EU Says U.S. Internet-Gambling Laws Break WTO Rules

A U.S. crackdown on European online gambling companies such as PartyGaming Plc and Sportingbet Plc is illegal and may justify a legal challenge at the World Trade Organization, the European Union said.

An investigation “found that U.S. laws on remote gambling and their enforcement against EU companies constitute an obstacle to trade that is inconsistent with WTO rules,” the European Commission said in a statement from Brussels today. “The provisional conclusions of the report imply that WTO proceedings against U.S. measures would be justified.”

The commission, acting on a complaint by European Internet gambling companies, says U.S. authorities targeted European businesses for operating gaming sites while failing to take action against domestic companies that offer similar services. The commission began its probe into the U.S. laws in March 2008.

The core of the industry complaint is that the U.S. Justice Department targets foreign Internet gambling owners -- and not domestic firms -- under U.S. legislation the WTO says violates international trade obligations. While the U.S. subsequently renounced those commitments and negotiated a settlement with the EU in December 2007, European companies are still subject to legal proceedings based on their past activities in the U.S. online gambling and betting market.

‘Positive News’

“Overall this is positive news for the industry as it’s another sign the EU is continuing with a reasonable approach on the issues surrounding the regulation of online gaming,” said Gavin Kelleher, lead analyst at online gambling consultancy H2 Gambling Capital.

Rather than going to the WTO immediately, the report “indicates that the issue should be addressed with the U.S. administration, with a view to finding a negotiated solution,” said the commission, the EU’s trade authority.

Many publicly traded European companies, including PartyGaming and 888 Holdings Plc, pulled out of the U.S. after Congress passed the 2006 Unlawful Internet Gambling Enforcement Act, but they face possible criminal prosecution for activities before then.

“The proceedings are continuing despite the withdrawal of European companies from the U.S. market in 2006 following changes in the U.S. regulatory framework,” the commission said. “The report comes to the conclusion that these proceedings are legally not justified and discriminatory.”

Concessions

Nefeterius McPherson, a spokeswoman for the U.S. Trade Representative’s office in Washington, said her agency and the Department of Justice “are studying the report and will discuss it with the European Commission.”

A WTO panel ruled against the U.S. ban on Internet gambling in November 2004 and an appellate body upheld that decision five months later. The U.S. then took the unusual step of going back and saying it never meant to make any pledges on gambling and was going to withdraw the issue from WTO jurisdiction. Other nations negotiated other concessions in return.

“Once this withdrawal occurs, the U.S. would no longer be obliged to guarantee future access to its gambling and betting market, but this does not mean it could disregard its obligations in respect of past trade,” the commission said.

The industry complaint was lodged mainly over the prosecution and threat of prosecution against EU operators while the U.S. commitments were in place, said Clive Hawkswood, chief executive officer of the Remote Gambling Association. “If the U.S. can give the EU some assurances it will no longer take action, then we’d be very happy,” he said.

Arrests

The EU is still investigating U.S. prosecutions of executives running Internet gambling sites. Sportingbet Chairman Peter Dicks was jailed in New York in September 2006 as part of an investigation into illegal gambling. David Carruthers, former head of Betonsports Plc, was arrested in Texas in July of that year and his company was barred from doing business in the U.S.

The arrests were part of the government crackdown on illegal online gambling in the U.S., where officials said Internet betting sites may launder money and sell drugs, and lack safeguards to screen out minors and gambling addicts.

U.S. laws have caused “serious adverse effects” for the EU including losses of revenue and stock-market value among companies that are absent from the U.S. market, the report says. In addition, “the threat of serious sanctions hanging over” these companies affects their activities outside the U.S. and there are knock-on effects on other sectors that supply the gambling industry, such as financial or professional services.

UEFA charges Macedonian club with match - fixing

UEFA have charged Macedonian club FK Pobeda, its president and one player with match-fixing, European soccer's governing body said Thursday.

"The match under investigation was the UEFA Champions League first qualifying round game between FK Pobeda and FC Pyunik on 13 July 2004," UEFA said in a statement.

"The charge is based on reports received from the betting industry on irregular betting patterns and the declarations of several witnesses. The Control & Disciplinary Body will deal with the case on 17 April."

UEFA to set up anti-corruption unit in Europe

UEFA are planning a Europe-wide anti-corruption network aimed at tackling match-fixing and illegal betting in all football competitions on the continent.

European football's governing body announced yesterday they are to set up a six-man special investigation unit to look into corruption in their competitions.

Currently, 15 matches from last season and 10 Intertoto Cup and UEFA Cup qualifiers this season are under investigation.

UEFA general secretary David Taylor said he wanted the network to be spread across Europe.

He said: "We will be setting up a special investigations unit to look into situations reported to us in terms of irregular betting. This is a danger in our game, we will not allow our sport to be destabilised by those who wish to manipulate it for their own monetary gains. We are employing extra people and strengthening our early warning systems to fight the war against illegal betting and corruption."

Taylor said talks would be held with national associations with a view to forming a European system covering all football competitions.

FIFA to monitor sports betting at national level

Thanks to interest expressed by the Lithuanian Football Federation (LFF), FIFA has paired up with the country’s governing body to monitor sports betting at the national level. Through FIFA’s Early Warning System GmbH (EWS), member clubs have access to advanced technical capabilities, in an attempt to provide additional support to current measures.

The EWS, which is already in place for the 2010 World Cup qualifying matches, will become part of the LFF’s strategy next month. As reported on fifa.com, the Early Warning System will be introduced to national competitions and various international football events down the road.

The system has been well-received to date, with a string of expansions and advancements made within the past three years to better serve the needs of member associations. The EWS found its way to a high-profile event when it was implemented by the Olympic Committee (IOC) as part of the 2008 Olympic Games.

Further improvements are planned for the system, which is provided by a Zurich-based company. Its purpose is to identify unusual betting activities and detect any actions that could suggest an attempt to influence matches.

Ladbrokes to renew challenge to Nordic monopolies with new TV campaign

Ladbrokes is set to once again challenge Scandinavian gambling monopolies by embarking on a major TV advertising campaign in the Nordic region.

The bookmaker has produced a series of five TV advertisements and copy for radio and print media. They will reinforce the message that Ladbrokes provides a more competitive betting offer than state-run monopolies and provides a vision for what could be available to consumers in the Nordics were Ladbrokes able to establish a physical presence in the region.
The company has produced two English-language spots each for the Swedish, Danish and Norwegian markets. They will appear on UK-licensed satellite channels broadcasting into those countries as well as Finland.

Ladbrokes described the new adverts as more mature and developed than the ones they broadcast previously into Scandinavia, which it described as more of a brand awareness exercise.

Ed Andrewes, Ladbrokes managing director of eGaming, said: “The Nordic region is an important one for Ladbrokes and we believe this strong, hard hitting creative communicates the benefits of betting with Ladbrokes as opposed to the state monopoly and other betting operators.”

The creative was developed in house and in conjunction with the director Jesper Andesson of TV-Dinner in Stockholm and features the actor Ed Stoppard, who appeared in Roman Polanski’s film The Pianist.

Atlético Madrid's gaming site goes live

Finland's Paf has announced that the official online gaming site for its football partner Atlético de Madrid has now gone live at Apuestasrojiblancas.com, under the terms of a three year sponsorship agreement signed with the Spanish La Liga club last year.

Available in both English and Spanish, the site will offer a complete range of betting and gaming services including sports betting, casino, poker, bingo, lottery, slots, and skill games, all connected to the Atlético de Madrid brand.

Anders Wiklund, Head of Business to Business at Paf, said: “We are pleased to announce that Atlético de Madrid’s Official Gaming Site has today gone live. It’s a true honour for Paf to launch this service, and together with the club, be able to offer Atlético de Madrid fans a very special and unique online entertainment service.”

Mr Wiklund said that Atlético de Madrid is one of the first football clubs in the world to have its own online gaming site, created and developed especially for the Atlético de Madrid community.

Juan Carlos Moya, Commercial General Director of Atlético de Madrid, said: “Today a big step has been taken for us as a club, when it comes to developing and meeting the demands and trends on the market. Atlético de Madrid’s Official Gaming Site, combined with the recent release of our club’s new website, shows that we are meeting and communicating with our fans in a modern way with the help of new technology.

“In the roll-out process, Paf have shown that they are truly professional and dedicated to this cooperation, not least when it comes to putting the fans in prime position combined with a responsible and social mindset."

As part of the agreement, Paf has confirmed that part of the profit from the gaming service will be donated to Maxi’s Rosario project in Argentina, in co-operation with the Atlético Foundation.

Wisla Krakow sign Bet-at-home sponsorship deal

Bookmaker company bet-at-home.com has signed a shirt sponsorship deal with Wisla Krakow. During a press conference both sides signed a contract which expires in two years.

"We are glad such a dynamically developing company has decided to support Wisla actively. We have reached an agreement quickly. We are happy the more so in that in the time of crisis searching for sponsors has become more difficult - says Wisla president, Marek Wilczek."

Mangas Gaming announces Bet-at-home acquisition and confirms Expekt buy out

Mangas Gaming, the holding company for London-based betting operator Betclic, has confirmed the acquisition of Expekt, the Scandinavian-focused sports betting operator and announced the acquisition of Bet-at-home.com, a sports betting operator listed in Frankfurt, Germany, with a strong presence in German-speaking countries and Central Europe.

Financial amounts were not revealed, although a figure of €125m for Expekt has been widely circulated. Bet-at-home’s market capitalisation was €38.2m as of this morning.

Nicolas Beraud, chief executive of Betclic, said the acquisitions were part of Mangas Gaming’s stated ambition to become one of the leading pan-European online betting and gaming operators.

He said: “The acquisition of Expekt enables us to tap into significant market share in Scandinavia and that of Bet-at-home provides access into Germany and Central Europe. Combined with Betclic’s strong presence in France, Italy and Spain, we are realising our ambition of being a leader in pan-European egaming.”

Mangas Gaming will keep the three brand names operational to keep the “local feel and know-how” of each operator. The strategic moves by Mangas mean the company will record around €200m in gross gaming revenues in 2009 and have four million registered customers and around 500 staff.

The two acquisitions will be financed by Mangas Gaming, in which holding company Financière Lov, headed up by former Endemol France boss Stéphane Courbit, and Monaco’s Société des Bains de Mer (SBM) have equal stakes. Isabelle Parize of Mangas Gaming will further develop the group’s acquisition drive with further announcements in the coming months.

MGM Mirage warns of debt default risk

MGM Mirage, the gaming operator that owns some of the world’s best-known casinos, warned on Tuesday that it is at risk of defaulting on its debt, underscoring the steep downturn in the global gaming sector.

In a regulatory filing to explain the delayed release of its fourth-quarter earnings, MGM Mirage – which counts billionaire Kirk Kerkorian as its biggest shareholder – said it was "still in the process of assessing its financial position and liquidity needs".

The group owns the Bellagio, MGM Grand and Mirage casinos in Las Vegas, and other properties in Atlantic City. It is trying to complete construction of CityCenter, a $9bn gaming and hotel complex on the Las Vegas Strip that is the costliest such development ever.

The group recently drew down the remaining $842m from its revolving credit facility but still needs more capital. It has $1.2bn of bonds that fall due this year and another $1.2bn in 2010. It also needs to finance an extra $1.2bn to complete CityCenter.

With credit markets frozen, it has been unable to refinance any of its debt. It said it was close to breaking its debt covenants “if the recent adverse conditions in the economy in general – and the gaming industry in particular – continue”.

"It is likely that the report of [MGM Mirage’s] independent registered public accounting firm . . . will contain an explanatory paragraph with respect to [its] ability to continue as a going concern," the company said.

The group brought in Dubai World as a partner in the City-Center development two years ago in a $5bn deal that gave Dubai World a stake in MGM Mirage. But since then, MGM Mirage has been hit by a downturn in attendance. Its shares have fallen more than 90 per cent in the past 12 months.

"There’s a clock ticking," said Susan Berliner, JPMorgan analyst. "There’s only so much time before their liquidity runs out. They have to hurry and execute something in terms of a capital raise but their options are becoming much more limited."

Trump Entertainment Resorts recently sought Chapter 11 bankruptcy protection after it was hit by a sharp decline in revenues at its Atlantic City properties.

The company sought bankruptcy protection after bondholders rejected a bid for the group from Donald Trump, the largest shareholder. Mr Trump recently stepped down from the company’s board.

European football revenues boost Sportingbet operating profit by 35%

A strong performance from its core European football betting component saw Sportingbet conclude a “robust first half of the financial year”, according to chief executive Andy McIver, as it recorded a 35% increase in operating profit to £10.1m for the second quarter, up from £7.5m for the comparable period a year earlier.

Helped by full football programmes across all European leagues, amounts wagered on sports betting in Europe over the period achieved year-on-year growth of 10%, to stand at £234.3m. Casino and gaming contributed a further £10.9m, and poker £5.3m. The quarterly performance saw operating profit for the half year reach £16.2m, 39% up on the figure achieved over the same period last year.

Football continues to dominate Sportingbet’s business, representing 62% of group sports revenue and 74% of European sports revenue over the quarter. The company’s core markets of Spain and Greece also continue to perform well, with revenues up 16% and 83% respectively. The company said the Spanish market was showing a marked improvement since being brought in-house.

There were however signs of the economic downturn impacting Sportingbet's Australian horse racing operations, particularly revenues from its higher staking Australian telephone business. Australian horse racing operations account for 15% of group sports revenue and 96% of the group's Australian sports revenue. A number of new state taxes and product levies also saw post-tax revenue falling 8% year-on-year to £4.5m. However, it added that it anticipated the negative effect of the tax regime to be increasingly offset by the positive impacts on the internet business of the relaxation on sports betting advertisements across the country’s leading racing states of New South Wales and Victoria.

The group also continued to expand its global footprint over the period. In December 2008, Sportingbet obtained a licence in South Africa for online sports betting, currently the only legal gaming product available in this market. It will also launch a Romanian language website in the third quarter of 2009 to capitalise on the high growth rates currently being seen in its Eastern European markets.

Andrew McIver, group chief executive, commented: "Quarter two concluded a robust first half of the financial year, with operating profit in the six months growing 39% to £16.2m. The Group's balance sheet remains strong with net cash of £27.3m. Demand for our market leading sports betting product continues to grow. The third quarter has started strongly and the Board remains cautiously optimistic for the full year outcome."

Internet "addiction" may fuel teen aggression

Teenagers who are preoccupied with their Internet time may be more prone to aggressive behavior, researchers reported Monday.

In a study of more than 9,400 Taiwanese teenagers, the researchers found that those with signs of Internet "addiction" were more likely to say they had hit, shoved or threatened someone in the past year.

The link remained when the investigators accounted for several other factors -- including the teenagers' scores on measures of self-esteem and depression, as well as their exposure to TV violence.

The findings, published online by the Journal of Adolescent Health, do not however prove that Internet addiction breeds violent behavior in children.

It is possible that violence-prone teenagers are more likely to obsessively use the Internet, explained lead researcher Dr. Chih-Hung Ko, of Kaohsiung Medical University in Taiwan.

However, the findings add to evidence from other studies that media -- whether TV, movies or video games -- can influence children's behavior. The also suggest that parents should pay close attention to their teenagers' Internet use, and the potential effects on their real-life behavior, Ko told Reuters Health.

According to Ko's team, some signs of Internet addiction include preoccupation with online activities; "withdrawal" symptoms, like moodiness and irritability, after a few Internet-free days; and skipping other activities to devote more time to online ones.

In this study, teenagers who fit the addiction profile generally were more aggression-prone than their peers. But the type of Internet activity appeared to matter as well.

Online chatting, gambling and gaming, and spending time in online forums or adult pornography sites were all linked to aggressive behavior. In contrast, teens who devoted their time to online research and studying were less likely than their peers to be violence-prone.

According to Ko, certain online activities may encourage kids to "release their anger" or otherwise be aggressive in ways they normally would not in the real world. Whether this eventually pushes them to be more aggressive in real life is not yet clear, the researcher said.

Ko recommended that parents talk to their children about their Internet use and their general attitudes toward violence.

Hill’s highlights increased online contribution to robust performance

A robust performance across all product lines saw William Hill record group gross win of £1,022.5m and net revenue of £963.7m for the year ended 30 December 2008, 6% up on the comparable period in 2007, with operating profit dipping 1% to £278.6m.

An increased contribution from its expanded online business, following the completion of the transaction with Playtech which established William Hill Online, was credited by the company as helping trading into 2009 remain resilient. Net revenue for the first eight weeks of the year was 9% up on the comparable period a year earlier. On the online side, sportsbook, bingo and skill games performed particularly strongly, boosting net revenue from the online side by 54% compared with the same eight-week period in 2008.

Over the year as a whole, the online business achieved net revenue growth of 13%, operating profit growth of 10% and an 18% increase in active accounts. The company said this reflected the increased focus on the growth opportunities in online gambling, following the appointment of Ralph Topping as chief executive in February 2008, and said it believes William Hill Online is “well placed to capitalise on the significant growth projected to come from online betting and gaming over the next few years."

Hill’s added that the online channel was now its “preferred approach for targeting betting and gaming customers internationally as it is the most cost-effective mechanism for reaching large, geographically diverse customer bases.”

The group’s core retail business, which accounts for 82% of the Group's gross win, delivered a strong trading performance in 2008 in spite of the challenging economic conditions. Compared to the same period in 2007, gross win grew by 7% and operating profit by 7% over the year. The company said it achieved this by continuing to invest in the development of its LBO estate and by stringent cost management measures.

Hill’s also confirmed reports which emerged last week that it was to offer a £350m share issue to restructure its existing £1.2bn debt, due to current credit market conditions making it impossible for the company to refinance its existing bank facilities in full in the bank market.

Topping said he believed the refinancing, combined with a strong focus on cost discipline, capital management and an enhanced online offering, would make William Hill “financially and operationally stronger with a more robust balance sheet as we continue through this difficult economic period.”