Online Casino News and Information

PANORAMA

The gambling outfit Cassava, also known as 888.com, are to fire employees in their Gibraltar headquarters. That was the buzz yesterday as employees started to receive redundancy letters, with some sources suggesting that up to 150 may be dismissed.

The layoffs stem from the cessation of the company’s activity in the US due to new legislation banning online gambling in the USA, which has shaken the industry.

The forced abandonment of the US market by online gambling companies is hitting their workforces. As we reported on Monday, another Gibraltar-based company, PartyGaming, are talking of job losses in Gibraltar as costs are cut.

888 Holding plc describe themselves as ‘the world’s No.1 online casino operator and poker room’. They have dismissed 29 employees in an Israeli company, representing about 7% of its workforce there.

888 Holding is also expected to pare down its 150-person workforce in Antigua, most of them call centre and technical support staff, said reports.

DOWNSIZING

A report added: At the company’s headquarters in Gibraltar, a process of downsizing has also begun, however because of labour laws in Gibraltar which mandate a 60-day advance notice of dismissal, the company has not yet decided the final number of employees to be laid off.

The latest figures made public last May put their Gibraltar workforce at 381.

888 is quoted as saying that “In light of the change in legislation in the US and the cessation of the company’s activity in that country, and after reviewing current expenses, 888 is making general structural and workforce changes. Part of the workforce which worked directly with the US market was integrated into international departments.”

Their website says: The 888 Group is headquartered in Gibraltar and owns Cassava Enterprises (Gibraltar) Limited, the company that operates 888.com. Cassava Enterprises operates under a licence granted by the Government of Gibraltar.

In September 2005, the Group’s holding company 888 Holdings PLC completed a successful initial public offering of its shares, which were admitted to trading on the London Stock Exchange. The flotation was an important step in 888.com’s goal of becoming the market leader in the global online gaming entertainment industry.

PANORAMA contacted Cassava in Gibraltar and in the UK. The company spokesman did not deny that redundancies were being made, but promised to get back, which so far they have not.

READ THE ARTICLE AT PANORAMA

THE REGISTER
EXCERPTS FROM INTERVIEW OF CALVIN AYRE BY BURKE HANSON, PUBLISHED AT THE REGISTER
Tuesday 24th October 2006 23:26 GMT

“American gaming enthusiasts have been asking themselves that very question, after Republicans in Congress recently amended the Safe Port Act (H.R. 4954) to prohibit financial transactions between American financial institutions, such as banks and credit card companies, and online gaming sites…”

“Apparently, Presidential hopeful Senator Bill Frist, who helped push the last minute amendment through, wants that money back in the pockets of hardworking local bookies - after all, online gaming, much like online pornography, has been one of the most profitable areas of internet commerce.”

“…Close to 95 per cent of Bodog’s sales come from the US, while neither Ayre nor the company hand a single red cent to the US in taxes. We decided to interview the betting playboy for an insider’s perspective on what are certainly proving to be interesting times for the online gaming industry.”

“ First off, how does it feel to have Forbes put out Calvin Ayre playing cards?

It was a big honor to be asked to be on the face of the Forbes playing cards, especially considering they were handed out to each new magazine subscriber. As if being on the cover of Forbes most popular billionaires issue wasn’t enough.

Right, we heard you were modest.”
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THE CHARLOTTE OBSERVER
ADAM GOLDMAN
Associated Press

NEW YORK - Gamblers may look over their shoulder now, but experts say a new Internet gambling ban won’t keep bettors from ponying up, just turn them on to overseas payment services out of the law’s reach.

“It has put a terrible scare into people,” said I. Nelson Rose, who teaches gambling law at Whittier Law School. “But it won’t by any means wipe out Internet gambling.”

The fright swept through the $12 billion industry on the heels of the recent arrests of two gambling company executives and a new law President Bush signed Oct. 13 that seeks to ban most online gambling and criminalizes funds transfers.

The law has wiped out billions of dollars in shareholder value of British companies, leaving the industry’s future in doubt as U.S. lawmakers initially trumpeted they had found a way to halt bets coming from America. But serious questions remain about whether the legislation can be effective in stopping U.S. residents from playing poker or betting on sports.

The “Unlawful Internet Gambling Enforcement Act” goes after the money, not the millions of players, which would be nearly impossible to enforce. It will essentially try to choke off the way Americans fund their gambling habits, hoping to prevent the transfer of dollars to the popular Internet sites.

It’s also widely understood that the law has online poker in its gun sights, identifying it as a game of chance - something the poker companies dispute. They believe poker is a game of skill and therefore not subject to the new rules.

READ THE COMPLETE ARTICLE AT THE CHARLOTTE OBSERVER

INTERACTIVE GAMING NEWS
by Chris Krafcik

H.R. 4411 - David Carruthers - Money laundering - Aiding and abetting - United States Congress - Bill Frist - Unlawful Internet Gambling Enforcement Act of 2006 - Prohibition - Exodus

These and other words and expressions have permeated the idiom shared by the I-gaming industry, serving as palpable reminders of long-standing legal battles and financial woe, of furtive politics and changing interests. Following the enactment of the U.S. Unlawful Internet Gambling Enforcement Act of 2006, most financially transparent public companies have flipped the switch on their U.S.-facing operations, while others wait and watch as the 270-day prescription period passes.

Private companies, meanwhile, have been the subject of much discussion and speculation. Reports and rumors are circulating about the industry going “underground,” that the new law will do little more than expel regulated, publicly traded companies, clearing the way for private gambling companies and offshore banks to gobble up U.S. dollars on untraceable transactions. Other reports suggest further that the U.S. legislation will, in time, render itself moot after billions in difficult-to-trace “financial instruments” find their way into crooked, criminal claws.

“It leaves an opening for some of the more unscrupulous companies coming in from unregulated places,” said Frank Catania, past director of New Jersey’s Division of Gaming Enforcement and president of Catania Consulting Group.

Many entrenched within the I-gaming community are drawing parallels between the I-gaming ban and the U.S. prohibition spanning 1920 to 1933, where, in 1919, the Anti-Saloon League, in collaboration with other parties, pushed the Eighteenth Amendment through Congress.

“You saw how the U.S. regulated booze,” said 888 CEO John Anderson at this year’s European I-gaming Conference and Expo (EiG) CEO panel discussion in Barcelona, Spain. “That shows you what they’re like.”

READ THE COMPLETE ARTICLE AT INTERACTIVE GAMING NEWS

FOX NEWS
Monday, October 23, 2006
By Radley Balko

LONDON — In the wee hours of the last night of the last session of Congress, Majority Leader Bill Frist attached a ban on Internet gambling to a port security bill.

It was a dubious maneuver, which not only prevented any real floor debate over the ban, but also attached an intrusive, unnecessary, big government measure to a bill that addressed important national security concerns. This meant that any senator who held the position that what Americans do with their own money in their own homes on their own time is none of the government’s business couldn’t vote against the gambling ban, lest they risk being smacked about the head with the “soft on national security” cudgel.

If Frist’s move was underhanded, it was also wholly appropriate, given the way the GOP has handled this issue. The debate — to the extent that there has actually been one — has been marred by misdirection, red herrings, and a certain obliviousness among the bill’s supporters to, well, reality.

The two Republican congressmen pushing the ban in the House of Representatives, for example, — Rep. Jim Leach and Rep. Bob Goodlatte — tried for months to sell the ban as an effort to exorcise the scourge of Jack Abramoff from the Congress and the Republican party, as if Abramoff were the reason the bill never passed in the first place.

READ THE COMPLETE ARTICLE AT FOX NEWS

E-GOLI (http://www.egoli.com.au)
23/10/2006 By: Georgia Fekete

Betcorp Limited (BCL) today announced it had entered into an agreement to sell its gaming operations and operating infrastructure in Antigua and Toronto for US$9 million to Bodog Entertainment Group SA. The move came as a result of the passing of the US Unlawful Internet Gambling Enforcement Act on 13 October 2006.

The legislation effectively makes it illegal for US banks to make or take payments from online gambling sites. CEO Colin Walker said that the firm was pleased that they had secured the sale of their operating subsidiaries.

“In very difficult circumstances we have achieved a satisfactory outcome for shareholders and have been able to safeguard the interests of our customers and employees,” he added.

The firm said that the consideration payable to Betcorp in respect of the disposal comprises a maximum cash consideration of US$9 million payable in five installments.

With US$3 million to be paid on completion and the balance of US$6 million in four equal quarterly installments during the 12 months following completion.

READ THE COMPLETE ARTICLE AT E-GOLI (http://www.egoli.com.au)

PACIFIC COAST BUSINESS TIMES
Bill Lascher
Staff Writer
10/20/06

Fallout from legislation targeting Internet gambling has landed in Ventura County.

Camarillo-based Electronic Clearing House Inc., or ECHO, announced that its annual report for the fiscal year ended Sept. 30 would look different after the Unlawful Internet Gambling Enforcement Act of 2006 was signed by President George W. Bush Oct. 13. The law prevents companies from accepting payments for Internet gambling and requires financial institutions and payment processors to stop any payments that could be used for Internet gambling.

“We’ve always known that it was possible that our Congress would try to legislate morality,” ECHO Chairman and Chief Executive Officer Joel M. Barry said.

ECHO processes debit and credit card transactions and clears checks for clients throughout the United States. It has been caught on the fringes of the high-tech dragnet because it also processes fund transfers for a popular internet technology that is sometimes used to pay for Internet gambling.

Many ECHO customers offer a product known as an “Internet wallet.” Similar to the service offered by eBay-owned PayPal, these wallets allow users to deposit money into online accounts to be used at the user’s convenience to buy products, pay for services, or place a few bets on the pass line of a virtual craps felt. PayPal was the most popular such service for online gaming until it was purchased by eBay, which pulled it out of the industry.

The new legislation does not prohibit Internet wallets. Instead, it requires their providers and companies like ECHO to block transactions connected to illegal online gaming. Although the law took effect upon its signing, it could be up to 270 days until federal agencies adopt guidelines for enforcing the law.

ECHO Chairman and CEO Barry said that although his company will be able to work around the new regulations, they were developed for purely political reasons. Notably absent from the legislation were proscriptions of wagers on horseracing and state-sponsored lotteries.

“The industry itself had had an active lobbying effort and had been assured that this would not happen,” Barry said. “It kind of undermines the logic of the congress to leave online horse racing alone. I think it was more of a political year calculation than a serious effort, but it’s going to have a lot of impact.”

READ THE COMPLETE ARTICLE AT PACIFIC COAST BUSINESS TIMES

THE CAPITAL TIMES
by Ben Popper
Correspondent for The Capital Times

The stakes aren’t particularly high at Tuesday night’s Intramural Texas Hold ‘em tournament at the SERF on West Dayton Street, where 25 players are competing for a grand prize of one T-shirt and the pleasure of a skilled game.

Among these college students, however, the practice of competing for hundreds — even thousands — of dollars at online gambling sites is common, and despite recent legislation, these young people say they aren’t about to stop.

The federal government took broad steps recently to put a damper on the $6 billion that Americans wager online annually. While online gambling sites already had to be based outside the U.S., the new law prohibits the use of credit cards, checks and electronic fund transfers from U.S. banks to place and settle online bets. For the poker crowd at the University of Wisconsin-Madison, though, the reaction is one of bemused annoyance.

“They couldn’t stop kids from downloading music or movies. What makes you think this is going to be any more effective?” said Drew Pyatskowit, a UW junior.
Gambler strategy: Head straight for law’s loopholes
Michelle Stocker
UW-Madison sophomore Louis Lai plays Texas Hold ‘em at the SERF.

Going around the ban

Many of the students say they have already found ways around the ban by employing online programs and credit institutions that circumvent the new law.

“The ban is a big deal, but I’ve heard you can use programs like FirePay to get around it,” said Kurt Peter, a freshman from the Milwaukee area, who estimates he gambles online up to seven hours a week. FirePay, along with services such as NETELLER and Moneybookers, offer gamers Internet accounts through which they can fund their online gambling.

THE COMPLETE ARTICLE CAN BE FOUND AT THE CAPITAL TIMES

GUARDIAN UNLIMITED
Simon Bowers
Friday October 20, 2006

PartyGaming chief executive Mitch Garber has said he thinks there is a 50% chance of new prohibitionist US legislation which outlaws online gambling being scrapped within three years should the balance of power in Washington drift away from the Republicans.

“That might seem like wishful thinking but we could see a strong backlash from US players … and there could be changes [of control] in the house and senate,” he said.

“In the meantime, we are going to keep our US database of [former] players - don’t forget, 10 million people have our software downloaded on their computers.”

His position was echoed by Sportingbet chief executive Andy McIver, who also believes the US political climate could change in the industry’s favour.

However, industry insiders suggested offshore operators such as PartyGaming, Sportingbet and 888 would be unlikely to regain their dominance in the US should anti-online gambling laws be fully unravelled.

They would face heavy competition from the likes of Las Vegas operators Harrah’s and MGM - businesses which had previously avoided internet betting because of confusion over its legality.

PartyGaming, which operates poker and casino websites, immediately closed to US business when the Safe Port Act was signed into law last week. As a result the group lost 70% of poker revenues and 65% of online casino revenues overnight.

Mr Garber conceded PartyGaming had been overtaken as the world’s largest poker operator by rival PokerStars, but described the Israeli-owned group as a “black market operator”.

He played down concern that lower player numbers on PartyGaming’s poker site were likely to prompt an exodus of non-US players.

PartyGaming remains the largest operator in Europe, where the number of new players last week reached a record high. Overall non-US revenues, however, declined 2% for the for the week.

Following its exit from the US, PartyGaming said it expected to take a $250m (£133m) hit to its full-year accounts. Much of this relates to goodwill writedowns on acquisitions including Empire Poker and MultiPoker. It also includes a provision against bad debts from any of the 30 firms that facilitate player payments, should they go bust.

Shares in PartyGaming closed down 2.5p at 28.75p.

READ THIS ARTICLE AT GUARDIAN UNLIMITED

BusinessWeek Online
By Catherine Holahan
Updated: 12:00 a.m. ET Oct 19, 2006

It was getting late on Oct. 12, the night before a sweeping anti-Internet gambling bill would be signed into law. Paul McGuire was at his computer, enjoying one last hurrah on PartyPoker, a site that had pledged to kick off all U.S. users as soon as the law left President Bush’s desk. “It was kind of like that last party before summer ends when you’ve got to go back to school,” says McGuire, a 34-year-old New Yorker and author of the popular “Tao of Poker” blog. “They were playing loose because it was the last night.” Maybe for some.

Not McGuire, whose online handle is “Dr. Pauly.” At 11 p.m., he simply closed down his PartyPoker account, withdrawing thousands of dollars in winnings accumulated in recent weeks. He later wired the funds to an offshore account with NETeller, an Internet bank registered in the Isle of Man, and opened new accounts with two other poker sites — both of them privately owned.

So much for the U.S. crackdown on Internet gambling. The Unlawful Internet Gambling Enforcement Act is designed to halt the flow of the roughly $6 billion that flows each year from U.S. gamblers to foreign Internet casinos by officially barring credit card companies and other U.S. financial institutions from processing illegal wagers. The Justice Dept. has long maintained that online poker gambling, like sports betting, violates terms of the 1961 Wire Act.
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