Online Casino News and Information

DAILY PRESS
By JANE WARDELL - AP Business Writer - October 31, 2006, 8:19 AM EST

ROYAL ASCOT, England — Officials from more than 30 countries debated ways to regulate the global Internet gaming industry on Tuesday, just weeks after the United States effectively banned online gambling.

Britain’s Culture Secretary Tessa Jowell, who was hosting the gathering, said there was broad agreement at one session to improve regulation of the industry amid fears it could exploit children and encourage criminal activity.

Jowell said that a regulated Internet gaming industry would offer gamblers better protection than the U.S. decision to outlaw the practice.

“Remote gambling has gone from a niche to mass market in a matter of years,” Jowell told journalists during a break in the gathering, the first summit to discuss the global impact of Internet gaming.

“We are optimistic that by the end of the day we will have achieved a number of things. There is a recognition that it is in the interests of all our citizens that we move to a framework of global standards on Internet gaming.”

However, U.S. officials declined an invitation to take part in the talks at the Royal Ascot race course outside London.

Officials from Australia, South Africa, New Zealand and online jurisdictions such as Malta, Costa Rica and Antigua and Barbuda were expected to attend.

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HEMSCOT
Todney Hobson
31/10/06 13:27

Surprisingly strong quarterly figures from the online money transfer business has helped to assuage fears over the impact of anti-gambling legislation in the US.

Surprisingly strong quarterly figures from the online money transfer business has helped to assuage fears over the impact of anti-gambling legislation in the US.

NETeller signed up 3,218 customers in the third quarter to take the total to nearly 3.19m. Active customers totalled 619,550, up 16 % from 535,853 in the second quarter, and average daily receipts rose from $4.66m to £5.31m.

So far so good. The problem is that two-thirds of customers are in the US, where President George Bush has signed a law banning online gambling, and 77% of active customers are over there. The latest figures cover the period immediately before the axe fell.

Chief executive Ron Martin says NETeller has performed well during the quarter, continuing to grow its business geographically and to attract new customers and merchants.

However, he admits: ‘The impact of the recently passed Unlawful Internet Gambling Enforcement Act in the US is likely to change the future direction and nature of our business fundamentally.’

He says he is constantly re-examining the group’s position in the US market and its provision of services there is currently under review.

NETeller launched sites in Sweden and Denmark during the third quarter, adding to existing sites in the US, UK, Canada, France, Germany, Italy,

Spain, Japan and China. Further launches into Poland, Turkey, Australia and Brazil are planned for the fourth quarter.

Since the end of September trading has continued to show ‘positive growth trends’ in sign ups and average daily receipts. However, Martin says it is difficult to predict trends or the outcome for the remainder of the year ‘given the current uncertainty regarding the company’s principal market’.

The shares hit 900p last September but have fallen badly over the summer from 840p in April on mounting concerns that it will lose revenue from transferring online gaming money. Today’s reassurance prompted a rise of 7p to 149p

READ THE COMPLETE ARTICLE AT HEMSCOT

EGAMINGPULSE

On 13 October President Bush signed the law that triggered the market value meltdown of several internet gambling operators that derived much of their turnover from US punters (the most prominent being Partygaming, 888 Holdings and Sportingbet). What many people don’t know is that President Bush did so in complete disregard of US obligations under international law.

The Unlawful Internet Gambling Enforcement Act of 2006 makes it a crime for any gambling business to accept a transfer of funds in connection with unlawful internet gambling. It further provides that regulation must be put in place requiring financial service providers to “identify and block” any payments relating to unlawful internet gambling.

When read outside its complex factual context, the act is a peculiar piece of legislation. On its face it does very little, primarily because it does not define what “unlawful internet gambling” is. In essence, the 2006 act only covers internet gambling that was already illegal under state or federal law.

The act is nevertheless important because it removes some of the ambiguity that existed within the arsenal of US gambling prohibition laws. First, it makes it clear that any internet gambling that violates a state law is automatically a breach of federal US law, irrespective of the type of gambling and the supply method. Second, the act makes it clear that internet gambling that takes place legally within the territory of one state does not violate US federal law.

One thing that the 2006 act clearly doesn’t do is to bring the US into compliance with its World Trade Organisation (WTO) obligations, following the loss of the dispute settlement case brought by Antigua. In that case the WTO Appellate Body found in April 2005:#that the US had made specific commitments under the General Agreement on Trade in Services (Gats) to provide market access and non-discriminatory treatment for gambling services supplied cross-border from other WTO members;#that the US prohibition on the use of the internet to supply cross-border gambling services violates the US’s obligations;#that the US had made a prima facie case under the Article XIV Gats exemption clause that such a prohibition is “necessary” to address public interest concerns, such as underage gambling, and could not be replaced with less trade-restrictive measures; and#that the US did not meet all conditions for a successful use of the Article XIV exemption clause because it maintains a de facto exemption from the Wire Act for internet gambling on horse races.

A WTO panel is investigating whether the US has in the meantime complied with its WTO obligations. The act, however, has made US non-compliance considerably worse. First, by making it crystal clear that the US does not oppose internet gambling per se, but only internet gambling that crosses the border of a state. Second, by the act recognising that public interest concerns can be addressed by regulation and technology. Third, the act explicitly preserves the de facto exemption for internet betting on horse races.

In fact, US non-compliance is so painfully obvious that one cannot but wonder about the complete lack of response from the EU and the UK. Companies do not have direct access to WTO dispute settlement and have to rely on governments (or the European Commission) to defend their interests. Of course, gambling is politically sensitive. However, there is little doubt that, if this were to have been a matter of US v EU (as opposed to EU v US), the US would be breaking down the EU’s door.

source : http://www.thelawyer.com

READ THIS ARTICLE AT EGAMINGPULSE

POKER PLAYER
by I. Nelson Rose

Senator Bill Frist (R.- TN), doesn’t want to be President -he wants to be Dictator.

Frist, the majority leader of the U.S. Senate, used his position of power to ram through the Unlawful Internet Gambling Enforcement Act of 2006. He didn’t even give the members of Congress a chance to read the bill.

They were told about it late Friday night, mere minutes before they recessed to campaign for reelection. Frist cynically attached his pet anti-Internet gaming bill to a completely unrelated bill dealing with port security, so no one would dare vote against it. No matter how you feel about Internet gaming, this is not the way laws should be made in this country.

The only good thing to come out of this fiasco is we now know what type of hypocrite Bill Frist is. Frist is one of the most active advocates of American values. Well, one American value is that people get to know what they are voting for. Even giving him the benefit of the doubt, that he really cared about Internet gambling, he appointed himself the decider of how America should handle the issue.

But, in fact, Frist never showed any interest in Internet gaming until he decided to run for President. Having run political campaigns, I can tell you he first conducted polls and focus groups and hired campaign consultants. They told him that he could score a few points with his right-wing religious base by coming out against online gambling.

So Frist threw the idea of outlawing Internet gaming into a speech in Iowa, where the first presidential caucuses will be held in 2008. The post-speech polls and focus group must have been positive, because he next announced it as a legislative priority, even though almost no one else in Congress, or America, cares much about the issue. The bill immediately spooked the entire industry. Giants like PartyPoker announced that they would no longer take bets from the U.S. Frist actually managed to cause as much economic damage as an Islamist terrorist attack: billions of dollars were wiped out overnight, when online stocks fell more than 50%.

This was probably an overreaction, since the new law will not actually do much. The only new crime created is accepting funds for unlawful Internet gambling, defined as violating some other federal, state or tribal law. It doesn’t make operators much more guilty than they already were. For example, David Carruthers, Chief Executive of BetOnSports, was arrested changing planes in Dallas, and served with a 27-page long indictment. Now the indictment would be 28 pages. On the other hand, Internet poker operators have claimed that they are not violating any federal or state law. If that is true, they are still not guilty of a crime.

This law is supposedly designed to stop money transfers. Bizarrely, banks and payment processors cannot be charged with this new crime. The federal regulators have 270 days to come up with new regulations for these money transferors. But the biggest players, Neteller and FirePay, will take the position that they are not subject to U.S. regulations, since they are not U.S. financial institutions. The only danger is that banks will be told they can’t send money to these payment processors. Prosecutors can get injunctions to prevent Internet Service Providers from hosting gambling sites and affiliates, but these already are, or will be, on foreign servers.

Can anything be done about this new law? Unfortunately, no. Using its police powers, Congress can do just about anything to any form of gambling. It just would have been nice if they had read the bill before they voted.

READ THE ORIGINAL ARTICLE AT
POKER PLAYER

THE TIMES
The Times Online (www.timesonline.co.uk)
Louise Armitstead and Matthew Goodman

TWO of the biggest UK-listed online poker operators, Party Gaming and 888 Holdings, have held preliminary talks about a possible merger to create a £1.6 billion company.

Both firms have been trying to find a way to cope after sales were hit by the introduction of laws banning online gambling in America.

Party Gaming, the world’s biggest online poker group, fell out of the elite FTSE 100 group of companies, while 888 Holdings dropped out of the FTSE 250 index. Their shares collapsed when both firms said they would cease trading in America.

Executives from the two companies have in the past couple of weeks held exploratory talks to combine their pool of online players. It is expected that further talks will be held in the coming weeks. It is one of several options being considered by both companies and their rivals.

One insider said: “All the players have been talking to each other for weeks. At one stage there were plans for attempting a multi-company merger but it was decided that this would be too difficult and that one merger at a time would be quicker.”

He added: “The biggest problem facing gaming companies is that each one’s pool of players has been dramatically reduced by the removal of the American market. Now when players sign on, there are a lot fewer people to play against, which means even those that are legally allowed to play are finding it less interesting.”

Other firms also trying to find ways to consolidate include Sportingbet, the AIM-quoted company whose former chairman, Peter Dicks, was arrested in America last month, Excapsa, which is also listed on AIM, and Bwin, an Austrian internet betting firm.

The big gaming companies are looking to acquire rivals that have a strong European or Asian presence. For example, Party Gaming has been linked with a deal to buy Gamesys, which is big on the Continent, and Victor Chandler, the bookmaker that has the biggest player base in Asia.

Ten days ago when Party Gaming released its “key performance indicators” for the third quarter, Mitch Garber chief executive, told analysts the company was in talks with several parties. Two weeks ago, Garber told The Sunday Times: “Consolidation is, in my view, the most sensible way to grow the business right now.”

Party Gaming was floated on the London Stock Exchange last year despite its prospectus containing 33 pages warning of risks such as a block on money transmission. The firm earned 85% of its revenues from US clients using its internet services.

In the past month Party Gaming’s shares have slumped 70% to 30p. Over the same period 888 fell 24% and closed on Friday at 108p.

THIS ARTICLE CAN BE READ AT THE TIMES

THE OREGONIAN
Sunday, October 29, 2006
ALEX PULASKI

Peter Dumdeang’s voice rose above the TV patter in a bare-walled East Portland apartment, his insistence interrupting two other men who, like him, appeared hypnotized by their laptops.

Things were desperate. Down to his last chips Thursday in an Internet poker tourney, Dumdeang needed one of two cards to survive. “C’mon, eight,” he pleaded. “Eight of hearts on the river.”

The river — the last face-up card in the most popular poker game, Texas hold ‘em — flashed on his screen. Bingo: eight of hearts. High fives erupted, and chips neatly marched into his on-screen stack.

Fortune delivered on that hand, but Dumdeang and millions of other online gamblers across the nation remain wondering whether their luck is finally running dry. President Bush signed a law Oct. 13 aimed at cutting off the flow of money to online casinos based offshore. The law doesn’t expressly outlaw Internet gambling, but it sets civil and criminal penalties — as long as five years in prison — for transmitting funds between online gambling sites and institutions, such as bank and credit-card companies.

In Oregon and across the country, poker players continue to play online despite the law, which federal authorities say they are unsure how to enforce. In many cases, players use online third-party financial sites based overseas to move money between U.S. bank accounts and gambling sites.

READ THE COMPLETE ARTICLE AT THE OREGONIAN

BBC NEWS

The US crackdown on online gambling is a “new prohibition”, which is likely to fuel a rise in fraud and exploitation, the UK culture secretary has said.

Offshore sites could become the “modern equivalent of speakeasies”, illegal bars which opened in 1920s America when alcohol was banned, Tessa Jowell added.

New US laws forbid firms from taking internet bets, and ban banks and credit card firms from allowing web payments.

Ms Jowell said regulating sites worked better than prohibition.

Spending checks

Under UK government plans, the Gambling Commission is to vet sites, giving official approval to those with the best working practices.

Operators will not be allowed to target children and must keep customers informed about how much money they have spent.

Key staff, such as managing directors and finance managers, will also be checked for links to organised crime.

Ms Jowell said: “Broadly speaking we have three choices: you can prohibit, like the US, do nothing or regulate, like we have.

“I firmly believe we have chosen the path that will do the most to protect children and vulnerable people and keep out crime.”

READ THE COMPLETE ARTICLE AT BBC NEWS

LUDWIG VON MISES INSTITUTE
By Mark Thornton
Posted on 10/26/2006

Congress purported to act to protect the values of the American people when it passed the “Unlawful Internet Gambling Enforcement Act.” The result has been a serious blow to a growing industry. Whose values was Congress protecting? It had nothing to do with the American people at large. Congress was protecting the “values” of casino owners and those who work in the state lottery racket.

This “enforcement act” bans credit card transactions involving internet gambling websites. The bill was added to port security legislation at the last minute giving no one the chance to read it and little political opportunity for Congress to amend it or vote against it. It was the capstone to another very bad session of Congress.

The first fallout from this legislative bombshell was its impact on the major internet gambling companies who lost half their stock market value. Americans are reported to make up about half the global demand for internet gambling. These are the companies that were best serving their customers, providing them with relatively safe and low-cost opportunities to gamble.

Due to the nature of internet commerce, online gambling sites had already taken several measures to demonstrate that they provided a fair and reliable service. Competition between gambling websites had also produced enhanced consumer satisfaction as new safety features were added and copied across the marketplace for internet gambling.
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INTERNATIONAL HERALD TRIBUNE
By Simon Packard and Amy Wilson Bloomberg News
October 26, 2006

LONDON PartyGaming, the world’s largest online poker company, lost 75 percent of its revenue when the company shut down its U.S. sites to comply with a new law enforcing a ban on Internet gambling. That has not dented the optimism of the chief executive, Mitch Garber.

“Chaos breeds opportunity and we will seize that opportunity,” Garber said during a conference call last week, when he laid out the strategy of his company for international expansion, particularly in Europe. “The European Union is run in a way that favors our business.”

Britain, Italy and Belgium are opting to regulate Internet gambling, rather than outlaw it, as players turn increasingly to the Web. The EU is pushing countries to scrap any measures that protect domestic companies when those countries open their markets. Earlier this month, regulators told members including France and Austria to stop discriminating against international bookmakers and casinos.

The changes may give U.S. gamblers more ways to evade the ban on Internet betting at home, said William Eadington, a professor at the Institute for the Study of Gambling and Commercial Gaming at the University of Nevada at Reno.

READ THE COMPLETE ARTICLE AT INTERNATIONAL HERALD TRIBUNE

LAS VEGAS SUN
October 24, 2006
By Lisa Mascaro

WASHINGTON - Could a cornerstone of Republicans’ American Values Agenda - the just passed law to ban Internet gambling - come back to bite the party on Nov. 7?

That’s the prognosis of poker-playing scholar Charles Murray, who warned in a recent newspaper opinion piece of the political damage Republicans may face from the nation’s poker-playing masses this fall. An estimated 8 million Americans gamble online.

“We are talking about a lot of people … who are angry enough to vote on the basis of this one issue, and they blame Republicans,” said Murray, a scholar at the American Enterprise Institute, writing in The New York Times.

The Poker Players Alliance, which fought the bill on Capitol Hill, says Murray is spot on.

The group’s president, Michael Bolcerek, said that in catering to the religious right, which pushed Congress for the ban, Republicans have antagonized the party’s rank and file who just want to play a few hands online.

Bolcerek said he has been getting a continuous flow of e-mails from Republicans “who say they’re going to vote straight Democrat.” The group is urging its 120,000 members to vote - and posted congressional voting records at its Web site.

“We believe it was a miscalculation by the Republican Party to assume these people won’t go to the polls and vote on this issue,” Bolcerek said in an interview.

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