April 25, 2012

PokerStars Reaches Agreement to Buy Full Tilt, Settle with DOJ

In an surprise move, industry-leader PokerStars has reached an agreement with the US DOJ to purchase long-time rival Full Tilt Poker and settle its outstanding legal matters.

PokerStars has reached a settlement with the US Department of Justice, pokerfuse can reveal. Part of the deal involves the purchase of Full Tilt Poker and full repayment of all players.

The specifics of the deal are not yet known, and no statement has yet come from any parties involved.

Rumors that PokerStars has reached a deal with the DOJ to purchase Full Tilt Poker began swirling early Tuesday morning on poker forum 2+2. Sources have corroborated the story with Pokerfuse that a deal has indeed been reached but could not confirm any specific details.

Alex Dreyfus, CEO of Chili Gaming, stated on twitter that PokerStars has paid $750m to acquire Full Tilt and settle its outstanding legal issues with the DOJ. A reported $330m of that price will go to repay Full Tilt account holders with the remainder believed to be in settlement of outstanding charges against PokerStars.

Until now, French investment group Group Bernard Tapie were known to be in late-stage talks. According to sources at e-Gaming Magazine, “efforts to obtain final DoJ approval to acquire the assets of Full Tilt Poker have ended without success,” and that the deal was “sabbotaged,” according to iGamingFrance.

As a point of comparison, PartyGaming (now known as bwin.party) co-founder Anurag Dikshit agreed to a plea deal with the DOJ in 2008 for a total of $300m. In 2009, payment processor Neteller settled for $136m.

However, the charges facing Scheinberg are more serious. The elusive billionaire, along with an otherwise unknown Isle of Man resident Paul Tate, are charged under violation of the UIGEA, operation of an illegal gambling business, and conspiracy to commit bank fraud, wire fraud and money laundering.

According to the unconfirmed reports on 2+2, PokerStars plans to bring Full Tilt Poker back online, and maintain separate sites.

April 24, 2012

Bet365 copyists need more than a good ad

Bet365 and Ray Winstone revolutionised TV advertising for sports betting. In 2011 the rest of the industry tried to copy its success. But advertising is not the sole success factor.

A disembodied Ray Winstone and a pioneering use of live odds has proven a potent combination for Bet365, allowing it to steal a march on its rivals in the increasingly lucrative in-play market.

The TV campaign, originally launched in 2009 for the Cheltenham races, has evolved from Winstone walking out on a pitch to generate excitement about the 50 in-play markets on offer, to the tough-guy actor receiving a hologram makeover and appearing to fans in a variety of settings, at home, down the pub and at the game. Appearing at half time, he offers the latest live odds in a friendly, almost off-hand tone.

Key to the ad’s success is use of Winstone’s history of playing gentlemen gangsters. He exudes the essence of the gambling man, while tapping into the multimedia, mobile world we live in. Who watches TV without a laptop or mobile in hand these days? Most of Bet365’s target market of young male football fans, that’s for sure.

“The ads have very cleverly tapped into the multi-screen revolution which is shaping how people consume and interact with media content,” points out Oisin Lunny, senior marketing development manager for mobile services and transaction provider OpenMarket, which works with clients across the gaming industry. “Viewers, particularly the digital-native generation, have a high expectation of interactivity, which increases in line with technologies ability to support it.”

While privately-owned Stoke-based Bet365 does not release its financial data, it has revealed that sports betting rose by 47.5% to £195.1m over the first half of its financial year, which started in March 2011. At the same time, co-chief executive Denise Coates notes the launch of the new sports site with its in-play features as one of the highlights of of the year.

It is no surprise Bet365’s rivals have been quick to follow suit. Kristof Fahy, chief marketing officer at William Hill, said its new strategy would include an increasing number of live components. While Ladbrokes’ Game On! campaign seeks to tap into the excitement of betting in-game with its use of famously over-the-top Italian commentator Tiziano Crudeli. Launched for the start of the football season, he is shown getting excited about the games’ most incongruous moments.

In marketing and advertising, where is it often said there are no new ideas, rival brands seeking to ape certain elements of a rival’s campaign is neither frowned upon or unexpected. Customers will rarely, if ever, care who created the advertising first but what they will remember is whether the service they receive lives up to their expectations.

William Hill and Ladbrokes are merely two of the companies that have sought, dare we say it, to copy Bet365’s attempts to generate in-the moment excitement around betting. While it is hoped this kind of incremental betting will bring in new customers, the role of the advertising is simply to drive them to the website or app.

Indeed, as with any online or mobile service, the battle will be won and lost on the customer experience. Driving customers to the site is just the first step. As Lunny says: “While I completely agree with the Bet365 strategy, which sees smartphones and their HTML5 betting site as a key driver of interactivity, this will only be as compelling as the sign-up process for first-time users, which is currently quite laborious.”

Dealing with that as well as addressing the lack of consumer trust about mobile security (many people are still reluctant to punch their credit card details into an m-site), are crucial to ensure consumers stay on the site once the ad campaign has driven them to check it out.

The win-win situation, says Lunny, is to ensure in-game services are properly optimised for use on PCs, smartphones and also with SMS-triggered in-game bets. Meanwhile, new technology, such as MMS age verification, will allow operators to identify customers and build complex profiles that help to make their messages more targeted, engaging customers at the right time with the right message.

“The marriage of technology innovations, consumer appetite for interactivity and clever marketing, such as the TV ads from Bet365, has sparked this massive growth of in-game betting,” explains Lunny. “And it’s only going to get bigger.”

Tycoon Tzvetkoff spotted hiding

Fallen IT tycoon has reportedly been spotted by The Courier-Mail yesterday taking a leisurely family stroll with his wife, son and newborn daughter through New York’s Chinatown, whilst being ‘in hiding.’ He once faced 75 years’ jail for processing $1billion in illegal US gambling money.

His recent “under FBI protection” has come a long way since his last whereabouts, inside a New York jail, for allegedly processing illegal transactions for the world’s three largest gambling companies: PokerStars, Full Tilt Poker and Absolute Poker, using his inside knowledge.

He disappeared in 2010; it was speculated that he was helping the FBI and the US Government’s prosecute the three kingpin owners of the websites.

When approached by The Courier-Mail, Tzvetkoff at first denied who he was.

“No that’s not me,” he said.

“No, no,” he said, refusing to answer questions.

“Look, you’re going to get in a lot of trouble. There are people with us who you’re going to be in trouble with,” Tzvetkoff said while pointing behind him.

When he couldn’t specify who his secret protectors were he said: “Look mate, you’re going to get in a lot of trouble with me right now”.

He hastily packed his family into a nearby taxi and drove off.

Despite being public enemy No.1 in the online gambling community and ratting out his former mates, Tzvetkoff strolled carefree down Chinatown’s popular Mott St.

April 23, 2012

Centrebet embarks on post-acquisition IT consolidation

Online wagering operator, Centrebet, is consolidating its IT infrastructure to reduce costs and remove system duplication following its $183 million takeover by UK-based rival, Sportingbet, in September last year.

A migration of Centrebet’s Web infrastructure over to Sportingbet’s internal platform is underway as well as consolidation of the two companies’ wide area networks (WAN) and call centres.

According to Centrebet network operations manager, Shane Paterson, the company - which has an annual turnover of $1 billion a year and offers 6000 international sports and horseracing wagering events on its website - migrated Sportingbet’s Darwin call centre operations into its own call centre in Alice Springs late last year.

Sportingbet’s Darwin hosting services were also migrated to Sydney, where Centrebet keeps its hosting services. The migration and consolidation will be complete in June 2012.

“The outcomes [of the project] will be significant cost reduction, simplified management and not having to worry about multiple WAN links,” Paterson said of the consolidation program.

Prior to its acquisition, Centrebet implemented a Microsoft Windows Azure platform for the Spring Racing carnival which takes place in October every year.

He said the company had considered buying hardware which would have cost $50,000 and hosting the platform internally.

“The return on investment for us was that we didn’t have to invest in any capital expenditure outlays,” he said of the decision to opt for Azure.

“The network also performed well because data was distributed over a large number of machines rather than a single database. We have access to sufficient bandwidth and processing power when punter numbers and transactions spike.”

Paterson said the company selected Azure also because of a long standing partnership with Microsoft. There are now plans to build microsites for other sporting events such as Australian Football League (AFL) and National Rugby League (NRL) grand finals.

Because of the amount of transactions going through the Centrebet website, security issues such as denial of service (DDoS) attacks are never far from Paterson’s mind.

“We got hit with a nasty DDoS attack back in 2004 which lasted a week and since then we get a serious attempt once a year,” he said.

The company was also a victim of cyber squatting in 2009. Attempts to expand to Greece ahead of the 2010 FIFA World Cup were hampered by cyber squatting on both the centrebet.gr and centerbet.gr domains. The company, through Melbourne IT, ultimately resorted to using dispute resolution laws in Greece to get back the domain names in time for the World Cup, through the ELTA, the Hellenic Post Office.

“We’ve used Melbourne IT brand protection services and that has helped stop further cyber squatting attempts,” he said.

While the company does not operate pokie machines, which are subject to a $1 maximum bet in Australia, Paterson said it is required by legislation to impose weekly and monthly wagering limits for its online customers to crack down on problem betting.

In November last year, the Internet Industry Association made a submission to the federal Interactive Gambling Act 2001 in which it said prohibition of online gambling sites and applications was ineffective given the availability of offshore services.

Instead, the IIA called for problem gambling to be regulated at the PC and smartphone-level.

Gibraltar warns UK of tax plan

A bold warning has been issued to the UK Government about the UK consumption tax plan. The issue was raised at the recent KPMG eGaming Summit in Gibraltar. Britain is set to move forward with plans to impose a 15 per cent gaming tax which will affect UK on-line punters and gaming companies, no matter where they place their bets, the Treasury hopes to have arrangements in place by December 2014.

Gibraltar Chronicle reported: “the move will be counter-productive and, in the long run, more harmful to the UK than to the jurisdictions – such as Gibraltar, the Isle of Man and Malta – at which the measures are aimed.”

A series of gaming experts warned that the moves would damage Britain by opening the doors to an on-line unregulated black market in gambling similar to that which still operates in France. The Gaming Minister, Gilbert Licudi, who opened the Summit, claims the UK changes are unnecessary. He claims the UK market is already protected by Gibraltar’s strict licensing and supervision regime, which he claimed earlier this year is as high, or higher, than in the UK.

In his speech he referred to how the UK could be affected in the future:

“This is a political proposal and politicians, much as we minds. That seems to be happening already on another announcement made by the UK Chancellor at last month’s budget – the proposal to cap tax relief on donations to charity.

David Cameron’s comments this week on this suggests that the UK Government is prepared to listen. We will make sure that our position on the proposed gaming transaction tax is heard and taken into account. We will make sure that they understand that what they call a fairer system of taxation would operate with disproportionate unfairness with regard to Gibraltar.

It has also been suggested to us that one of the reasons for the licensing and regulatory regime is the need to protect UK customers. Online gambling is a leisure activity that carries some risks. Some customers may exercise poor judgment and control, Some customers may seek to commit crimes against the operators.”

Russia to bring back gambling?

Reports from Russia among gaming insiders is that the Government is considering taking measures to bring back gambling to the major Cities.

It has been some 3 years nearly since the close down on the 1st July 2009, making some estimated 300,000 jobless within the country. Russia’s then prime minister Vladimir Putin proposed the legislation in 2006, when president, in an apparent attempt to wipe out an immoral industry. Despite expectations of a compromise with the casinos, Putin stood firm and closed all the casino operations down within the country.

The plan by the Government to have 4 designated regions, Primore region in Russia’s remote far east; the Baltic enclave of Kaliningrad; the Altai region of Siberia; and the Azov Sea in the south. Those regions have hardly seen any development and most gamblers now use illegal operations set up around Moscow.

However from our sources within the country, whom have links to the state parliament, the Duma. Politicians quietly and actively are discussing a revision of the decree that may permit strictly regulated land gambling in the bigger cities, such as St. Petersburg, Sochi, Krasnodar & Moscow.

The corruption from within the law enforcement bureau has been rife towards gambling over recent years and has not stopped the continued rise of illegal dens.

April 19, 2012

Ladbrokes calls for urgent reform

Ladbrokes has called for urgent reform of the betting sector, saying its further expansion here will be dependent on the Government modernising the industry.

The British bookmaker operates more than 200 shops here and ranks second only to Paddy Power in the Irish market.

Despite aggressive acquisition-led growth in recent years, managing director of the Irish division Joe Lewins said that whether Ladbrokes continues to expand in Ireland or merely consolidates its operations rely on the Government reforming the retail betting market — to allow for such things as touch-screen "in-play" betting terminals and extended opening hours.

Currently, Irish-based betting shops can stay open until 9.30pm in the summer and only as late as the last race of an Irish meeting in the winter. Mr Lewins said that such rules are an impediment to retail operations competing with online traders.

His comments follow the publication of a report showing that Ladbrokes — which has been trading here for 26 years — contributed almost €73m to the Irish economy in 2011, including over €1m on local sponsorship activities, and employed nearly 1,000 staff.

"The 1931 legislation governing the sector isn’t fit to meet the challenges of emerging 21st century technologies, and this is leaving the sector unable to compete on a level playing field," Mr Lewins said.

"The sector in Ireland is at a crossroads and any move by Government to remedy the current difficulties must take a holistic approach to reform. If these concerns are not urgently addressed, the sector will continue to struggle and this will have a negative impact on much-needed exchequer revenue and employment."

On the proposed 1% turnover tax on bookmakers, Ladbrokes agrees with Paddy Power that it is worthwhile, but only if the Government can ensure all players will pay.

April 18, 2012

Playtech faces questions over acquisitions linked to founder Teddy Sagi

Playtech is facing questions over a series of proposed acquisitions in which its founder and major shareholder, Teddy Sagi, has a "beneficial interest".

The online gambling software group, which is no stranger to controversy, has signalled its intention to buy a cluster of assets in areas such as social gaming from Mr Sagi, who owns a 48pc stake in Playtech.

Names and details of the companies have not been disclosed but the group said it is likely to spend €95m (£78m).

Playtech said it is also looking at buying, for £10.5m, an office building in London that is owned by a company in which Mr Sagi is "beneficially interested".

The group is seeking to graduate to the main market from Aim by the summer and has also taken on Mr Sagi as an advisor for €1 a year.

Playtech stressed the moves would be put to an independent shareholder vote but analysts expressed surprise.

Simon Davies of Cannacord Genuity said: "There will be inevitable shareholder sensitivity at a series of transactions with its largest shareholder."

That view was echoed by Simon French of Panmure Gordon. "The market will be disappointed by the related party nature of the transactions," he said.

Betsson to acquire Nordic Gaming Group

Betsson AB will acquire Nordic Gaming Group (NGG), a private gaming company based in Malta, owning the brands, NordicBet, Tobet and Triobet. NGG offers gaming in the form of sportsbook, casino and poker to, primarily, Nordic and Baltic customers. Through this acquisition, Betsson secures its position as the largest private alternative to the Nordic monopolies. This acquisition will not affect the previously communicated dividend proposal.

"Through this transaction, Betsson continues to strengthen its Nordic operations and its leading position amongst the private gaming company alternatives in the Nordic region. In addition, Betsson's brand portfolio is strengthened significantly within the betting segment, as NGG receives approximately fifty percent of its revenues from sportsbook", states Magnus Silfverberg, CEO and President of Betsson. In 2011, NGG increased its revenues by 37 percent. During the period 1 April 2011- 31 March 2012, revenues amounted to MEUR 50 and operating income (EBIT) to MEUR 111. At the beginning of 2012, the number of active depositing customers totaled 90,000 and the company has 185 employees. In addition to the income contributed by NGG, it is deemed that synergy effects will be achieved, for example, through the integration of technology platforms and of supplier agreements. As Betsson has a major recruitment need, management believes that the synergies will primarily result in a welcomed injection of qualified staff, which can be utilised within other parts of Betsson which are currently undergoing a strong expansion. Betsson is acquiring NGG from a number of individuals, including both the founders of the company, members of management and employees, as well as from external investors. At closing of the transaction, Betsson will pay a purchase price for the operations (enterprise value) totalling MEUR 65, of which MEUR 5 will be paid either in the form of Betsson shares at a historical 10 day average price or in cash, and the remaining MEUR 60 will be paid in cash. The purchase price is equivalent to 5.9 times EBIT during the last 12 months (1 April 2011 - 31 March 2012). In addition to the up-front purchase price, an additional purchase price, based on the development of NGG during 2012, may become payable by Betsson. Such additional purchase price, if any, will amount to a maximum of MEUR 20, which implies that the total maximum purchase price is MEUR 85. If the outcome of the acquisition results in the full additional purchase price becoming payable, the total purchase price is expected to correspond to approximately 6-7 times NGG's EBIT for 2012. Betsson is entitled to choose to pay any additional purchase price in cash or in Betsson B shares, based on the share price prevailing at the time of such payment. Completion of the transaction is conditional upon customary regulatory approvals.

Betsson has secured a two-year external financing of the transaction, amounting to MSEK 500, which at the current base rate results in an interest rate of approximately 4 percent. The facility will be fully utilized at closing and will be amortised at an appropriate rate which considers the company's dividend policy.

"For NGG, this is an attractive solution as the company can incorporate Betsson's global strength into its operations and it strengthens our possibilities to continue to grow rapidly and with good profitability in the Nordic region, the Baltics and Poland. The two companies have similar cultures, and we foresee a smooth integration, and we believe that we can quickly benefit from each other's strengths ", says Per Hellberg, CEO of NGG.

April 17, 2012

Playtech aims to go social with €95m acquisition

Online gaming software and services provider Playtech is poised to enter the social gaming market with a planned €95m acquisition of real money gaming and social media assets from a company linked to Teddy Sagi, Playtech’s largest shareholder.

Playtech has signed a non-binding Memorandum of Understanding (MOU) with the undisclosed party regarding the potential acquisition of certain B2B real money gaming and B2B social media assets and businesses, together with a 20 per cent stake in a B2C social gaming operation.

The remaining 80 per cent stake will be retained by entities linked to Teddy Sagi, who will be granted perpetual royalty free licences to use the software and other assets under acquisition, as well as a licence to use certain games from the Playtech portfolio in relation to play for fun activities.

The company says it has been monitoring the social media scene and analysing ways to penetrate the market and believes that the intended acquisition will provide it with the broad range of social gaming platforms and products needed to enable it to supply cross platform capabilities for a full suite of products including social casino, poker, bingo and rummy.

In addition to the social gaming platform and products, the acquisition also includes real-money end-to-end online casino software with integration platform and casino games content, mobile poker and casino software, and online poker software.

Under the AIM Rules for Companies, the acquisition would constitute a related party transaction and Playtech says that it intends to seek independent shareholder approval for the deal, as required for a company with a Premium Listing, regardless of whether it has succeeded in moving to a Premium Listing on the Main Market of the London Stock Exchange at the time of completion.

Playtech added that the €95m consideration would be payable in one or more tranches at a time of its choosing following completion, with any outstanding balance accruing interest at a competitive market rate.

In a second non-binding MOU announced today, Playtech has also secured the services of Teddy Sagi as an advisor to the company for a nominal annual fee of €1.

April 12, 2012

Spread betting firm to get green light to return clients' funds

The Central Bank is set to give spread betting firm Marketspreads the green light to return cash to its clients.

The Central Bank, which regulates spread betting firms in the Republic, ordered Marketspreads to suspend operations last Thursday, citing capital adequacy and audit issues.

The move prevented the firm returning funds to clients, but following a report confirming that clients’ cash is safe, the Central Bank has confirmed it intends to give the go-ahead to the company to return the money to its customers.

“Following an independent third-party review of client assets, the Central Bank is amending the direction on Marketspreads to allow for the repayment of client assets,” the regulator said in a statement yesterday.

Marketspreads did not comment. The company said last week that clients’ funds were “safe and 100 per cent intact”. The firm has not said how much in client funds it holds, as the information is commercially sensitive. However, the figure is believed to be between €5 million and €10 million.

The Central Bank statement said the company’s operations were still suspended until it addresses concerns. Company representatives are to discuss these with regulators today.

Marketspreads recently filed returns and accounts covering the nine months to December 21st December 2009, the period immediately before the current owners bought the business from its original parent, Worldspreads.

Auditors Ernst Young withheld their opinion on the financial statements after a number of issues uncovered by the new ownership prompted the company to write down assets by €7 million.

Marketspreads is working on finalising accounts for 2010, and it is understood that these are likely to have a clean audit.

Earlier this year, the Central Bank asked the company to come up with an extra €2.8 million in capital. Director and shareholder Ray Curran has agreed to convert €2.4 million in loans to preference shares and forego interest payments to deal with this problem.

Fortuna expands NMS affiliate deal to major markets

Central European retail and online betting operator Fortuna Entertainment Group has expanded its agreement with affiliate marketing software provider Network Media Services (NMS) to include its operations in the Czech Republic, Slovakia and Poland.

Last August NMS signed an agreement to provide its EGaming Affiliate System Software (EGASS) to Malta-licensed FortunaWin, a subsidiary of Fortuna.

Following several months of research, Fortuna has now decided to expand its agreement with NMS to implement the company’s EGASS affiliate management system for its core operations in the Czech Republic, Slovakia and Poland.

“Since we have proved that EGASS has a market leading product we are pleased to extend our partnership for Czech and other markets where Fortuna operates,” said Fortuna’s online marketing manager, Jaroslav Kulenda.

The agreement will now lead to the rollout of a major affiliate marketing drive across Fortuna’s territories.

“We are delighted to have expanded this agreement with one of the most exciting new companies in this industry,” said Ian Jewers, founder and CEO of NMS. “Fortuna Entertainment Group is operating across multiple market territories and their requirements for multi-language and multi-currency support, independent territory invoicing and an extremely powerful integrated social media marketing solution has been surpassed by the EGASS platform.

“The team at NMS has been developing products for this industry since 1997 so we have been able to draw on a huge amount of experience, not only as developers, but as super affiliates ourselves.”

Other operators currently utilising the EGASS affiliate system include the likes of Italy’s Microgame, Mahjong Logic, Oddsfutures.com, Havana Casino and the soon-to-be-launched Hippodrome Casino online offering.

April 06, 2012

Mega Millions Lottery Fever Shows the Hypocrisy over Gambling

With the Mega Millions lottery reaching over $600 million, the American public went lottery crazy. Citizens who rarely played the lottery waited in long lines and dreamed about a life changing win despite knowing full well they had a better chance of being hit by an asteroid than picking the winning Mega Millions numbers. And it wasn’t just ordinary citizens playing the lottery. Newscasts featured pictures of rich celebrities plunking down hundreds of dollars in hopes of winning more than even they could dream of earning. But the newscasts also showed pictures of politicians puffing out their chests and telling the public how fabulous the interest for the lottery is because the state proceeds from the lotteries has been earmarked for everything from children’s clinics to amateur sports to education. What the politicians didn’t say is that it’s for that exact reason that many states are currently opposing online gambling.

Tracing the history of the lottery in the United States it’s clear that the lottery was always viewed as a way to raise needed revenue. Prior to independence, lotteries were used as a means to finance colonization and when the country was created all 13 colonies had their own lotteries. In fact playing the lottery was actually seen as a civic responsibility. The country didn’t have income taxes so the lottery was a means to pay for infrastructure and to build institutions like universities and hospitals. The public enjoyed it and saw it as a win-win for themselves and the colony. More importantly the proceeds from the lotteries were clearly earmarked for set purposes. So in the colony of Massachusetts for example, the public understood that lottery proceeds would be used to build Harvard, Yale etc. Over time, the lottery lost favor in the U.S. as the puritans started having a larger influence but eventually it gained interest again, primarily in the old west. The interest in lotteries came and went and illegal lotteries like the Irish Sweepstakes gained popularity, but it was only in the mid 1960s that states started sponsoring lotteries. The public was weary of increasing taxes and state politicians viewed the lottery as a hidden tax without the risk of upsetting voters. The northeastern states were the first to offer lotteries but it later spread throughout the U.S. Today only 8 states do not have a lottery and Utah is the only state that has never expressed an interest in creating one, likely because it is forbidden under Mormon rules. Yet as mentioned earlier most of the money that is generated from lotteries is earmarked for preset purposes such as education, healthcare or amateur sports. Only a small portion in a few states is put aside for general revenue and that according to some is the real issue.

I spoke to a former legislator in New Jersey who asked that he not be named in this article but he was happy to express his views on why so many states are currently opposing online gambling and it all falls back to the lottery.

“States are currently starving for money,” the legislator told me, “and they don’t want to make the same mistakes they did with the lottery. When the lottery was introduced in the 1970s and 1980s the states didn’t believe the citizens would accept it unless they were told exactly how the revenues from the lottery would be used, so most states apportioned the majority of revenues for items that citizens would approve.

That was fine with the states because most were doing quite well and they never envisioned the financial mess most are in now. They also could never have imagined how much revenue the lottery was actually going to bring in. Also, many states allowed Indian nations to open casinos starving themselves of that revenue and now they are regretting that decision. But with online gambling they know exactly what it brings. Before the gambling law a few years back was passed (the UIGEA), U.S. citizens were betting upwards of $6 billion a year offshore and estimates are that legal regulated U.S. based online gambling would bring more than double that. So politicians want to make sure that the revenues go to them in the form of general revenues to pay down debt and use as they see fit, not earmarked for some purpose which they won’t be able to touch.”
The legislator specifically pointed to California where he believes an online poker network if implemented properly could almost wipe out their debt. But he was also clear that California won’t move forward unless the Governor and state treasurer are assured the money will go directly towards state debt and not to the tribes or special interests. And he was certain other states in the same boat are willing to wait it out until they have those assurances. Even in his own state of New Jersey he is confident that Governor Christie is waiting for a rule that clearly outlines how the state will get the majority of the revenue to use for debt and infrastructure before moving forward with online gambling and sports betting. The horse racing industry in New Jersey is terrified that online poker will cannibalize betting at the tracks and is prepared to sue the state should legalized state-sanctioned online poker overtake horse racing in popularity. And Atlantic City casinos want assurances that any online casino and poker products will be managed by them and they will get the revenues to supplement their dying land based product. But the legislator believes that Christie, Lesniak and others in New Jersey just want their share of the revenue and could care less who runs it.

“Whichever company or organization that can generate the most revenue will be given the license to run the online gambling in New Jersey,” the legislator said. “Obviously the state wants to ensure that the horse racing industry and casino owners are treated fairly and are given some of the revenue to offset any losses that occur as a result of online gambling but the vast majority of revenues must go to the state. And this revenue has to be undesignated.” As for sports betting if and when it is legalized in New Jersey, the legislator believes that will be tendered out and probably go to an offshore company like Ladbrokes or Betfair which has the experience and software already available. But in the end the state will want projections and the bid will go to the company that can guarantee the most revenue with the least risk.

As for the lottery, the legislator said that the long lineups all last week is proof that Americans are tired of living as they are and just want the chance at success and happiness. “It’s the American dream after all,” the legislator said.

“People in the U.S. love to gamble. It’s in our blood and everyone wants the chance to win it big. The country was founded on gambling and every time some politician has tried to stop it, the activity just went underground. Most states have now accepted that and simply want to ensure they can maximize their revenues from the activity plus they want to limit competition. It was illegal for Full Tilt Poker to advertise but land based poker rooms advertise all the time. State lotteries tell you to dream about living a life of luxury but the state justice department also tells you that you are abetting a crime if you get involved in a numbers racket. But Americans don’t care. If you tell them that they have a shot of winning a million dollars for a one dollar bet they’ll do it. Unfortunately, the lottery also encourages those who can’t afford the dollar to play because it’s their one chance to escape poverty but we can’t make laws and decisions because of how it will affect the very minority. Heck I’m fairly wealthy but I bought 100 tickets.”

The legislator also said that he has a real problem with the government’s stance of promoting land based casinos and lotteries but condemning offshore wagering.

“It’s very hypocritical. That’s why when I had some influence I urged the Governor to legalize all gambling and to also take bets from everywhere. Telling Americans that they’re doing a service to the state by betting at a local casino but also telling them that they are committing a crime by wagering at a website that is legal in another country is just selling them snake oil. And Americans aren’t buying it. Even with all the websites that were closed down, Americans have found other websites that are happy to take their action. Those websites are just more cunning on how they disguise payments. I always believed that instead we should have agreements with other countries that allow them to bet at American websites and Americans can bet at foreign websites. In the end I’m confident far more foreigners would play with American websites than the other way around and the U.S. would be far better off. People in Canada, Australia and even Hong Kong would almost certainly play at a Caesars or Trump online casino but I doubt many Americans would seek out G’day Mate poker if they can wager online with Caesars.”

The Mega Millions lottery was proof that Americans are gambling hungry and the fact that so many websites still take U.S. action is proof that the UIGEA is ineffective. If states and the federal government did as the legislator suggested and opened U.S. gambling websites with reciprocal agreements with jurisdictions like the EU and Australia, the U.S. would clearly come out ahead. Unfortunately that reality still seems to be lost on the majority of politicians, and states will continue to go further into debt until the Governors take their heads out of the sand.

April 05, 2012

Bwin Comments on Full Tilt Poker Downfall

On the release of its full year results for 2011, the giant gambling entity, Bwin.Party Digital Entertainment made several comments regarding the online poker industry and the effect that the downfall of sites such as Full Tilt Poker had on Bwin Poker and the industry at large.

“The indictment of the founders of PokerStars, Full Tilt Poker and Absolute Poker/Ultimate Bet on 15 April 2011 represented the start of what we believe will prove to be a fundamental shift in the shape and structure of the global online poker market,” read the report.

“With the exception of PokerStars, all of these sites have now closed. PokerStars’ relative size meant that it was able to capture the lion’s share of Full Tilt’s non-US players, consolidating its position as market leader in most territories.”

The company said that all this made for a challenging operating environment for Bwin’s poker business, although it believes that it can remain one of the largest networks in the market. The report predicted that Bwin’s position will be further enhanced when the group pools its player liquidity across its poker brands in the dotcom and ring fenced markets in France and Italy in 2012.

While poker made up 27.8% of Bwin.Party’s overall revenue in 2010, this figure dropped to 25.7% in 2011.

The report also predicted that we will soon be seeing the convergence of real money gaming and social gaming. “This represents a major opportunity forBwin.Party and we have of initiatives already underway in these areas that we expect to drive value for shareholders in the medium to long term,” it read.

Mind-blowing Zynga and Wynn?

Social gaming and real-life betting is rapidly becoming a match-made in heaven. It’s recently been exposed that Zynga is in talks with Wynn Resorts about a potential online gambling link between the two. Although none have commented on the matter, it doesn’t stop the rumour mill from running.

At least 20 states are considering legalizing online gambling after the Justice Department reinterpreted a decades-old federal law in December and found it only banned sports betting and not other forms of online gambling. In light of this, Zynga CEO Mark Pincus has said that the firm’s possibilities are “mind-blowing.”

The nypost.com discovered that there could be a few problems that Zynga would encounter. Firstly, Wynn wouldn’t have to be the only partnership.

Among the problems: Most of the proposed state legislation would restrict online licenses to those who already are licensed to run a state gaming operation. Wynn only operates in Nevada.

New Jersey, for instance, has a bill that passed the state Senate and is now in the Assembly that would grant Internet licenses only to those with computer servers based in Atlantic City casinos. “Our goal is to help existing casino operators. We don’t know anything about Zynga,” state Assembly Regulatory Oversight and Gaming Committee Chair Ruben Ramos Jr. told The Post.

Zynga could be moving to the UK, facing fierce competition at the same time.

Indeed, Facebook, which does not want to host online gambling on its own site, has held conversations with UK online bookmakers William Hill and Ladbrokes about offering Facebook users access to their sites, a source said.

Silicon Valley of Internet gaming

New Jersey has been given the green light in the gambling world. Well, nearly. It was reported that an internet bill is currently making its way through New Jersey legislature, allowing Atlantic City casinos to take bets from gamblers from other states. Providing its legal of course.

The measure was approved Tuesday by a state Senate committee.

“This is another step forward toward my goal of New Jersey becoming the Silicon Valley of Internet gaming, generating hundreds of millions in revenues for our casino industry, thousands of jobs for Atlantic City, and tens of millions of revenues for our Casino Revenue Fund to help seniors and the disabled,” said Sen. Raymond Lesniak, a northern New Jersey Democrat who has been the bill’s most vocal supporter.

There are still some obstacles to overcome however, such as legal challenges and demand by supporters of horse racing that the state’s tracks be allowed to offer Internet gambling as well.

The Associated Press reported that New Jersey has been racing to try to get Internet gambling up and running and stake a claim to leadership in a potential multi-billion-dollar industry. The bill, which now heads to the full Senate for a vote, would allow bets to be accepted from other states and nations if the state Division of Gaming Enforcement determines it doesn’t violate federal laws. Internet gambling revenue would be taxed at 10 percent, up from the 8 percent casinos pay on regular slot and table games revenue.

New Jersey was poised to become the first state in the nation last year to offer in-state Internet gambling, but Christie vetoed the bill. The Republican governor expressed doubts about its legality and worried about the possible proliferation of “Internet cafes” and back-room betting joints.

Cashing in on Caesars online sector

Rock Gaming is reportedly buying into an undisclosed percentage of Caesars online sector, Caesars Interactive. The price tag attached to this is an alleged $60.8 million. The reports first surfaced in Newsnet5.com and stated that an SEC filing by Rock shows that it has the option to up its shares in the company by roughly 25 percent down the road for $19.2 million as well.

“Rock Gaming is pleased to expand our relationship with the Caesars organization through an investment in Caesars Interactive Entertainment,” the company said in a prepared statement.

“Through our existing joint venture to develop full-service urban casinos in Cleveland & Cincinnati… we believe that an investment in CIE is a natural next step to align our interests & talents with Caesars.”

The latest news indicates that there is money to be made in social gaming. In Newsnet5’s opinion: “The potential is evident by looking at companies like Zynga, which offers Texas Hold™em Poker & many others on Facebook,” the station notes, pointing out that when Facebook went public earlier this year it was revealed that Zynga made up about 12 percent of the social networking giant’s revenue.

It also added that the laws governing online gambling in the U.S. are in a state of change following last year’s interpretation of the Wire Act by the Justice Department that altered its long-held view that all online wagering was illegal. The new position implies that the act applies to only sports betting.

Trump card on 888

Donald Trump is reportedly eyeing up the online gambling market in America. It’s been speculated that he is on the verge of playing the trump card in the US and is in talks with London gaming company 888. The reports first surfaced within The Times newspaper. As soon as regulation is introduced, Trump hopes to get his foot in the door, or at least that it is what the gambling world is watching unfold. Of course, this is all speculation at the moment so we will endeavor to bring you more as it unfolds.

New Jersey, where Trump’s Atlantic City headquarters is based, is tipped to be among the first states to pass legislation,’ reports the Times.

Betclic exits Portuguese market

Court proceedings could have a devastating impact on football sponsorships provided by online gambling companies. In the latest news within the Portuguese market, Betclic has confirmed to the newspaper Publico that it is about to exit the Portuguese market. If this proceeds, it will end its sponsorship program and impact some 28 regional soccer clubs, sports observers have noted.

It’s also been reported that the litigious actions of Portuguese gambling monopoly Santa Casa de Misericordia de Lisboa, which has launched successful civil actions against Betclic, Bwin & other European internet gambling groups, may have a possible negative impact on football in that country. Various online companies have strongly supported them through sponsorships.

Man at centre of illegal gambling allegations shot dead in Sofia

A 40-year-old Blagoevgrad man who had been at the centre of illegal gambling allegations died on the way to hospital after being shot six times in Sofia's Kiril i Metodii Street.

The Interior Ministry said on April 4 2012 that the man, named in media reports as Yordan Dinov, had been found at about 10am prone on the pavement at a spot between the corners with Bacho Kiro and Budapeshta streets.

Dinov had been the subject of allegations related to illegal gambling online and match-fixing, reports said.

Dinov did not receive threats, said his lawyer Ilko Stoyanov. He added he had had a telephone conversation with the victim in the morning and made an appointment. According to him Yordan Dinov sounded quite normal and calm and did not ever tell he had received threats.

The lawyer said there are about 30-40 lawsuits against his client. The proceedings were initiated by the National Revenue Agency and Gambling Commission.

April 04, 2012

London Police crack online gaming bonus abuse scam

A man has been sentenced to three years in jail for fraudulently using international passports, identity cards and false utility bills to open various online gaming accounts to take advantage of bonus bets being offered by operators.

Andrei Osipau, 35, was apprehended following a joint investigation by detectives from the Metropolitan Police Service Gambling Unit, Project Amberhill, and the UK Gambling Commission.

In the first prosecution of its kind, Osipau was found to have commited 'Bonus Abuse', the practice of using other people's identities to open online betting accounts to take advantage of bonus bets on offer.

He also used online payment institutions to transfer the criminal gains from the online betting account and opened bank accounts under false names. Osipau is said to have made nearly £80,000 from the activity.

“This joint investigation with the Gambling Commission demonstrates the Met's commitment to combating high tech organised crime,” said Detective Inspector Ann-Marie Waller, head of the Met's Gaming Unit. “The sentence imposed by the judge today should deter anyone considering committing crime involving stolen or compromised identities."

The scam was identified on February 26th 2011 when an online betting company received two UK passports bearing different names but the same image within 12 minutes of each other. The matter was subsequently reported to the Gambling Commission who passed it on to the Gaming Unit for investigation.

Met officers initially believed the passports were sent from two addresses in Hove and Eastbourne. Further investigations established that Osipau had masked his own IP address in order to prevent his actions being discovered.

At his address, officers discovered more than 5,900 scans of passports, identity cards, utility bills and bank statements relating to individuals from countries including the U.S, Canada, Australia, New Zealand and Europe.

Osipau was sentenced yesterday to three years imprisonment at Southwark Crown Court, having pleaded guilty at an earlier hearing to five counts of fraud, eight counts of possession of articles for use in fraud and one count of transferring criminal property.

“I expect and intend that you will be deported at the end of your sentence,” Judge Loraine-Smith told Osipau after his sentencing.

April 03, 2012

NJ bill OKs online bets from other states, nations

An Internet gambling bill approved by a New Jersey Senate committee Tuesday would let Atlantic City casinos take bets from gamblers in other states and even other countries, as long as federal and state authorities agree it's legal.

New Jersey has been racing to try to get Internet gambling up and running and stake an early claim to leadership in a potential multi-billion-dollar industry.

But even as the bill edges closer to approval, and supporters try to address legal concerns that led Gov. Chris Christie to veto it last year, its scope is growing.

The bill would allow bets to be accepted from other states and nations if the state Division of Gaming Enforcement determines it doesn't violate federal laws.

Why Nevada offers just about every type of gambling possible — except a lottery

Watching Nevadans form long lines across the California border last week, hoping to strike it rich gambling, would seem akin to Idahoans emigrating for potatoes or Wisconsinites taking a road trip for cheese. Gambling is, more than anything else, supposed to be Nevada’s franchise.

But California offers something Nevada doesn’t: lottery tickets.

Record lottery ticket sales of $1.5 billion last week for a jackpot of $640 million once again raises the question of why Nevada doesn’t participate in a lottery.

“Nevada is sending people out of state to gamble,” said Assemblyman Paul Aizley, D-Las Vegas, who authored a resolution in 2009 to change the state’s constitution. “That, to me, is crazy.”

Casinos see it differently. A lottery in Nevada would be, in their mind, competition.

The Nevada Constitution has prohibited lotteries since it was ratified in 1864. Over the past 30 years, efforts to change that have been squashed by the gaming industry at the Legislature. (Voters did change the constitution in 1990 to allow charitable groups and not-for-profits to hold small lotteries — think church raffles.)

Since 1975, the Legislature has considered a lottery resolution almost every session to start the ball rolling on a five-year process to amend the constitution. It has yet to pass.

A lottery in Nevada would bring in between $30 million and $50 million a year, according to one Legislative analysis done in 2005. Another study, by the Governor Kenny Guinn’s Task Force on Tax Policy, estimated in 2002 that it would net the state $40 million to $70 million a year.

Considering that the state has cut its budget four times since 2008, that money would by no means solve the state’s budget problems.

And gaming lobbyists said that it would cut into their business.

During a 2009 hearing, when Aizley’s proposal was in front of the Assembly, lobbyists articulated their opposition.

“It would directly compete with our business,” said Michael Alonso, a lobbyist representing Terrible Herbst, according to minutes of the hearing. “We do not think the state should be directly competing with its largest industry.”

Lesley Pittman, a lobbyist representing Station Casinos, also pointed to the government competition. “Now is not the time for the state Legislature to make a conscious choice to make it more difficult for our gaming industry to regain its financial health,” she told the committee.

Lawmakers asked if there wasn’t a way that the local operators could figure out how to make money from lottery sales.

But that math would be difficult.

Retailers in California get 6 percent of lottery ticket sales. Education gets about 50 percent to 55 percent, according to a spokesman for California Lottery.

In Nevada, the gaming tax on its largest casinos’ gambling wins is 6.75 percent.

Gov. Brian Sandoval opposes a state lottery.

“It’s not appropriate for the state to compete with our No. 1 industry,” his spokeswoman said.

MGM Resorts International Chairman and CEO Jim Murren told KSNV Channel 3 last week that he also opposes a lottery. His company creates jobs, he said.

“How many jobs does a lottery create?” he asked.

Lottery business on the other side of the border, meanwhile, is doing just fine.

Forty-three states participate in lotteries, generating $17 billion in revenue for those states.

The convenience store just across the California border at Primm is consistently the top seller of lottery tickets in California.

“And it wasn’t close,” said Alex Traverso, spokesman for California Lottery.

Aizley said he doesn’t like to see Nevada money going to buy California lottery tickets and helping fund their schools. But he has given up.

“It just doesn’t pass,” he said. “It’s not a winner for me.”