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Politics of US gambling makes for odd bedfellows
By Edward Alden in Washington
Published: May 26 2006 22:36 | Last updated: May 26 2006 22:36
Financial Times

Of the 50 states in the US, in only two – Utah and Hawaii – is it impossible to find a place to gamble legally.

Casinos dot America’s landscape, from the neon palaces of Las Vegas to some 400 more modest facilities on Indian reservations. In 2004, Americans paid more than 300m visits to them – nearly twice the figure of just five years previously.

And that figure takes no account of the public’s enthusiasm for the government-sponsored lotteries in every state, or gambling on sporting events.

Despite the extraordinary popularity of legal gambling, for the past decade a determined band of Republican conservatives has tried to ban Americans from participating in the fastest-growing segment of the market – online gambling.

The House judiciary committee on Thursday approved legislation that would in effect outlaw most forms of internet gambling by barring US banks from processing financial transactions involving online gaming. It was the latest in an effort dating back to 1995, when the first online gambling site was launched. So far it has come up short, but that has failed to deter its supporters. The legislation is likely to be passed by the House of Representatives next month, though so far there is no movement on a companion Senate bill and the prospects for approval this year appear slim.

But with US gamblers estimated to account for about half of the roughly $12bn (€9.4bn) global internet gaming market, and that market expected to double by 2010, the congressional efforts are still being watched closely around the world.

According to the Justice Department’s interpretation, Americans are already barred from gambling online by a 1961 law that prohibits betting over telephone lines. But prosecutions under the law have been rare, and the courts have been divided over the whether the 1961 law applies to the internet. The proposed congressional legislation would make this clear by barring US banks from processing financial transactions related to most forms of online gambling.

The issue has thrown up odd coalitions in Washington. Most of the push has come from a variety of Christian conservative groups. They are opposed to all forms of gambling but in particular they are concerned that it has come right into American homes through computers, where it may be easily accessible to children.

Robert Goodlatte, the Republican author of the latest legislation, says online gambling sites, which operate from the Caribbean and other offshore locations, “suck billions of dollars per year out of the US economy, serve as a vehicle for money laundering, undermine families and threaten the ability of states to enact and enforce their own laws”.

The bill has also received support from powerful interests that want to avoid being tainted by gambling, including professional and university sports associations and the big banks.

But their opponents are wealthy and determined. A new cadre of millionaire poker players, made famous by the World Series of Poker and other televised poker games, formed a coalition this year to fight the legislation.

Michael Bolcerek, president of the Poker Players Alliance, calls the opponents of internet gambling “the morality police”, saying that the business has matured and is regulating itself to avoid abuses such as gambling by minors. The PPA, and the online gambling industry, is pushing instead for laws that would legalise and regulate the business. “They’ve passed legislation in the UK to regulate gambling, and we should take a cue from the British,” says Mr Bolcerek.

Huge casino companies such as MGM Mirage and Harrah’s have recently backed that stance. While the American Gaming Association, which represents the big casinos, has remained technically neutral on the House bill, it favours launching a study that would examine whether legalisation and regulation of online gambling in the US would curb abuses and generate new tax revenues.

Opponents of the bill are optimistic that they can again defeat it, as they have every effort over the past decade.

But there is one wild card: Jack Abramoff.

Among the many sordid accomplishments of the Republican super-lobbyist, who in January pleaded guilty to conspiracy, fraud and tax evasion in relation to a broad influence-peddling scheme, was his key role in blocking similar gambling legislation in 2000. On behalf of a client, eLottery, which wanted to sell lottery tickets online, he recruited the top aide to former Republican leader Tom DeLay and others to help quash the bill.

Supporters of the bill are hoping that the revulsion over Mr Abramoff’s illegal gifts to lawmakers and aides will help trigger a backlash that could see the gambling bill finally win passage. But Mr Bolcerek of the Poker Players Alliance says that would be an ironic outcome: among the many carve-outs in the legislation, it would permit online betting on state lotteries, exactly the exemption the lobbyist’s client was seeking. “This isn’t an anti-Abramoff bill at all,” he says.

The $3.6bn casino complex, which will include convention and performance halls, shopping malls, a museum and a 2,500-room luxury hotel, is the centrepiece of plans to create a business and entertainment district around the city-state’s Marina Bay.

THE TWO-HANDED PROTAGONIST

FRANK FAHRENKOPF

Frank Fahrenkopf, president and chief executive of the American Gaming Association, is regarded as one of the best connected and most effective Republican lobbyists in Washington. He served as chairman of the Republican party for six of the eight years when Ronald Reagan was president, making him the second-longest serving chairman in the party’s history. A Nevada native, Mr Fahrenkopf has represented the big casino companies such as MGM and Harrah’s since 1995, overseeing the fastest expansion of casino gambling in US history. According to the National Journal, he was paid $1.25m (£674,000) in compensation by the AGA last year, making him the 23rd highest paid lobbyist in Washington

JAMES DOBSON

James Dobson, chairman and founder of Focus on the Family, is among the prominent Christian conservatives backing efforts to ban Americans from online gambling. The group says that legalised gambling has fed a rise in divorce, suicide, bankruptcy, child abuse and domestic violence. While most Christian conservative groups still support the Goodlatte bill, many have been annoyed by the broad carve-outs

Financial Times

Saturday, May 27, 2006
Seattle Post-Intelligence
By SAM SKOLNIK AND VANESSA HO
P-I REPORTERS

Beginning next month, Washington residents who play poker or make other types of wagers on the Internet will be committing a Class C felony, equivalent under the law to possessing child pornography, threatening the governor or torturing an animal.

Although the head of the state Gambling Commission says it is unlikely that individual online gamblers will be targeted for arrest, the new law carries stiff penalties: as much as five years in prison and a $10,000 fine.

The new law, which takes effect June 7, passed the Legislature this year without much public attention. But word has begun to spread among gamblers online and in old-fashioned “brick-and-mortar” card rooms, and the players aren’t pleased.

“To say playing poker in card rooms is legal but that it’s a felony to play online is insane,” said Kerry Welsh, 47, of Bellevue.

Welsh is considering taking a wireless computer outside the state Capitol when the law takes effect and playing Internet poker as a protest until he’s arrested.

Nobody knows for sure how many Washingtonians gamble online, but the practice is huge and growing, fueled by the popularity of Texas Hold ‘em in televised tournaments and multimillion-dollar events such as the World Series of Poker.

In 2005, revenue from online poker sites was estimated at between $1.5 billion and $2.6 billion in the United States, according to various gambling publications.

The Justice Department believes Internet gambling is prohibited under several federal laws, including the Federal Wire Act.

As a result, most of the big, popular gambling sites are operated outside the United States and aren’t directly regulated by the U.S. or state governments.

The Washington law, which upgrades online gambling from a misdemeanor, was an effort to be compatible with federal law, said state Sen. Margarita Prentice, D-Renton.

The law applies to all online gambling.

Gambling Commission Director Rick Day and Prentice, who sponsored the legislation, said the law is necessary, partly to protect the gamblers themselves.

Online poker games invite organized crime and money laundering, they said, and it’s easier for dishonest players to collude against unsuspecting opponents. And when online gambling operators refuse to pay winners their proceeds, some gamblers have said there is little recourse.

It’s also as addictive as other forms of gambling, they add, and more accessible to minors.

Day said the intent of the new law is not to give agents greater incentive to track online gamblers and throw them in prison. Jailing small-time online gamblers is “not the focus of our work,” he said.

But he confirmed that commission agents had gone to the homes of several state gamblers (fewer than half a dozen, he said) about a year ago to warn them that such activity was illegal. No one was arrested.

In fact, no one has ever been prosecuted in Washington — or anywhere nationally, according to gambling publications — strictly for gambling online.

Day said his priorities are to go after national and international promoters or operators based in Washington state — and increasingly, to warn gamblers about the risks and illegality of the activity.

Prentice said the measure had the backing of the state Attorney General’s Office and the gambling commission. Lobbyists from the card room industry and tribal casinos were almost entirely absent from the effort, she said, even though they stand to benefit from the new law.

The bill passed unanimously in the Senate and with just five dissenting votes in the House. It was signed into law by Gov. Christine Gregoire on March 28.

Criticism of the new law, some of it targeting Prentice, has appeared on various blogs and gambling news Web sites. Much of it centers on the argument that online gamblers have the right to gamble if they choose.

Those concerns were echoed by poker players at several card rooms around Seattle this week.

“What, is Homeland Security going to get involved in this one?” said poker player Wyatt Wettland, 25, during a break at Goldie’s Shoreline Casino on Aurora Avenue North. He said he plays online every other day, for two to three hours at a time.

A gas station manager, Wettland said he plays online for free, but wants to start playing for money to try to win one of the large jackpots, which are often thousands of dollars. But he had to wait for his credit-card debt to go down.

Up the street at the Drift On Inn Roadhouse Casino, a man who offered only a first name, Nick, was about to join his first card-room game after playing countless games online. He said the online games have helped him learn the game.

“A felony? That’s harsh,” he said of the new law. “I think as long as you’re 18, you should be able to gamble.”

Free or “play money” online poker games are legal, and will not be affected by the new law. But some in the state play poker online for large amounts of money, and a few are even trying to make a career out of it.

Another player, 25-year-old Jeremy, said he’ll disregard the new law. “I don’t care, I’ll still play,” he said.

With a degree in wireless communications, Jeremy said he used to work in tech support. But poker is his full-time job now. He figured he spent 20 hours a week playing online and another 20 hours in card rooms. Once a month, he heads to Las Vegas. He is never far from a computer, which sometimes has three games going on at once.

“Everyone plays poker online. People play poker on TV and celebrities endorse it. It seems like it’ll be tough to crack down,” he said.

He said he has parlayed $1,000 into $13,000 and often wins jackpots of $4,000 to $5,000. Other times, he quits after losing $3,000. But most of the time, he’s ahead, he said.

“Poker players don’t consider it gambling,” he said. “When you win consistently, there’s actual skill in it.”

Place your bet from a phone
the INQUIRER
By Tony Dennis: Saturday 27 May 2006, 16:31
FRESH LEGISLATION aimed at preventing online gambling in the USA may entice mobile network operators into the gambling sector. Particularly if MVNOs move in to take advantage.

A bill sponsored by Republican, Robert Goodlatte, aims to make it illegal for US banks to process financial transactions involving online gambling. He raised the old chestnut of gambling undermining families to justify it.

A bit rich when the nation’s fastest growing city is Las Vegas. What exactly does he think families go there for? The rides?

Anyway, it’s pretty easy to raise a betting stake by using reverse SMS billing. The INQ was previously assured that reverse SMS billing can’t be used to pay for pornography in the USA. However, that wasn’t a law – merely a decision taken by the mobile operators themselves.

So there’s a prospect that an MVNO could set itself up to offer SIM cards which could then be used to pay for stakes on online PC sites or on mobile sites.

Somewhat ironically, the handset accessible casino which the INQ has fully tested – Wild Jack Mobile Casino – uses a casino owned by Native Americans to handle its bets.

By William Roberts Bloomberg News
Click here for MARKETPLACE BY BLOOMBERG
MONDAY, MAY 22, 2006

WASHINGTON MGM Mirage, Harrah’s Entertainment and other U.S. casino operators are increasing pressure on Congress to consider legalizing online gambling - at the same time that lawmakers are seeking to tighten criminal penalties for it.

The companies are trying to take advantage of a congressional backlash against gambling set off by the Jack Abramoff scandal, involving his lobbying on behalf of Indian casinos. The casinos say the best way to control the $12 billion Internet betting business - which is based overseas while drawing more than half its revenue from America - is to legalize, regulate and tax it.

“The argument the industry is making is, if it is being done offshore, why not bring it in to the U.S. so it can be regulated?” said Senator John Ensign, a Nevada Republican who has discussed the issue with representatives of Harrah’s, which is based in Las Vegas and is the world’s largest casino owner. “It doesn’t look like you can ban it.”

The companies, which according to Federal Election Commission records have so far contributed more than $900,000 to congressional candidates in this fall’s elections, are pushing lawmakers to take a first step toward legalization by creating a commission to study it. Ensign and the Senate minority leader, Harry Reid, a Nevada Democrat, said the proposal has a chance of clearing the Senate this year.

Lawmakers have become wary of gambling issues since an investigation of Abramoff uncovered a web of connections between some of them and casinos. Abramoff pleaded guilty in January to fraud and conspiring to corrupt public officials on behalf of clients, including Indian-tribe casino operators and eLottery, a Stamford, Connecticut-based online broker of state lottery tickets.

Following Abramoff’s guilty plea, two Virginia representatives, Bob Goodlatte, a Republican, and Rick Boucher, a Democrat, introduced legislation to force U.S. financial institutions to cooperate with law-enforcement authorities in shutting down the flow of cash to illegal gambling sites based outside the United States.

The Judiciary Committee of the House of Representatives is scheduled to take up the measure, which has the backing of the Bush administration, on Wednesday, and the majority leader, John Boehner, Republican of Ohio, said he intended to bring it to a floor vote later this year. Abramoff in 2000 lobbied to defeat a similar measure.

Even if the measure passes the House, it would face long odds in the Senate, said Matthew Gerard, a gaming industry analyst at Investec Securities in London. “Ultimately, we think it will be very, very difficult to get any prohibitive legislation through the Senate,” he said.

U.S. casino companies are “neutral” on the House measure, said Frank Fahrenkopf Jr., chief executive of the American Gaming Association, which represents Harrah’s and MGM Mirage, the No.2 gambling company. Right now, the online gambling industry “is just the wild, wild West,” he said. “Why not take a hard look at it?”

That’s what the U.S casinos are seeking with their proposal for a U.S. study. Fahrenkopf, a former Republican Party chairman, said the study’s purpose would be to determine if legalization, regulation and taxation of online gambling would reduce the risk of fraud and abuse and increase government revenue.

Fahrenkopf said the “big boys” like MGM and Harrah’s wanted to get into the online gaming business if Congress eventually decided to legalize it. MGM and Harrah’s declined requests for comment and referred questions to him.

The gambling association projects that the global online betting business will double to about $24 billion a year in revenue by 2010. The association said a study it conducted showed that as many as 15 million American players logged on to more than 2,600 Web sites last year; it said it also found that 81 percent of Americans were unaware of the 1961 law making it illegal to use phone lines for wagers.

The U.S. Justice Department continues to investigate and prosecute online casinos that accept funds from U.S. customers. On May 17, prosecutors in Washington announced money-laundering charges against two people, including an American, who operated an Internet betting parlor in Antigua that received $250 million in bets on professional football, baseball, hockey and college basketball from U.S. gamblers. Antigua has filed a complaint with the World Trade Organization against the U.S. ban on online gambling.

With U.S. companies shut out of the online market, the principal beneficiaries are European companies and investors and unregulated online casinos in the Caribbean.

Britain legalized online gambling a year ago. Since then, two companies based in the British territory of Gibraltar - PartyGaming and 888 Holdings - have sold shares to the public.

John Shepherd, a spokesman for PartyGaming in London, said the company “advocates regulation” of online gambling and backs the proposed U.S. study. British law recognizes “that the only difference between gambling in a casino and gambling online is the word ‘Internet,’” he said.

In addition to making campaign contributions, the U.S. casino operators have retained some of Washington’s top lobbying firms to promote their issues.

Gambling has long been a politically sensitive issue, and online betting draws opposition from evangelical Christians, an important Republican constituency. Focus on the Family and the Traditional Values Coalition, two religious-advocacy groups, have come out in favor of the House legislation stiffening penalties.

In the Senate, meanwhile, Reid - a former member of the Nevada Gaming Commission who said he opposes legalization - is willing to go along with the companies’ plan for a commission to look at the issue.

Click here for MARKETPLACE BY BLOOMBERG

How cool is this! Friday, May 26th PokerShare.com gave away over 8 thousand gallons of gasoline to hundreds of people in New York! The line to get gas stretched for over 10 blocks, even blocking traffic on the Brooklyn Bridge.

PokerShare employees joined the gas station employees at 6 AM at the Westside Highway gas station, where they began pumping full tanks (up to 40 gallons) of free unleaded gasoline per customer, with PokerShare picking up the tab! PokerShare said their goal was to help the people of New York have an enjoyable Memorial Day Weekend without having to worry about the current price of gasoline at the pumps.

The event was covered by local TV and Radio programs; the PokerShare team consisted of the PokerShare Pump Girls, who were very busy filling tanks of hundreds of happy New Yorkers. The event did cause just a little traffic congestion, with cars backed up all during rush hour so NYPD was obliged to request the free give-away come to a halt.

People came from all over, some as far as New Jersey to take advantage of PokerShare’s generousity. The Free Gas Giveaway was scheduled to last for 5 hours, but was shut down sooner than planned due to traffic congestion. They’re already making plans for the next city to benefit from their generosity. Maybe it will be at a pump near you!

All over the globe, there are approximately 6000 people who have one thing in common. They’re all Microgaming progressive jackpot winners, taking home a piece of the more than $200,000,000 progressive jackpot amount Microgaming has paid out in the last three years. Some have won more than others, but overall, it averages out to $18,000 paid out daily since the launch of Microgaming progressive games.

Way to go, Microgaming! $300,000,000 is just around the corner!

Antigua Sun
Monday May 22 2006

Last week we were made aware of the latest move of the United States in their continued battle against the implementation of the ruling of the World Trade Organisation in relation to cross border trading in services, particularly Internet gaming, in favour of Antigua & Barbuda.

The US Department of Justice, after examining all the offshore betting companies that have been targeting US citizens and enticing them to participate in online gambling, zoomed in on perhaps the largest operator in the only country who successfully challenged the unfair trade practice, as it relates to the protectionist policies on the gambling industry.

In an era of globalisation and trade liberalisation when the watchwords are regional integration, single markets, economic blocs; and where small island states have been forced to eliminate protective barriers for vital components of their local economies in pursuit of global economic unity, one has to wonder who really benefits from integration and the coming together of economic interests into a single market.

In the interest of the growth of international trade, small island states in the Caribbean have seen their preferential trade arrangements eliminated, causing dramatic upsurge in unemployment and other economic ills.

Still in the interest of the “international good” regions like the OCES acquiesce to big stick policies like the Shiprider Agreement which gives the US the right to traverse into our boundaries without any degree of reciprocity.

In defence of our economic survival, which is hinged to a large measure on international travel, we expend significant scarce resources to provide tighter security measures, in conformity with more stringent requirements from the US in particular.

As small, open, vulnerable economies in a competitive global arena, the challenge exists to find industries which harness the country’s resources to the benefit of its citizens.

The economic realities of islands like Antigua & Barbuda, is the need for a diversified economic base, given its very limited natural opportunities. To complement the lifeblood of the economy – tourism – the offshore services were identified as a sector which enabled a merger between foreign investment and the countries most abundant resource, its people.

The offshore sector in Antigua & Barbuda has come in for high praises from the international community for its regulatory framework and the independent initiatives undertaken to ensure that the jurisdiction maintains the highest desirable standards.

While there are no official estimates with regards to the contribution of the offshore sector to the economy, the figures indicate that offshore gaming, alone, contributes in excess of EC$250 million annually to the local economy, with additional indirect spin-offs in excess of EC$200 million.

Within the context of the above, the actions of the US Department of Justice as outlined in the summary of the charges laid against the principals of WWTS, must be viewed from three perspectives.

Firstly, there has been no settlement between the US and Antigua & Barbuda with respect to implementation of the WTO ruling. As such, moves by the US to pursue this matter appears as a flagrant disregard for the leading international trade arbitration panel.

This is a curious move on behalf of the US who has taken many trade issues before the said body and has pushed for the enforcement of the ruling, when the decisions have been to their economic benefit.

Secondly, is the signal that is being sent by this indictment to other entities in the offshore gaming industry of Antigua & Barbuda.

As far as we are aware, the US Department of Justice is in pursuit of one entity for violating federal law by “illegally enticing gamblers to send funds from the United States to Antigua with the intent that these funds would be used for wagers on Internet casino games and sporting events.”

But, there are a plethora of such companies in many countries across the globe engaged in similar activities prior to the start up of operations in Antigua & Barbuda. Who is the real target of the US? Is it the principals of WWTS or is it the offshore gaming industry of Antigua & Barbuda?

What is really at stake in this unresolved dispute? Little Antigua & Barbuda successfully challenged the great US on a matter that really is about who benefits from the consumer expenditure. Gambling is big business in the US, and online gambling is widespread.

There are many regions in the US where the dominant economic activity is gambling. We can recall the catastrophic losses in the French Quarter during the 2005 hurricane season, including the loss of a major gambling belt in the US, the loss of jobs and associated economic activity was sizeable.

Utilise any major search engine and check for US online casinos and the results would be startling. Logic would suggest that the issue is not the fact that there are social consequences of gambling.

Gambling in the US means that the government is able to collect sizeable revenues from taxes on winnings and from taxes on the profits of the corporations providing the activity.

There are also the issues of job creation, and the spin-off positive impact on other sectors that support the gaming industry. Also taken into account, is the spending of those directly engaged in the industry.

Any resolution of this dispute in Antigua & Barbuda’s favour means that the US would face direct competition from the rest of the world for the profits, taxes and other economic benefits from the anticipated expansion of the industry.

Therefore, typical of US self preservationist fashion, it is seeking to protect its own interest regardless of the impact on friendly countries like Antigua & Barbuda.

In pursuance of economic preservation, the US continues to protect and subsidise industries such as agriculture. In its own self-interest it continues to wield its big stick, big brother policy.

Whenever the US appears to succumb to international pressure, the major beneficiaries have always been multi-national corporations originating from the US.

Case in point, the hue and cry over ‘exporting America’ has arisen because American companies are seeking to maximise profits by taking advantage of cheaper factors of production available in third world countries and China.

Any action which threatens the capacity of a country to protect the constitutional rights of its citizens should be taken very seriously.

The international arbitration panel which is a part of the system of governance at the WTO ruled that the US needed to adjust its regulations governing cross border gaming in a similar vein as rulings governing other trade disputes.

When other disputes ruling have been to the benefit of industrialised countries, smaller and more economically challenged countries have had to fall in line.

This one case could signal the death of a very vibrant sector for Antigua & Barbuda. If the US has other reasons to pursue the principals of WWTS it is only just and fair that they do so.

But this apparent move to curtail the free movement of services demands a broad base action, if only to remove any notion that free trade and the pursuance of single economic bloc and free markets are really not free nor fair.

May 22 (Bloomberg) — MGM Mirage, Harrah’s Entertainment Inc. and other U.S. casino operators are increasing pressure on Congress to consider legalizing online gambling — at the same time lawmakers are seeking to tighten criminal penalties for it.

The companies are trying to take advantage of a congressional backlash against gambling triggered by the Jack Abramoff scandal, involving his lobbying on behalf of Indian casinos. The casinos say the best way to control the $12 billion Internet betting business — which is based overseas while drawing more than half its revenue from the U.S — is to legalize, regulate and tax it.

“The argument the industry is making is, if it is being done offshore, why not bring it in to the U.S. so it can be regulated?” says Senator John Ensign, a Nevada Republican who has discussed the issue with representatives of Las Vegas-based Harrah’s, the world’s largest casino owner. “It doesn’t look like you can ban it.”

The companies, which according to Federal Election Commission records have so far contributed more than $900,000 to congressional candidates in this fall’s elections, are pushing lawmakers to take a first step toward legalization by creating a federal commission to study it. Ensign and Senate Minority Leader Harry Reid, a Nevada Democrat, say the proposal has a chance of clearing the Senate this year.

Lawmakers have become wary of gambling issues since a federal investigation of Abramoff uncovered a web of connections between some of them and casinos. Abramoff pleaded guilty in January to fraud and conspiring to corrupt public officials on behalf of clients, including Indian-tribe casino operators and eLottery Inc., a Stamford, Connecticut-based online broker of state lottery tickets.

House Legislation

Following Abramoff’s guilty plea, two Virginia representatives, Republican Bob Goodlatte and Democrat Rick Boucher, introduced legislation to force U.S. financial institutions to cooperate with federal law-enforcement authorities in shutting down the flow of cash to illegal gambling sites based outside the U.S.

The House Judiciary Committee is scheduled to take up the measure, which has the backing of the Bush administration, on May 24, and Majority Leader John Boehner says he intends to bring it to a floor vote later this year. Abramoff in 2000 lobbied to defeat a similar measure.

Even if the measure passes the House, it would face long odds in the Senate, says Matthew Gerard, a gaming industry analyst at Investec Securities in London. “Ultimately, we think it will be very, very difficult to get any prohibitive legislation through the Senate,” he says.

`Neutral’

U.S. casino companies are “neutral” on the House measure, says Frank Fahrenkopf, chief Washington lobbyist for the American Gaming Association, which represents Harrah’s and Las Vegas-based MGM Mirage, the second-largest gaming company. Right now, the online gambling industry “is just the wild, wild West,” he says. “Why not take a hard look at it?”

That’s what the U.S casinos are seeking with their proposal for a federal study. Fahrenkopf, a former Republican national chairman, says the study’s purpose would be to determine if legalization, regulation and taxation of online gambling would reduce the risk of fraud and abuse and increase government revenue.

Fahrenkopf says the “big boys” like MGM and Harrah’s want to get into the online gaming business if Congress eventually decides to legalize it. MGM and Harrah’s declined requests for comment and referred questions to him.

15 Million Americans

The gaming association projects that the online betting business will double to about $24 billion a year in global revenue by 2010. The association says a study it conducted showed that as many as 15 million American players logged on to more than 2,600 Web sites last year; it said it also found that 81 percent of Americans are unaware of the 1961 law making it illegal to use phone lines for wagers.

The Justice Department continues to investigate and prosecute online casinos that accept funds from U.S. customers. On May 17, prosecutors in Washington announced money-laundering charges against two people, including an American, who operated an Internet betting parlor in Antigua that received $250 million in bets on professional football, baseball, hockey and college basketball from U.S. gamblers. Antigua has filed a complaint with the World Trade Organization against the U.S. ban on online gambling.

With U.S. companies shut out of the online market, the principal beneficiaries are European companies and investors and unregulated online casinos in the Caribbean.

U.K. Legalization

The U.K. legalized online gaming a year ago. Since then, two companies based in the British territory of Gibraltar — PartyGaming PLC and 888 Holdings PLC — have sold shares to the public: Partygaming, whose 2005 revenues of $977 million rose 62 percent from a year earlier, raised $1.9 billion, while 888 Holdings, with 2005 revenues of $271 million, raised $261 million.

John Shepherd, a spokesman for PartyGaming in London, says the company “advocates regulation” of online gambling and backs the proposed U.S. study. U.K. law recognizes “that the only difference between gambling in a casino and gambling online is the word `Internet,”’ he says. “The British model is going to be a model for the whole globe.”

In addition to making campaign contributions, the U.S. casino operators have retained some of Washington’s top lobbying firms, including Patton Boggs LLP and Barbour Griffith & Rogers LLC, to promote their issues. Gambling has long been a politically sensitive issue on Capitol Hill, and online betting draws opposition from evangelical Christians, an important Republican constituency. Focus on the Family and the Traditional Values Coalition, two religious-activist groups, have come out in favor of the House legislation stiffening penalties.

In the Senate, meanwhile, even Reid — a former member of the Nevada Gaming Commission who says he opposes legalization — is willing to go along with the companies’ plan for a commission to look at the issue.

“If somebody wants to study it, they can study it,” he says.

To contact the reporter on this story: William Roberts at

wroberts@bloomberg.net.

Link to Article

23-05-06
May 23, 2006 (London, UK) – BingoTek has become the online gaming industry’s latest major arrival and will power free online bingo on River Belle (www.riverbelle.com), one of the world’s largest and most respected online casinos, powered by Microgaming software (www.microgaming.com).

River Belle’s free bingo game will be utilized as a lead generation programme for their online casino games, paving the way for pay-to-play bingo and upcoming slots additions that will be launched from the pay-to-play games.

River Belle plans to add these additional bingo games to its portfolio in the coming months, while its marketing agency, ForwardSlash, will be rolling out bingo games licensed from BingoTek to their other online casinos.

One of the BingoTek founders and chief consultants Graeme Levin, former founder and operator of the successful gaming portal Gambling.com, is now firmly focused on the new and rapidly growing online bingo market. “We aim to propel the traditional gaming experience to a brand new level with a proposition that will please and delight novice and experienced gamers alike”, Graeme says.

BingoTek’s first licensee, Bingodrome, has proved extremely successful. The popular site has consolidated its position as the best bingo game online by picking up one of the online bingo industry’s most prestigious awards, the coveted “Best Of Breed” award for April 2006 from BingoAwards (www.bingoawards.com), solidifying the site’s status as a firm player favourite.

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To take River Belle’s free bingo for a spin, visit: freebingo.riverbelle.com.

ENDS

About BingoTek

BingoTek is a privately owned holding company located in the British Virginia Isles. The ultimate Bingo software offers unique solutions that cater for all online Bingo requirements.

About Microgaming

Established in 1994, Microgaming is a leading supplier of online gaming solutions. Microgaming’s mission is to develop software and management systems that allow their operators to manage reliable, credible and profitable online gaming enterprises and to champion the interests of the player through fair play, transparency initiatives and the promotion of responsible gaming. Microgaming is a founding member of eCOGRA (e-Commerce and Online Gaming Regulation and Assurance). For more information, go to www.microgaming.com.

For further information about this story, please contact:

Graeme Levin

BingoTek

graeme@bingotek.com

May 22 (Bloomberg) — MGM Mirage, Harrah’s Entertainment Inc. and other U.S. casino operators are increasing pressure on Congress to consider legalizing online gambling — at the same time lawmakers are seeking to tighten criminal penalties for it.

The companies are trying to take advantage of a congressional backlash against gambling triggered by the Jack Abramoff scandal, involving his lobbying on behalf of Indian casinos. The casinos say the best way to control the $12 billion Internet betting business — which is based overseas while drawing more than half its revenue from the U.S — is to legalize, regulate and tax it.

“The argument the industry is making is, if it is being done offshore, why not bring it in to the U.S. so it can be regulated?” says Senator John Ensign, a Nevada Republican who has discussed the issue with representatives of Las Vegas-based Harrah’s, the world’s largest casino owner. “It doesn’t look like you can ban it.”

The companies, which according to Federal Election Commission records have so far contributed more than $900,000 to congressional candidates in this fall’s elections, are pushing lawmakers to take a first step toward legalization by creating a federal commission to study it. Ensign and Senate Minority Leader Harry Reid, a Nevada Democrat, say the proposal has a chance of clearing the Senate this year.

Lawmakers have become wary of gambling issues since a federal investigation of Abramoff uncovered a web of connections between some of them and casinos. Abramoff pleaded guilty in January to fraud and conspiring to corrupt public officials on behalf of clients, including Indian-tribe casino operators and eLottery Inc., a Stamford, Connecticut-based online broker of state lottery tickets.

House Legislation

Following Abramoff’s guilty plea, two Virginia representatives, Republican Bob Goodlatte and Democrat Rick Boucher, introduced legislation to force U.S. financial institutions to cooperate with federal law-enforcement authorities in shutting down the flow of cash to illegal gambling sites based outside the U.S.

The House Judiciary Committee is scheduled to take up the measure, which has the backing of the Bush administration, on May 24, and Majority Leader John Boehner says he intends to bring it to a floor vote later this year. Abramoff in 2000 lobbied to defeat a similar measure.

Even if the measure passes the House, it would face long odds in the Senate, says Matthew Gerard, a gaming industry analyst at Investec Securities in London. “Ultimately, we think it will be very, very difficult to get any prohibitive legislation through the Senate,” he says.

`Neutral’

U.S. casino companies are “neutral” on the House measure, says Frank Fahrenkopf, chief Washington lobbyist for the American Gaming Association, which represents Harrah’s and Las Vegas-based MGM Mirage, the second-largest gaming company. Right now, the online gambling industry “is just the wild, wild West,” he says. “Why not take a hard look at it?”

That’s what the U.S casinos are seeking with their proposal for a federal study. Fahrenkopf, a former Republican national chairman, says the study’s purpose would be to determine if legalization, regulation and taxation of online gambling would reduce the risk of fraud and abuse and increase government revenue.

Fahrenkopf says the “big boys” like MGM and Harrah’s want to get into the online gaming business if Congress eventually decides to legalize it. MGM and Harrah’s declined requests for comment and referred questions to him.

15 Million Americans

The gaming association projects that the online betting business will double to about $24 billion a year in global revenue by 2010. The association says a study it conducted showed that as many as 15 million American players logged on to more than 2,600 Web sites last year; it said it also found that 81 percent of Americans are unaware of the 1961 law making it illegal to use phone lines for wagers.

The Justice Department continues to investigate and prosecute online casinos that accept funds from U.S. customers. On May 17, prosecutors in Washington announced money-laundering charges against two people, including an American, who operated an Internet betting parlor in Antigua that received $250 million in bets on professional football, baseball, hockey and college basketball from U.S. gamblers. Antigua has filed a complaint with the World Trade Organization against the U.S. ban on online gambling.

With U.S. companies shut out of the online market, the principal beneficiaries are European companies and investors and unregulated online casinos in the Caribbean.

U.K. Legalization

The U.K. legalized online gaming a year ago. Since then, two companies based in the British territory of Gibraltar — PartyGaming PLC and 888 Holdings PLC — have sold shares to the public: Partygaming, whose 2005 revenues of $977 million rose 62 percent from a year earlier, raised $1.9 billion, while 888 Holdings, with 2005 revenues of $271 million, raised $261 million.

John Shepherd, a spokesman for PartyGaming in London, says the company “advocates regulation” of online gambling and backs the proposed U.S. study. U.K. law recognizes “that the only difference between gambling in a casino and gambling online is the word `Internet,”’ he says. “The British model is going to be a model for the whole globe.”

In addition to making campaign contributions, the U.S. casino operators have retained some of Washington’s top lobbying firms, including Patton Boggs LLP and Barbour Griffith & Rogers LLC, to promote their issues. Gambling has long been a politically sensitive issue on Capitol Hill, and online betting draws opposition from evangelical Christians, an important Republican constituency. Focus on the Family and the Traditional Values Coalition, two religious-activist groups, have come out in favor of the House legislation stiffening penalties.

In the Senate, meanwhile, even Reid — a former member of the Nevada Gaming Commission who says he opposes legalization — is willing to go along with the companies’ plan for a commission to look at the issue.

“If somebody wants to study it, they can study it,” he says.

To contact the reporter on this story: William Roberts at wroberts@bloomberg.net.