Weekly Nambling Notes

17 November 2003
Friday, Nov. 14

Swedish I-Gaming -- Sperospel.se, the first company to obtain a gaming license to operate over the Internet from the Swedish National Gaming Board, has purchased a WinOne Gaming System from Finnish supplier EGET. Initially, Sperospel.se will operate two scratch card games called Femman and Sperolotten and an instant game called Casinolotto which is a variation of Keno. www.sperospel.se opened to the public at the beginning of November.

PartyPoker -- Online multi-player poker site PartyPoker.com has announced it will present the PartyPoker.com Million III on March 14-18. About 500 players will depart on a cruise and participate in a no limit Texas hold 'em tournament for a $3.5 million prize pool and the chance to play in the World Poker Tour Championship. Players can enter for the Million III by qualifying in tournaments on the PartyPoker.com web site. PartyPoker.com has also named Shana Hiatt, the host of the World Poker Tour on the Travel Channel, as its new spokesperson.

Court of Justice Ruling -- The European Court of Justice ruled today that Finnish citizens do not have to pay Finnish income tax on lottery winnings from other EU countries. The Court decided that Finnish law that imposed tax on money from other countries was a violation of free movement of services in the EU. A Finnish woman who had won $118,000 in a Swedish lottery in 1998 brought the case before the court. The ruling also applies to foreign lotteries on the Internet.

Stanley Targets Greece -- "If you are thinking of launching or improving any kind of public or private betting business, the safest bet is to join forces with the winner of the Gambelli case,"-- an advertisement in Greek newspapers on Friday, ran by British betting company Stanley Leisure. The Dow Jones reports that last week Stanley Leisure's managing director, John Whittaker, said that the company was going to launch a media campaign in an effort to expand its business across the EU. Greek company Opap currently has the country's only license to operate gambling operations.

Talks -- According to the Australian Financial Review, Tabcorp might soon begin negotiating with Racing NSW, the organization that represents New South Wales' three racing codes. Tabcorp would need to establish a working relationship with the NSW's racing industry if it were to acquire TAB ltd.

Spam Laws -- Ireland has passed new spam laws in accordance with the EU's Privacy and Electronic Communications Directive. The new legislation regulates spyware, cookies, unsolicited direct marketing by phone, fax, e-mail, and SMS.

Thursday, Nov. 13

Stats -- The Australian Associated Press reported that the racing and gaming industries pumped $4.2 billion into the New South Wales economy in 2001-02, according to research from independent economic consultancy group IER. $2.3 billion came from the Sydney metropolitan area and $1.9 billion came from the surrounding regions of NSW. The industries paid $720 million worth of taxes to the federal and NSW governments. Peter Kadar, TAB's wagering CEO, said TAB has paid about $215 million to the government in just the last 12 months.

TAB War -- The New South Wales Government says it will amend legislation so that TAB Ltd. can merge with either UNiTAB or Tabcorp. A 10 percent shareholding limit will be placed on the new entity, regardless of whom will be TAB's partner. The law that prohibits a company from holding both a totalisator and a casino license is also likely to be changed. Tab shares rose 22 cents (5 percent) on the news to close at $4.10…. Meanwhile, the Dow Jones reports that the Australian Competition and Consumer Commission Chairman Graeme Samuel refuses to comment upon whether Tabcorp's $1.9 billion bid for Tab ltd. is acceptable.

Mobile -- ATE reports that Birmingham-based mobile company Opera Telecom might list on the public stock market. The company, which hopes to obtain £100 million in turnover this year, has nine offices in Europe, the Middle East, the Caribbean, and the U.S. Just last week Opera announced that it had signed a deal with software group Chartwell Technologies to create its GamRock brand of mobile casino gaming. Opera's Managing Director Gary Corbett indicated that a stock market listing is not likely to occur at least until spring. He also noted that merging with another company was also a viable business option.

iTV Lottery -- Richard Flynt, Commercial Director for iTV Gaming at BSkyB, said today at the European I-Gaming Congress and Expo in Barcelona that Camelot, the operator of the UK National Lottery, is preparing to launch an iTV service in early 2004. Customers would then be able to purchase lottery tickets through their television.

Wednesday, Nov. 12

I-gaming Hacked -- The Financial Times reported that in September more than a dozen offshore betting sites serving the US market were hit by distributed denial of service (DDoS) attacks by hackers trying to extort money from unprotected companies. After breaking into a company's network, the attackers would send e-mails to the company demanding payments of up to $40,000 in exchanged for ceasing the attacks. The Times reports that in most cases the companies would rather pay the fine than risk admitting to its customers and the public that its network is vulnerable. Paul Lawrence, a manager for Top Layer, a company that protects against DDoS attacks, said "We have seen these peaks being hit around the world. It does seem to be a trend, where they find a specific type of company - like online gambling - and geography is no barrier to them. They seem to be working their way around the world, picking people off quite happily." Ian Morris of Equip, who has worked with some of the affected sites, told WhatPC? that "In a lot of cases the attacks have taken out well-configured firewalls. Most people in positions of authority believe that, because they've got firewalls, they are protected - bullet-proof if you like. These attacks have shown that this is not the case."

Thailand Gambling -- The Nation, a newspaper in Bangkok, Thailand, reported that the Justice Ministry might legalize all forms of gambling in order to appropriate some of the proceeds toward social developments. Justice Minister Pongthep Thepkanchana, who is chairman of the subcommittee that will update Thailand's anti-corruption law, is inviting concerned parties to help in drafting the new bill next month. The Justice Ministry speculates that legalizing all forms of gambling would eliminate corruption and underground mobsters. According to researcher Dr Sangsit Piriyarangsan's statistics, $452 billion circulated through illegal gambling last year, a figure that is 8 percent of the country's G.N.P. Just last week an official from Thailand's Government Lottery Office said that the office wanted to legalize soccer betting.

Ad Trends -- New Media Zero reports that an increase in the amount of software that blocks pop-up windows is causing a rise in rich-media and interactive forms of advertisements. Greg Paine, Director of interactive marketing strategy at AOL UK, said, "Agencies are using rich media more cleverly. There are more user-initiated ads, like ones that expand on roll-over. They still dominate the page but are under the control of users."

Tuesday, Nov. 11

TAB War -- TAB Ltd., which announced last month that it would merge with UNiTAB, but then received a higher offer from Tabcorp last week, has indicated that it will proceed in its agreement with UNiTAB. TAB released a statement that says, "Having received financial advice from ABN Amro and Macquarie Bank, and legal advice from Freehills, the board has resolved to seek clarification from Tabcorp of the terms of its proposal given that the proposal is highly conditional in nature and is expressed by Tabcorp as incomplete and incapable of binding Tabcorp." The statement concludes, "TAB is continuing to progress the merger proposal with UNiTAB Ltd announced on October 16, 2003." Still undiscouraged, Tabcorp's managing director, Matthew Slatter, says his company will meet with the Australian Competition & Consumer Commission in order to gain permission for a Tabcorp-TAB merger. "We're seeing them next week to present our detailed case," Mr Slatter said. "Our argument will be that we don't believe that this is an issue in a competition sense."

"Comps" Online -- I Gaming Business reports that a web site called PlaySys.com will offer casino gamblers information about what kind of complimentary offerings they can get for playing at particular casinos. PlaySys, which has contracts with many casinos to provide information about freebies and special offers, will receive commissions based on the losses of gamblers who are referred to the casinos through PlaySys. The company has agreements with about 60 casinos across the globe and expects revenues of $15 million in its first year.

Code of Practice -- The interactive Gaming, Gambling, and Betting Association (iGGBA) and GAMCARE, the UK's problem gambling charity, today adopted a Code of Practice for social responsibility issues in remote gambling. After several months of discussion, the two organizations have drafted an eleven point code that addresses issues of customer responsibility and protection, such as age identification, customer and operator mechanisms that encourage responsible gambling, and the obligations of providers for advertising, free play, training, and support. Andrew Tottenham, Chairman of iGGBA, said, "“It has been a pleasure working with GAMCARE and both parties hope that the UK government and Gaming Board will consider this Code as the basis for their future regulations in this area."

Quoteworthy -- "The market is dominated by two or three major players. For instance, horse racing is split at around 80% market share for Betfair, 10% market share for Betdaq and 10% market share for Sporting Options. The other exchanges probably get less than 1% of that particular market.”-- Rob Hartnett, Managing director of Ireland-based betting exchange Betdaq. Speaking at the European I-Gaming Congress and Expo in Barcelona, Hartnett explained that there is currently around a dozen betting exchanges, but because the market cannot sustain so many, there is likely to be a period of consolidation among the exchanges in the near future.

Deal -- E-commerce payment processing and technology company FreeStar Technology Corporation has signed an agreement to provide Sportingbet, with its e-payment processing solutions. FreeStar will supply its Internet payment gateway and its suite of products for secure online transactions. Sportingbet's CEO, Nigel Payne, says FreeStar should help the company reduce processing costs, online chargebacks, and fraud.

Monday, Nov. 10

AngelCiti in Japanese -- Internet casino software provider AngelCiti Entertainment, Inc. has launched an online casino in the Japanese language. AngelCiti, which already provides Chinese language online casino sites in Mandarin and Cantonese, says that targeting the potential $170 billion Japanese gaming market is part of its attempt at capitalizing on a growing online gaming market in Asia.

Deal Completed -- Lottery systems and services company Scientific Games Corporation has completed its acquisition of IGT OnLine Entertainment Systems, Inc. from International Game Technology for $143 million in cash. The new addition raises Scientific Games' pro forma revenue for the year ended June 30, 2003 from $289.6 million to $437.5 million. By sealing the deal, Scientific Games obtains the operation of on-line lottery systems in 15 US states and a few more jurisdictions in the Caribbean. It also receives IGT OnLine's Advanced Gaming System (AGS) video contracts in six jurisdictions throughout the world, an exclusive license for some of IGT's slot brands, and also IGT OnLine's support systems to customers in Korea, Norway, Switzerland and Shanghai.

Poker Room Open -- SkillPoker.com Inc., a subsidiary of LegalPlay Entertainment Inc., will launch an online card room for real money play Thursday, November 13, 2003. Players can participate in single and multilevel poker tournaments in several different formats. LegalPlay says that US consumers can legally use its patent pending and trademarked SkillPoker system since the games rely on skill rather than chance. The company expects to earn revenue through player tournament fees and through licensing its proprietary software.

Vegas7casino -- Vegas7casino, which uses Microgaming Systems' newest Viper Software, is now available in English, Italian, French, and Spanish languages for play with Euros, American dollars, and British pounds. Vegas7casino operates under a license from the Kahnawake Gaming Commission and can be downloaded at www.vegas7casino.com.

Net Entry -- The Michigan Lottery announced that it has completed an online game promotion that allowed players to enter a second chance drawing through a web site and database provided by Scientific Games' subsidiary MDI Entertainment. Michigan Lottery Winfall players who spent at least $3 on games received a bonus coupon for the Days of Thunder sweepstakes, which could be entered through postal mail, through entry drop boxes, and through the Days of Thunder web site that was developed by MDI. Entries were put into weekly drawings for four Ford Thunderbird convertibles. Days of Thunder is believed to be the first promotion to offer an Internet entry option in association with a terminal lottery game.

Blackjack World Series -- The Game Show Network is currently producing a weekly game show called GSN Presents The World Series of Blackjack, which will premiere next spring on national television in the U.S. Each episode of The World Series will feature a table of several different players starting with $10,000, and the player with the most money at the end of the show advances to the final episode to compete against all the other winners. Each show will include expert commentary and insight as well as player interviews about strategies and opponents.