Nambling Notes | July 9, 2008

9 July 2008

PERFECT STORM Warwick Bartlett, the lead partner of Global Betting and Gaming Consultants, said the economic hurdles facing land-based gambling operators have created "a perfect storm of business opportunity for the online sector."

Speaking at the Gaming Executive Summit in Madrid Wednesday, Mr. Bartlett suggested that growth in the land-based industry, still on the up, will ease off while online growth is likely to continue.

Mr. Bartlett, whose consultancy monitors the terrestrial and online gambling industries, highlighted online bingo in particular, which has grown at the expense of its land-based cousin.

In the United Kingdom, he said the bingo industry has struggled beneath the weight of smoking bans.

"As land-based Bingo suffers, online surges," Mr. Bartlett wrote in his presentation notes. "We believe online bingo will continue to grow strongly as players move from the bingo halls to their living rooms."

For the online industry in general, he suggested higher energy costs have negatively impacted the land-based business, as well as its customers, who have elected to cut costs by staying at home.

Broadband, he said, also creates greater access to services at cheaper prices across the world.

On stock prices, Mr. Bartlett reasoned: "Given this perfect storm of circumstances, there is no doubt that internet stocks would be trading at levels significantly higher than they are today were it not for the arrests and legal problems faced by some of the operators."

FLOAT IS ON Winnie Ho Yuen-ki has lost her bid to block the initial public offering of Sociedade de Jogos de Macau Holdings Ltd., a casino company part-owned by her estranged brother, Stanley Ho Hung-sun.

Ms. Ho filed a last-minute application in Hong Kong's Court of First Instance to stop the $500 million I.P.O., claiming it is, one, illegal, and two, contrary to the policy of the Hong Kong government, which prohibits the promotion of gambling.

Judge Anselmo Reyes, however, on Wednesday disagreed with Ms. Ho's argument.

"To put it starkly, if persons outside Hong Kong wish foolishly to lose money by gambling outside Hong Kong and thereby generate sizeable profits for a company, why should people in Hong Kong not be entitled to share in that company's profits from the foolishness of others?" Judge Reyes decreed in court documents.

Meanwhile, Mr. Ho said on Wednesday that the I.P.O., originally scheduled for Thursday, has been postponed to July 16.

Ms. Ho said on Tuesday that she would appeal a decision that was not in her favor.

Chris Krafcik is the editor of IGamingNews. He lives in St. Louis, Mo.