder. It will also issue 60,000 new shares of preferred stock to MultiSports Games Development Inc., a minority shareholder of GIG.
In March, the Kirch Group, which has a controlling interest in GIG, filed for insolvency protection in Germany. The announcement caused concern for ISWI, which is partnering with GIG on an
interactive digital TV deal in the United Kingdom.
ISWI is excited to be able to put an end to the uncertainty of its dealings with GIG, ISWI president Bernard Albanese said.
In addition, ISWI said, GIG will delay the release of its SportXction software. The technology had been scheduled to debut by the beginning of the World Cup. If GIG is unable to launch the software for use during the World Cup, it will likely unveil the software during the Premier League in August.
"The financial difficulties of the Kirch Group, and its effect on GIG, became a distraction to the management of both companies, and have contributed to minor delays in the system rollout," Albanese said. "We are happy that now both companies will be able to focus on the important
tasks of marketing and system deployment."
Camelot Group Annual Results Show Improvement
National Lottery sales improved during the second half of last year, as shown by the unaudited yearend results for Camelot Group.
Lottery ticket sales for the year ending March 31 totaled £4,834 million, three percent below last year's total. However, ticket sales in the second half of the year were on par with last year's records.
Sales of National Lottery Instants increased for the first time since 1995, up 5.9 percent to £579 million. On-line sales amounted to £4,256 million.
In all, the lottery raised a total of £1,342 was for charity and £580 million was given to the government in taxes.
ukbetting Buys TEAMtalk
Internet gambling firm ukbetting's purchase of TEAMtalk, a sports information business, may put TEAMtalk's 140 staff members out of a job.
ukbetting bought TEAMtalk for £13.7 million, or 6 pence per share, on Friday. Earlier last month, TEAMtalk refused an offer from ukbetting for 4.5 pence per share.
Peter Dubens, ukbetting vice chairman, said his company is mainly interested in TEAMtalk's sports content Web site.