Rumours are true - Israeli owned firm plans IPO in London

The rumoured London listing of turnkey provider Playtech was confirmed this week by a company spokesman, who said that his company hoped the shares would be placed with institutional investors by the end of March.

The spokesman confirmed that Playtech plans to raise GBP 175 million in a London stock market flotation that will value it around GBP 550 million.

The firm, majority-owned by Israeli internet-gaming entrepreneur Teddy Sagi, counts the Tote, Bet365 and BetFred among its clients and is the latest in a series of online gambling firms to opt for a London listing. Yesterday, Excapa Software, which also makes online poker software, floated on London's junior AIM market and saw its shares rise 5 percent in early trade.

Cyprus-registered Playtech said in a statement it made sales of GBP 27.4 million and a post-tax profit of GBP 20.5 million for the financial year to December 31, 2005.

Collins Stewart has been appointed as sole bookrunner, nominated advisor and joint broker. Seymour Pierce is joint broker.

Playtech has 37 licensees which operate in 89 online casinos, 16 online poker rooms and 14 bingo sites, it said.

Playtech competitors include Toronto, Canada-based CryptoLogic Inc., which has a market value of C$379.8 million ($329 million)

While the company's management is based on the Isle of Man, 90 percent of its workers are in Estonia. The company has a "close relationship'' with the University of Tartu, located in the southern part of the Baltic country, and recruits its graduates as software developers, the spokesman said.

Israeli press coverage on the company late last year included some interesting inside detail, claiming that Playtech was founded in 2000 by NAV New Age Investments Ltd., controlled by Sagi and three 30-something entrepreneurs from central Israel, with current Playtech VP marketing incumbent Elad Cohen as CEO. NAV was delisted from the Tel Aviv Stock Exchange (TASE) in 2003.

The other two founders are said to be Amnon Ben-Zion and CEO Rami Beinish. Ben-Zion and Cohen met during their compulsory military service in the Israeli Defence Force central processing unit. Ben-Zion sold his Playtech stake a year ago.

The article reports that a valuation for Playtech conducted for NAV in late 2002 found that NAV owned 68 percent of the company, Elad Cohen 19 percent, and the other two founders 6 percent and 7 percent, respectively. Playtech was valued at $18.4 million, after deducting debts, a figure that now seems unlikely. The valuation was carried out for a failed attempt by Sagi to obtain capital for the company by issuing 10 percent of its capital to an external investor. The valuation indicated that Playtech had $4.5 million in revenue in 2002, and an operating profit before financing expenses of $1.5 million.

Heartsore investors over Playtech potential

There are likely to be some heartsore investors in the wake of software developer Playtech’s recent announcement that it intends to go public in a London IPO that will likely generate millions for its principal shareholder, Teddy Sagi, reports the Israeli business newspaper Globes.

The report reveals that Israeli companies Gibor Sport, Leader Investments, and Resido sold their stakes in Playtech’s parent company, NAV New Age Investments, for only a few million shekels losing out on a current opportunity that could rake in millions.

The report goes on to name the major Israeli shareholders in these companies, commenting that they will see little if any reward from the forthcoming IPO, but could have made huge profits from their holdings in Playtech had they believed in the company’s future.

Eitan Eldar and Roi Gil of Gibor Sports, Itschak Shrem, Yair Fudim and Avigdor Kelner of the company bearing their names and Freddi Robinson of Resido all invested in Sagi’s NAV in 2000 but sold heir holdings in 2001-2002 for relatively low profits.

Eldar and Gil sold their 11.5 percent of NAV to Sagi for 8.5 million Israeli shekels. At today’s potential that would be worth an estimated $60 million, giving a hypothetical loss to the two of some 300 million Israeli shekels.

Globes reports that three months after Gil and Eldar sold their NAV stakes, Freddi Robinson followed suit. He sold his 5 percent stake in the company to Sagi for 3.9 million shekels. Robinson held the shares through Resido, which would have indirectly owned Playtech shares worth $30 million, giving a theoretical loss of 130 million shekels.

Shrem, Fudim, and Kelner were the last to sell their 3-4 percent stake in NAV, again to Sagi for 2.3 million shekels, and would have indirectly owned Playtech shares worth $20 million today. The theoretical loss is 90 million shekels.

Globes speculates that the Playtech IPO has the potential to make Teddy Sagi one of Israel’s richest men. Sagi’s NAV New Age Investments Ltd. Controls a 68 percent stake in Playtech, according to a 2002 valuation. When the company goes public on the London Stock Exchange next month at a value of $800-900 million, Sagi will reportedly make $90-120 million from the issue, still retaining shares worth $370-400 million.

Is the USA on a collision course with the World Trade Organisation?

The launch last week of the Internet Gambling Prohibition Act by Reps. Goodlatte and Boucher, and other legislation reported to be about to enter the US lawmaking system could put the United States on a collision course with a World Trade Organisation already eying the Americans over the hotly contested Antigua online gambling dispute.

If the Bill passes and impacts offshore gaming it may be in contravention of the WTO ruling regarding the prohibition of Internet gambling regardless of whether the servers are located in the US or outside of it, says the BBC, which claims that the bill will put the US on a collision course with the WTO, which has ruled that the US "...must not interfere with online gambling sites based overseas."

If the bill passes, the US could be subject to WTO sanctions come April for not bringing its laws into compliance with the WTO ruling.

Antigua has already protested the new U.S. efforts to outlaw Internet gambling and complained the United States had done nothing to implement a World Trade Organisation ruling against current restrictions. In a letter to U.S. Trade Representative Rob Portman released last Friday, Antigua's ambassador to the WTO, John Ashe, expressed concern about two U.S. legislative proposals to outlaw Internet gambling.

"Each of the bills is in key respects expressly contrary to the rulings and the recommendations of the Dispute Settlement Body of the World Trade Organization," Ashe said. He also complained that the United States had made no move to comply with the April 2005 ruling.

Sponsors of the 'Internet Gambling Prohibition Act,' which seeks to update the antiquated 'Wire Act' claim that it was narrowly defeated in previous incarnations due to the influence of disgraced lobbyist Jack Abramoff. That's debateable - just last week the chief of the American Gaming Association, Frank Fahrenkopf pointed out in an interview that up until the media blitz started, very few people had even heard of Abramoff, let alone considered him a top lobbyist.

Nevertheless, Goodlatte was damning in his indictment of the disgraced Abramoff, saying: "I have previously introduced similar legislation in both the 106th and 107th Congresses only to have them both derailed by Jack Abramoff's campaign of misinformation. Jack Abramoff's total disregard for the legislative process has allowed Internet gambling to continue thriving into what is now a twelve billion-dollar business which not only hurts individuals and their families but makes the economy suffer by draining billions of dollars from the United States and serves as a vehicle for money laundering."

The last part of that statement is arguable, too in light of the repeated pleas of large Internet betting companies to be legalised, regulated and taxed on US soil. And the old "money laundering and terrorist funding" allegation has repeatedly been disproved.

The new law as it now stands would be absolutely explicit - any gambling using the Internet is illegal in the US. Additionally, Goodlatte seeks to target US-facing offshore gambling sites by making official the ban on accepting credit cards, electronic funds transfers, or checks from US players. Banks and other American financial institutions have been imposing their own ban for some time, but this will certainly turn the screws tighter if it passes. Penalties for violations have been raised from two to five years in jail.

The Bill apparently seeks to avoid previous pitfalls that have generated opposition. For example, it does not seek to overthrow or limit the rights of individual states to authorise gambling within their borders. That would appear inconsistent, because if the goal is to stop money from being lost and laundered to 'shady outfits' based offshore, why is Internet gambling banned within the US as well? If the reason is to save the minority of citizens who are prone to addictive behavior, why do legal commercials run on TV every night encouraging citizens to visit Vegas?

Previous attempts have been bedevilled by wheeling and dealing over exemptions for vested interests in other gambling sectors (such as Indian gaming and horse racing) and politico-religious groupings. Whilst these might not necessarily be friendly toward online gambling per se, they have their own interests to protect and this has been an important factor in the past.

The progress of the current banning attempt, and those for and agin' it is going to make very interesting reading in the weeks and probably months ahead.

30 million U.S. online gamblers are a major impediment to banning

Morgan Stanley, one of the top international business services groups has issued an objective analysis of the new moves in the USA to ban internet gambling, coming to the conclusion that it is unlikely that bans will come about in the next 12 to 18 months at least.

Surveying the three seperate legislative attempts in process from Reps.Goodlatte, Leach and Sen Jon Kyl, the report examines the effects of state vs federal authority, lobbying and "carve out" efforts from a wide range of self-interested audiences, the history of previously failed attempts going back a decade, political timing and the fact that 2006 has the fewest ever Congressional days before November elections.

In relation to these forthcoming elections, the report notes that with Nielsen NetRating numbers indicating 30 million or more American online gamblers, these potentially unpopular proposals may well face a lack of political support. Summing up, the authors say that an "Adverse regulatory outcome is unlikely."

Considering the financial contraints under consideration, the report notes that U.S. financial institutions introduced these in a private and de facto sense some two years ago, with credit card financing dropping from 90 percent to less than 50 percent, and alternative methods appearing that resulted in the industry continuing to grow.

In the event of the proposals becoming law, there would also be a 12 month lag time to enact the new law, and difficulties in its enforcement, especially if this involved interference in access to the Internet for Americans should an ISP blocking strategy be adopted. The report quotes Sen. Kyl himself as saying, "Online gambling would be a difficult kind of activity to regulate, because we don't have jurisdiction over the people abroad who are doing it."

The report also notes the recent WTO rulings and the still outstanding amendments to horse racing betting over the Internet if the US is to be consistent with its claim that it objects to online gambling on moral grounds.

Quoting CCA statistics, the report reveals that the global industry is expected to turn revenues of $15 billion in 2006 and more going forward, with 80 nations outside the US, including Great Britain licensing operators and 300 companies with over 2 000 sites.

"Ultimately, we think that the size and scale of the industry will dominate the attempts to moralise and prohibit," the authors opine. "It is inconsistent with its popularity to ban online gambling."

The report touches on regulatory moves within the industry, saying: "Operators have gone to great lengths to legitimise the industry, including initiatives such as eCOGRA, with measures to limit problem gambling, increased security and identity checks, a full audit trail to eradicate money laundering and promoting websites such as Gamcare."

Mention is also made of the Bet On Sports initiative to prove there are no links between online gambling and money laundering.

Concluding that the US legal scene is likely to remain "a grey area" for at least the next 18 to 24 months, the report calls attention to developments in the UK, pointing out that online gambling is regarded in that country as a "legitimate leisure activity" to be regulated, and that this view will predominate internationally in time.

Minnesota horse race promoters want to use the Internet

With the latest US attempts to ban online gambling just launched, and the WTO dispute still calling for the horse racing exemptions in US law to be addressed by April 3, this is possibly not the best time for horse racing firms to try and get internet betting exemptions.

That hasn'r stopped the Minnesota horse racing fraternity, which is exploring ways to give Canterbury Park access to the lucrative world of online betting on races.

Rep. Andy Westerberg, said he intends to introduce a bill authorising, regulating and taxing online betting on horses. But even Westerberg predicts there is little chance of passing the bill this year.

He and members of the Minnesota Racing Commission met recently with Internet bookies to discuss the business.

Advocates of the horse racing industry say the debate is not about expanding gambling. Instead, they argue it would merely ensure that state government and the local racing industry get a cut of the profits.

Canterbury Park, in Shakopee, Minn., said it has seen about a $6 million decline in simulcasting wagers from 2004 to 2005. Simulcasting allows betting on races at other tracks as long as the bet is placed at the Minnesota track.

"It's mainly due to what has become an onslaught of available Internet gambling," said track President Randy Sampson.

Simulcasting provides winter income for Canterbury, but it is becoming particularly vulnerable to competition from online wagering because people can stay home and still bet. A harness track planned for Anoka County also would appear to benefit from legalised online betting.

Meanwhile, American Indian tribes are reacting cautiously to the proposal for legalised Internet gambling on horse racing. The tribes have helped sink other gambling proposals that would allow casino-style games at the track.

Hotels sold, British group now focuses on online gambling and Asian and European gaming opportunities

The UK Hilton group completed the formalities on its GBP 3.3 billion hotel sale to US Hilton this week, and immediately set about transforming itself into a bigger, stronger Ladbrokes gambling group

The group has re-branded itself as Ladbrokes - a pure gaming company using the Internet to exploit opportunities in Europe and Asia, reports Reuters.

"Through e-gaming we reach into 200 countries around the world, and there's the intention to push that even faster," outgoing Deputy Chief Executive Brian Wallace told the news service.

Hilton reported a 10 percent rise in full-year profit and said it would return up to 4.2 billion pounds to shareholders early in the second quarter following the hotel sale.

The Ladbrokes name will be registered this week and the Hilton Group title dropped.

Profit before tax rose 9.9 percent to GBP 413.9 million in 2005 and operating profit from online gaming nearly doubled to GBP 41.4 million. The group is currently valued at around GBP 6.1 billion.

"When we said four years ago this business could make 50 million, people laughed," Wallace said of the online gaming division. "Well, we're a long way towards that."

Rosemary Thorne, the new group finance director, said Ladbrokes was in a number of discussions for ventures in Europe and Asia.

"But these are very small acorns and not all of them will grow into big trees," she added.

Chris Bell, the chief executive of Ladbrokes, who now takes control of the group, said it would soon review the policy of not taking online bets from the United States, where the legality of online gaming remains ambiguous.

The potential profits offered by online gambling are phenomenal and, over the past few years, the smart money has turned to poker.

This trend has resulted in a boom that has transformed the game into an industry that rivals the early days of the dotcom gold rush.

According to Ladbrokes, an estimated GBP 36 million was staked on online poker sites every day in 2005, up 89 percent year on year. "Launching early [in the poker sector] was a key critical advantage," said Albert Tapper, general manager at Ladbrokes Poker.

"We launched in May 2002 and we were the first big name betting brand to launch online poker. We established 'liquidity' early on, which is the word used in the industry for having lots of players. Lots of players is critical because it means you can offer a range of tournaments and a good choice of cash games."

However, Tapper maintained that it is unfair to talk of online poker in terms of a boom which implies a bust just around the corner. Ladbroke's research suggests that the future for the market is bright, as its main audience is young players.

The company's report from January 2006 shows that 60 percent of players are under 30 years old and the average age is just 32. There are more 19 year olds than any other age year.

"I don't think it's right to say that poker is a bubble about to burst. There are a huge number of people playing; at peak times we'll be dealing 15,000 hands an hour and that's a lot of games," said Tapper.

Lee Ferris, poker marketing manager at sports betting firm Victor Chandler, backs up the argument that demand is leading the success and not the other way around.

"Some of the greatest dotcom successes - eBay, Amazon, online poker - have been as a result of the clever reinvention of a product or service repositioned properly for the online consumer," he said.

Eerie silence….

That’s what greets many customers when they have a problem at an online casino. It often seems that once it is clear a dispute exists, nobody is interested…and there is no excuse for it.

No excuse, because the systems and technology are on hand to accurately record, acknowledge and track complaint traffic and it needs only the will to merge this with good human customer care to develop a successful business relationship.

The majority of disputes could be resolved in a stress-free and timely manner through the simple act of communicating with the customer and explaining what is happening, whether it be a payout delay, a disqualification, a legitimate enquiry or any one of the many areas where friction with the customer can arise.

Where the ordinary customer service rep in the Support trenches lacks the authority or current information it is still possible to placate anxious clients by providing a working escalation route to a more senior company employee or manager. It is guaranteed to avoid hassles for everyone – but most importantly the player – almost every time.

Most players are in the main reasonable people with understandable concerns, and to ignore this is not only discourteous but dangerous from a lost business perspective. Sure, there are *difficult* customers who are hard to satisfy or naturally rude and aggressive, but this is a tiny minority of the players with problems.

This week has seen a number of cases where players and in a few cases mediators have simply been ignored despite several, and in some cases numerous attempts to establish a sensible dialogue with casinos to sort out perfectly resolvable issues.

If there’s one word worth repeating to operators this week it’s Communicate, Communicate and then Communicate again with your players – they are expensive to acquire and easy to lose.

All the bells and whistles on this new Poker Academy software

Edmonton, Canada-based poker software developer Poker Academy, has released Pro Texas Hold'em Version 2.5 - the first Texas Hold'em poker software game and training tool that allows its users to create, simulate, and host online multi-table tournaments of any structure.

Pro 2.5 also empowers users to analyse their game play from real world experiences by now being able to import hand histories from popular online poker rooms, including Party Poker, Poker Stars, and Paradise Poker.

“With poker tournaments the rage worldwide, for fun or for money, players of any skill level need help training to win at casinos, online poker rooms, or poker leagues,” said Kurt Lange, president and chief executive of Poker Academy.

“Our new version of Poker Academy Pro delivers that in spades. Players can design, simulate and save tourney structures from their favorite local casino or online poker site. We have empowered them with the tools to train to win without taking any risk.”

“Another compelling aspect of our multi-table tournament feature in Pro 2.5 is that individuals, organisations, or poker leagues can now host their own Holdem events online for free. To participate, one only needs to own a copy of our software. This is ideal for poker leagues who want to expand into the online world or for non-profit organizations interested in holding Texas Hold'em charity events via the Internet.”

As part of the update, Pro Texas Holdem 2.5 comes to market with other new and exciting additions. The Hand Evaluator window strength tab shows better simulation values, running through 100 000 simulation trials and calculating the results in terms of strength against 1-9 players.

Other distinguishing components include "Play and Learn" facilities enabling users to challenge themselves against advanced computer opponents with AI that learns and adapts to play, and opponents can be edited to mimic real-life players. Adjust aggressiveness, hand selection, odds estimation, and betting tendencies. Zip Play and Advanced Actions produce an intensified game play experience.

The Advisor function provides expert suggestions on when to bet, check, or fold, and how often, together with pop-up alerts that warn of potentially bad decisions. Messages explain why an action may be ineffective in the context of the current situation.

Supply the details of the desired game and the tournament clock feature will manage blind levels, breaks and payouts.

Once users are confident in their abilities, it's time for the Advanced AI which helps strengthen skills against heads-up specialist bots derived from the respected University of Alberta Poker Research Group. And talking about research, this package gives a complete history and alalytical capability that embraces every aspect of play.

Canada's latest womens poker champ outplays 249 competitors

Clarissa Hannem of Esquimalt took top honours and won $22,680.00 this week when she became Canada's first ever Women's Poker Classic champion.

Hannem out-manoeuvered and out-played 249 other womenpoker players to nab the top prize after about five hours of play in the $75,000 No Limit Texas Hold'em tournament held at Cascades Casino in Langley.

"It was great to play in a tournament for women only and to see so many women turning out to have a good time playing poker," said Hannem.

Friday, February 17, Limit Texas Hold'em kicked it all off at noon with a $37,500 prize pool. February 18 and February 19, No Limit Texas Hold 'em, the main event, started at noon and featured a $75,000 prize pool. The top 20 players in both the Limit and No Limit games finished in the money.

With over $112,000 up for grabs, Canada's first women's poker tournament made Canadian poker history and supported Breast Cancer research at the same time. Cascades Casino made a $25,000 donation, $50 for every registered participant to the Canadian Breast Cancer Foundation and Treasure Cove Casino & Hotel donated an additional $5,000. In total, over $30,000 went directly toward breast cancer research in British Columbia.

With 26 percent of American college males playing poker, here's a scheme that could have wide appeal

The marketing staff at Titan Poker has launched a campaign aimed at college poker players, starting with a series of tournaments in conjunction with Campusfood, a nation-wide network of restaurants in the USA. The concept is to provide innovative marketing to restaurant partners and offer online menus with interactive ordering to students.

University students who sign up at Titan Poker with a special bonus code provided by Campusfood will be eligible to play in a series of exclusive online freeroll poker tournaments. Winners will receive special Campusfood Cash coupons, redeemable for food orders at participating restaurants. A total of $20,000 in free food is on the table in the special inaugural Campusfood tournaments at Titan Poker, which will culminate in a major final on April 23.

And in March, Titan will stage a series of March Madness tournaments especially geared for college students. A special March Madness Poker website is to be launched allowing new players to download the Titan Poker software and register to represent their school in this special series.

During the month of March, Titan Poker will stage 64 qualifying tournaments to determine which players will represent their school in a special free March Madness Main Event online poker tournament. Winning players at this Main Event will win valuable prizes for themselves and their schools, including championship rings and jackets, laptop computers, iPod Nanos.... and cash to spend at CampusFood.

The March Madness tournaments will be offered to all registered Titan Poker players. Each player will be able to represent his school, or his alma mater, in the special tournament series leading up to the Main Event.

In a survey last year, the University of Pennsylvania found that 26 percent (and growing) of male US college students played poker to some extent.

GBP 56.2 million raised.

The original target that Excapsa had in mind (see previous InfoPowa reports) in raising cash through an IPO in London last Thursday was reportedly GBP 75 million. Although the result fell short of that, the company seems pleased enough with their debut, which brought in GBP 56.2 million.

“There is clearly investor appetite for quality companies in this sector,” said David Collins, head of corporate finance at Excapsa’s legal adviser, Berwin Leighton Paisner, whilst analysts were upbeat and described support for the listing as evidence of renewed interest and confidence in the industry.

The placing raised a total of GBP 56.2 million for the company, giving it a healthy market capitalisation on admission to the exchange of GBP 214.2 million. Company spokesmen said that GBP 26.2 million will be used to eliminate debt and provide additional working capital for the group going forward for possible acquisitions. The successful poker operation UltimateBet is one of the Excapsa subsidiaries.

CEO Jim Ryan said: “We are pleased with the strong investor response to our flotation, which will not only raise our corporate profile but enable Excapsa to maintain its total commitment to client service excellence and value creation.”

Good fourth quarter and full 2005 results announced

The Swedish gambling group Cherry, which recently rearranged itself into three seperate operations has reported good numbers for its fourth quarter and full 2005 year.

Sales for the quarter increasing 46 percent to Swedish kroner 136 million (about GBP 10 million) compared with the same period for 2004. SEK42 million flowed from the acquisition of online sportsbetting company Betsson. Over the 12-month period to the end of 2005 sales grew by 45 percent to SEK452 million, with Cherry Online and Net Entertainment bringing in SEK121 million.

Cherry's restructuring last year divided the group into three: Cherry Online, which includes gaming portal Betsson and CasinoEuro.com; Net Entertainment, a turnkey provider and gambling software developer; and gaming machines provider Cherry Casino. These three divisions will each be independently listed, Cherry’s board confirmed - the three business entities will be split into three independent listed companies.

Operating profits for the quarter were SEK 14 million, Net Entertainment reporting 60 percent increase in profit and Cherry Online SEK 8 million profit compared with a SEK 2.8 million loss for the same period in 2004. Operating profit for the 12 months period SEK 46 million with Cherry’s internet-related activities reporting an increase in operating margins of 25 percent.

Overall profits after tax were SEK 178 million, up by SEK 12 million on the previous year.

Highlights in the report included the announcement that Betsson had achieved and surpassed its annual objective of 200 000 registered customers by the end of 2005, with 242 000 registered players as of 31 December, although the number of active players was 36 000.

186 000 players were registered on Betsson's poker platform by end of 2005, a 28 percent increase compared with 145 500 at the end of Q3. The number of active poker players grew 47 percent to 30 900. The results from Betsson's mobile poker operation were also interesting, with Betsson signing up 2 100 customers for real money play.

Betting exchange and online casino numbers were encouraging, too: the number of betting exchange players rose by 32 percent to 4 300 by year-end and active casino players on the Betsson portal was 7 600 as the year came to a close, compared with 6 200 in September 2005. CasinoEuro player registrations reached 203 700, 8 300 signing up in the fourth quarter.

Revenue for Cherry’s online casinos was SEK 15 million for Q4 and SEK 48 million for the 12 months.

New aid for comparing betting exchanges

Betting exchange gamblers have a useful new tool this week following the launch of a new comparative platform by Global Gaming Technologies (GGT)

The company has launched what it claims is the first betting platform that allows consumers to compare the best prices on different betting exchanges, and to transact with one click across several exchanges.

Using a proprietary technology, GGT has developed a product that allows live feeds from numerous exchanges to be displayed, so customers can see where the best value bets are available. Subscribers can see the prices side by side before deciding which bets to place.

Top post for ex-Betfair money man

Remember Owen O'Donnell? He was the top financial man at Betfair between 2003 and 2005 before being replaced (to the surprise of many) and moving on to pastures greener, in the shape of King.com, an Internet skill gaming outfit.

O'Donnell has just been appointed chief financial officer at King, a post for which he is well qualified by training and experience, having worked in senior management positions for the Financial Times, A.C. Neilsen and Pearson plc before his move to Betfair in 2003.

He is widely attributed with doing much of the groundwork to support that business at a key stage of its development including reorganising the corporate structure, implementing financial planning and reporting systems and strengthening the control environment to help further growth.

PaddyPower to produce cover version

Thumbs up to the Paddy Poker poker marketers, who this week came up with a new distribution method for their poker software.

The Irish online casino, poker and sportsbetting group has inked a deal with Brandedmedia for the production of a promotional compact disc featuring its poker software in download form.

The discs will be inserted in the UK newspaper "The Times" on February 25, reaching an audience of millions of readers - the first time that a gaming promotional CD has been carried by a major national British newspaper, they claim.

Watch this space - full details on costs have not yet been released and could be considerable, and there is the risk of some adverse reaction from certain sectors of the public.

Caribbean island jurisdiction ups the ante in its fight with the USA

The recent introduction of more legislation designed to ban online gambling in the USA (see previous InfoPowa reports) seems to have spurred Antigua into protesting that the Americans have done little to meet the WTO rulings on its dispute with the US over online gambling.

The island government's WTO representative has formally protested at the current efforts to outlaw Internet gambling and complained that the United States has thus far done nothing to implement a World Trade Organisation ruling against its current restrictions.

Populated by 67 000 islanders, many of whom depend on offshore Internet gaming companies for their livlihood, Antigua and Barbuda has been trying to build up its Internet gambling industry as a way to make up for sharply declining tourism revenues.

In doing so, it has had to take the United States to the World Trade Organisation over federal laws that bar the placing of bets across state lines by electronic means. Antigua challenged that ban in 2003 as a violation of service sector commitments the United States made when the WTO was formed in 1995.

Both sides claimed victory after the WTO Appellate Body released a final decision in the case in April 2005.

In a letter to US Trade Representative Rob Portman, Antigua's ambassador to the WTO, John Ashe, expressed concern about two US legislative proposals to outlaw the $12 billion Internet gambling industry.

"Each of the bills is in key respects expressly contrary to the rulings and the recommendations of the Dispute Settlement Body of the World Trade Organization," Ashe said.

He also complained the United States had made no move to comply with the April 2005 ruling.

"As of today, with less than two months remaining on an 11-month and two week compliance period, to our knowledge no legislation has been introduced into the Congress that would seek to bring the United States into compliance," Ashe said.

Neena Moorjani, a spokeswoman for the US Trade Representative's office, said, "The US is exploring a number of different avenues to clarify there is no discrimination – even outside of legislation.

"The issue is a very narrow one. ... The time period for compliance has not yet expired," she said.

The United States argued in the WTO case that it never meant its services liberalisation to include gambling, and that WTO rules allowed states to restrict trade on moral grounds.

The Appellate Body accepted much of the U.S. reasoning, but said that when it came to betting on horse racing, there appeared to be discrimination between foreign and local operators, which violated trade rules and had to stop.

Italian moves to curtail online gambling criticised

The Italian government could be faced with some tough opposition to its recent decision to clamp down on Internet gambling through internet service providers (ISPs) judging by the hostile reaction to the announcement by major Brit gambling groups who are members of the Remote Gambling Association (RGA)

The Register reports this week that UK gaming companies are threatening to take legal action against Italian regulators unless they reverse recent changes which outlaw access to gaming sites outside Italy.

Italy's Ministry of Economy and Finance recently unveiled a law threatening to fine any Italian ISP which allows access to a list of gambling sites.

Last November the RGA pushed out a press release objecting to the at that time proposed changes, which are claimed to breach five categories of EC rules. Since then individual members of the RGA have been developing a dialogue with the Italians in attempts to head off a confrontation and possible legal action, but the RGA is likely to review its options at the end of this month following the latest Italian moves.

European Commission laws allow governments to restrict cross-border services on genuine moral grounds, but not due to external competition.

Legal advice taken by RGA

The fight by UK gambling companies against Italian government action banning online gambling by blocking sites from Italian ISPs seems to be gaining momentum.

News to hand this week is that the Remote Gambling Association (RGA), whose members include 888, Betfair and William Hill, is seeking legal advice after the Italian Ministry of Economy and Finance approved a law to fine ISPs allowing gamblers to access offshore sites.

Under the Italian Finance Act 2006, which came in to force on 1 January, Italian internet service providers could be fined each time players are allowed to bet with a 'blacklisted' company.

To make the law effective with surprising speed, a number of decrees were passed earlier in Rome, requiring ISPs to block access to around 500 sites on pain of fines of up to GBP 120 000.

But three years ago, a European court ruled that member states are not allowed to block cross-border gambling services other than on grounds of moral objections. According to the RGA, the Italian decrees should have been approved by the EC prior to the law coming into effect.

The RGA has asked the EC to prevent the restrictions as it argues Italian consumers will suffer from reduced competition.

Thus far the Italian Ministry of Economy and Finance has not commented on the RGA statement.

684 Internet gaming sites to be blocked by Italian ISPs - but counter moves are in progress

Maltese officials were clearly disturbed this week as the Italian bid to ban online gaming started to move into gear with plans to block 684 internet sites, among them Maltese licensed companies despite the fellow European Community status of the island.

It now seems that the Italians are using the fraudulent acquisition of passwords and credit card details - commonly known as phishing - as one of their rationales for blocking internet gaming sites from the end of this week. The Italian state plans to introduce the ban on Friday, blocking 684 internet gaming sites through ISPs despite the lack of hard evidence to suggest a connection.

All 100 + online gaming sites licensed in Malta are included in the list, which was put into force following Italy’s 2006 Budget, to block all online gaming sites which are not licensed in Italy. The law stipulates that ISPs in Italy should block the websites, otherwise they will be subjected to heavy fines.

The Italians have threatened ISPs with a daily fine of EUR180,000 in a unilateral move that has been described as a case of protectionism.

According to the UK's Financial Times, the legal director of gaming company Betfair, which has a Maltese licence, said that Italy’s move had unified the British gambling heavyweights to take legal action, leading to the hiring of specialist legal firm Freshfields.

The Maltese Lotteries and Gaming Authority (LGA) is taking a waiting posture, saying that there are “a number of unclear factors” which the Italian regulatory body, the AAMS, needs to clarify before it will involve itself in the dispute, although it will be taking steps to ensure Maltese licensees are not affected by the law.

LGA spokesmen said that it has information that the list of banned websites will be blocked by an access list on ISP routers, although when this was tested last week “...two major ADSL networks in Italy went down”. Subsequent reports claimed that the blockading of Maltese sites would probably take place in Milan, through which all Malta’s international IP traffic passes.

Another report suggested this would constitute a problem difficult to resolve that might require tunnelling through a foreign proxy or VPN tunnel outside Malta. There were also reports that the LGA is seeking to lease a server in London Docklands or Vienna.

The LGA has apparently revealed that a website will soon appear with links to all licensees. Each link will go through a "web anonymiser" so the IP address is different from the original website. It instructed each ISP to make a number of IP addresses available as it is possible the anonymous proxy will also be blocked.

One shop stop for gamblers

The much anticipated Party Gaming integrated online gambling site, incorporating casino and poker gaming in a "one player account" site was officially launched this week.

Reuters reported that the major Internet poker and casino firm had opened its new facility which seeks to exploit the trend of having a variety of different gamestyles and genres concentrated at one venue with a common e-wallet facility for the convenience of players.

"The platform enables customers to click through seamlessly from PartyPoker.com to the new PartyCasino.com and vice versa without having to log in separately and without the need to deposit money into separate accounts," a company spokesman said in a statement.

The development is widely viewed by analysts as essential to future organic growth, and enables cross-marketing. Party Gaming has literally millions of players on its books.

Finance chief says new initiative will make wider selection of games available

Sportingbet plans to launch a handful of casino games this year to expand its portfolio of sports betting, poker and roulette, says finance chief Andrew McIver whilst briefing press on the group's latest numbers.

Pretax profits leapt 72 percent to GBP 27million in the second quarter, and the company said it might beat full-year forecasts of GBP 103 million in operating profits.

Without giving details on likely software providers or specific games. McIver said the games offerings would be expanded to fall into the benefits of Sportingbet's "shared purse" system, which allows players to switch between games.

The group played down the risk of a US clampdown on online gambling. A prohibition bill was introduced to Congress last week, which would update existing laws to outlaw bets taken over the internet. It also would require credit card companies to disallow money transfers going to offshore gambling sites.

But Sportingbet said the bill sat awkwardly with the US stated policy on internet matters and pointed out that Congress might be reluctant to give full debating time to the bill in a year shortened by senatorial elections in November.

Shareholders like the merge

Last November, FUNTech CEO Lorne Abonie announced that Liberty Media would be taking over the group (see previous InfoPowa reports) subject to shareholder approval.

This week the shareholders voted unanimously in favour of the takeover bid for in a deal valued at US$195 million when it was. Under the multi-stage deal, Liberty will invest $50 million US in FunTech by purchasing 10.5 million of its common shares directly from its treasury. The strong financial position which will enable further development, expansion and acquisitions by the skill gaming group.

In the second part of the deal, Liberty will issue a tender offer to buy 23.2 million existing shares at 360 pence to take its total ownership in a recapitalised Fun to 51 percent.

Fun Technologies was created in June 2002 by two of the cofounders of CryptoLogic and has gone from strength to strength in the burgeoning skill gaming sector, signing up some of the biggest names in the business as clients.

Six tough days of poker, 700 opponents including famous names...

Alan Goehring, a relative newcomer to the world of big-name poker has made an impression this week, taking home the $2.4 million first prize in a tough six day tournament that attracted some of the best and biggest poker players anywhere.

The L.A. Poker Classic at Commerce Casino was the focus of professional poker and Hollywood celebrities alike, and some 700 players paid up the stiff $10,000 buy-in for this classic No-Limit Texas Hold 'em tournament.

Contestants included the likes of Phil Ivey, Men “The Master" Nguyen, Michael "The Grinder" Mizrachi, Daniel Negreanu, Phil Hellmuth, Jennifer Harman, Barry Greenstein, Antonio “The Magician" Esfandiari, Michael Gracz, Erick Lindgren, Mike “The Mouth" Matusow, John Juanda, and Ted Forrest.

Among the cenebrity roster was Shannon Elizabeth, Gabe “Mr. Kotter" Kaplan, Los Angeles Lakers owner Dr. Jerry Buss, Jennifer Tilly, and James Woods.

In tough games, 85 percent of the player pool was out of the running by the end of Day 2, leaving some 100 players to battle through another four days of hard-edged poker before the six final table players emerged.

Goehring and Daniel Quach were the last men standing in a final that took only an hour to decide. For his second place finish, Quach claimed $1.2 million, while Goehring took home $2.4 million and a $25K seat at the WPT Championships at the Bellagio in April.

New ventures by Pokershare planned

Fresh from its recent successful IPO in London, software developer Excapsa has settled its differences with Pokershare in a confidential agreement.

The two companies have been at loggerheads since Excapsa excluded the player-profit participation poker site from its network back in November 2005, with Pokershare threatening to take the litigation route.

A spokesman for Playit Ownit Limited, the operators of PokerShare.com, said the company was pleased that an amicable resolution of its dispute with Excapsa Software Inc and its subsidiary, Game Theory Limited had been reached.

Commenting on ending the dispute, the CEO of PokerShare.com, Lucan Toh said: "We're very pleased to have resolved our differences with Excapsa Software Inc. and Game Theory Limited and wish them well. We consider them to be a very well run company and we will certainly be investing ourselves.”

PokerShare will be re-launching with new and as yet unspecified software in early March and Max Wright, Director of Gaming said: "We are in tip-top shape for our return to the market and are very pleased with our new partners. We fully expect to regain our status as the most promising site on the web."

Following the re-launch of its poker site, PokerShare will open an online casino in April 2006 to be called CasinoShare.com.

Free poker and games training offered online

It’s not just the big poker site operators who are offering tuition in the game. This week a new site was advertising its free of charge educational services at Online Gambling Training.com, which has launched a new professional level learning centre for popular casino games like Poker, Blackjack, Craps, Baccarat, Keno, Slot Machines and Roulette.

A spokesman for the site said the objective is to improve the gambler’s capacity to win at popular casino games, using a free service that is available to anyone in the world with Internet access.

Joaquin Reveron, managing director of Online Gambling Training said, “Online casino gambling is growing exponentially and knowing how and where to play are the two vital keys to winning at online casinos.

Shana Hiatt replacement is a winner

The new hostess for World Poker Tour and the Travel Channel partnered poker events is talented, professionally qualified and a stunner, too - an attractive personality who will surely be popular with the huge audiences that watch the televised tournaments.

Courtney Friel (25) replaces previous hostess Shana Hiatt this (fourth) season after an extensive search for the right combination of intelligence, personality and beauty that Friel won hands down.

Originally from Valley Forge, she's been a Californian since moving to LA in 1999, and is a graduate of San Diego State University where she successfully studied a BA in Political Science with minors in Broadcast Journalism.

Following graduation she moved into the high pressure world of network television and journalism with Channel One in Los Angeles, working as an anchor and reporter in Jackson, TN, and in the newsroom with KPSP in Palm Springs, CA. A highly competent writer and interviewer, her entertainment reportage has been widely used, including E! Entertainment Television, Nickelodeon, EBTV Gaming and other shows.

"I've done pretty much everything when it comes to reporting. I've lugged my own cameras, edited my own tape, even operated the teleprompter with my foot...just everything! All these skills, and more, I am hoping to bring to the fans of the WPT during the broadcasts," she says.

WPT put Friel right to work, sending her to the WPT Poker Boot Camp to better understand the game, and now she's rarin' to combine her new skills with her established experience for the popular WPT series.

New and unique game from Zone4Play

Interactive software developer Zone4Play has released what it claims is an innovative and unique new game suitable for multiple e-gaming platforms in the poker genre branded Face-Up Hold’em.

Pointing out that the online poker market has grown to an industry that generated $4 billion in revenues in 2005, the Zone4Play release says that the new game, which has a patent pending, is based on the popular Texas Hold’em variant, but with a fixed odd twist.

The game will be available on all the Zone4Play interactive platforms in the UK, including mobile, Internet, interactive TV and in particular participation TV by the end of the second quarter of 2006, accessing 10 million households in the UK, and enabling for the first time TV viewers (interactive and broadcast) to play fixed odds poker. In addition, it will enable TV viewers to participate in poker TV shows by betting during each hand on the results of the game.

"We are excited about the introduction of this new game," said Shimon Citron, CEO of Zone4Play. "We are constantly looking to expand our selection of e-gaming solutions to provide maximum client satisfaction for our partners."

3.9 million players placed GBP 290 million in bets and player 339 million poker games

A buoyant Sportingbet, Britain's second-biggest online gaming group, reported a 72 percent increase in second quarter pretax profit this week and said poker commission rose 107 percent.

Second quarter pretax profit was GBP 27 million in the three months to January 31, said Sportingbet, which owns the Paradise Poker and Sportsbook websites.

CEO Nigel Payne said the group's "shared purse" technology, which allows players to switch easily between games, was bearing fruit, with over 23,000 of its U.S. sports betting customers playing poker in the second quarter, up 30 percent on the first quarter.

"We now have over 3.9 million registered customers, who placed 290 million sports and gaming bets in the first half of this year and played 339 million games of poker," said Payne.

"Should the current level of strong performance continue throughout the second half of the year, then the board intends to re-invest any such excess in furthering the organic growth of the business," Payne revealed.

Based on current shareprice, the group is valued at about GBP 1.7 billion.

Internet gaming company accused of failing to honour affiliate marketing relationships

Party Gaming's recent acquisition of Empire Online, and it's intention to integrate the players into its database, is creating anger in the affiliate marketing sector due to a refusal to recognise former Empire Online affiliate deals.

Lou Fabiano, editor and president of the affiliate resource site Casino Affiliate Programs.com issued a press release this week suspending the Party Partners certification by his organisation. The move comes in response to the acquisition terms outlined for Empire Online as the parent of EmpirePoker.com, a former PartyGaming licensee.

Referring to the Empire Online acquisition, the release says that the $250 million deal announced on February 15, 2006 includes migrating Empire Poker players to a consolidated platform that no longer honors the affiliate relationship that initiated the player relationship.

Under the new terms, affiliates who had participated in the Empire Online affiliate program will receive no compensation or consideration for the thousands of players they acquired for EmpirePoker.com. Fabiano says that this is clearly in violation of the terms and conditions affiliates had agreed to with Empire Online whereby they would receive compensation on the sales and value generated by their players for the life of their association with the poker room.

PartyPartners was well aware that a substantial number of the players at EmpirePoker.com were referred by affiliate webmasters and that an agreement to compensate the affiliates for these players was in effect at the time of purchase.

Fabiano said: “As a result of this predatory action by Party Partners, CasinoAffiliatePrograms.com is left with no alternative but to suspend their certification at CAP and advise all affiliates to cease promotion of all PartyGaming clients until a satisfactory resolution to this problem can be worked out. Our affiliate webmasters have made it clear that they want a fair compensation plan that recognises and rewards their efforts as previously agreed upon.

"It would be relatively easy for Party Partners to transfer all existing players and affiliate accounts to the PartyGaming platform and honor the existing terms and conditions. We are hopeful that PartyPartners will do the right thing and properly include their affiliate partners.”

New survey results say Europe is the future

Irish research outfit Research and Markets has launched their study of poker - online and off - with some interesting facts and predictions.

Online Poker - Driving Gambling to New Heights is a detailed industry report that includes the results of a survey conducted among industry experts and covers many well known online poker sites.

The company says that gambling reinvents itself constantly, and online poker is the product that seems to be the current guarantor of future growth as the perfect symbiosis of two mega trends in gambling: online gambling and poker.

"What began as triumphant advance in the US is now leading to a global poker wave on the Internet with tremendous potential," say the authors, giving the following examples to substantiate their claims:

* The amount gambled on poker websites around the world is estimated to be more than US $ 60 billion for 2005.

* Over 60 percent of industry experts surveyed believe that online poker will be the dominant offer in online gambling in 2-3 years.

* 75 percent of the industry experts surveyed believe that the global annual rake/commission in the next 2-3 years will be greater than US $ 4 billion.

An important reason for the rapid growth of online poker is the increasing number of successful TV shows featuring poker. There are many examples of successful poker TV coverage, among them the World Series of Poker on ESPN, Celebrity Poker on Bravo, and the European Poker Tour on Eurosport.

Online poker has also gone up in the estimation of the global business and financial community, with growing numbers of successful gambling groups adding online poker to their product offerings.

On the downside for new entrants, the online poker market will become a tougher in the future. With decreasing revenues per active player and growing competition, poker operators have to find successful strategies for the future.

Industry insiders surveyed confirmed the importance of large networks, and predicted that consolidation would be the consequence of more big betting groups expanding their poker interests or entering the sector.

When it comes to geographical expansion, Europe seems to be the place to go; 52 percent of the experts believe that Europe offers the greatest future potential for online poker.

Hispanic gaming

Las Vegas, appropriately, is the venue for the inaugural Hispanic Gaming Summit, presented by Ascend Media Gaming Group, and scheduled for place July 18 at Paris Casino. The event conveniently precedes the Third Annual Casino Marketing Conference.

The Hispanic Gaming Summit will address the opportunities and responsibilities that the fast-growing Hispanic population presents to gaming operators across the United States.

Topics addressed in conference sessions include an in-depth look at the demographic and cultural aspects of the substantial Hispanic market, case studies on effective marketing to Hispanics by gaming companies, and how to build and maintain constructive and mutually rewarding relations with the Hispanic community.

Harrison & Montoya Associates, a Santa Ana, Calif., based firm that has extensive experience in both the U.S. Hispanic market and the gaming industry will act as co-presenter of the Summit. Harrison & Montoya is led by Charles Harrison, who has experience of more than 15 years in the gaming industry – including Managing Director North America for the Spanish gaming giant CIRSA/UNIDESA – and his partner, Martha Montoya, who is recognized by Hispanic Business magazine as one of the 100 most influential Hispanic business leaders in America.

Blames failure of previous attempts on lobbyist "misinformation"

Arguably America's most stubborn legislator, Representative Bob Goodlatte is on the prohibition trail again with a media release announcing that he plans to launch yet another anti-online gaming Bill this week.

A release from the politician's office says that he will reintroduce a bill this week that would prohibit Internet gambling, a fast-growing industry currently valued at about $12 billion.

Republican Goodlatte first introduced legislation to ban online gambling almost 10 years ago and has faced successive defeats on the measures.

A spokesperson from his office said that in 2000 and 2001 his Bills at that time had strong support in the House but were unexpectedly derailed due in part to efforts by Republican lobbyist Jack Abramoff, who represented gambling interests and was accused of misinformation, according to the spokeswoman.

Abramoff pleaded guilty to fraud charges in early January 2006 and is now cooperating with prosecutors in a corruption probe that could implicate lawmakers and officials across Washington.

Recent reports (see earlier InfoPowa bulletins) have confirmed that another anti-gaming politician, Jon Kyl and his staff have been working in close cooperation with fellow legislator Jim Leach, who also has a Bill with similar objectives.

Goodlatte's spokeswoman said details about the new bill would be released shortly. Other sponsors of the bill will be fellow Virginia Republicans Rick Boucher and Frank Wolf, she said. The previous version of Goodlatte's bill would make it illegal to use the Internet for gambling and give law enforcement officials the authority to stop credit card payments to offshore Internet gambling sites.

The Goodlatte prohibition Bills have differed from efforts by Leach and Sen. Jon Kyl in that they seek to amend the federal Wire Act to specify unequivocally that remote forms of gambling are illegal. The efforts of Leach and Kyl focus instead on preventing the financial transactions that facilitate online gambling from taking place.

The media alert from Goodlatte's office claims that: "Abramoff's total disregard for the legislative process has allowed Internet gambling to continue thriving and it's now a $12 billion industry. The Internet Gambling Prohibition Act is vital to protect our children and communities from the problems of addiction, crime, bankruptcy and family difficulties that come from gambling."

Shares in two European gaming companies, PartyGaming and 888 Holdings fell briefly in Tuesday trading due to concerns about new U.S. legislation, according to traders.

STOP PRESS

Good to his word, Rep. Goodlatte, sponsored by Rep. Boucher re-introduced the Internet Gambling Prohibition Act amid wide publicity as we went to press this week.

The politicians said they are reintroducing the law to crack down on “the growing problem” of illegal, offshore gambling, as well as illegal gambling that crosses state lines over phone connections and the Internet.

Reps. Goodlatte and Boucher have previously proposed the legislation, but it went down to defeat two years ago. The congressmen blame the lobbying efforts of Jack Abramoff, a political lobbyist recently indicted for influence peddling, for the bill’s previous defeats when the legislation received support from more than 60 percent of the House of Representatives - 245 votes in favor and 170 votes against - but lacked the two-thirds majority required for passage. The bill required a two-thirds vote because it was handled under a special procedure.

The congressmen have referred the proposed legislation to the House Judiciary Committee, of which both Reps. Goodlatte and Boucher are members. “We already have more than 100 co-sponsors and I think this bill will be passed in a couple of months,” said Rep. Boucher.

The Internet Gambling Prohibition Act does not attempt to override state regulations on gambling within their borders. “Federal law preempts state law where they are inconsistent,” said Rep. Boucher. “But if they are consistent, state law can continue to operate.”

The Goodlatte-Boucher bill targets the financial settlement part of wagering transactions by prohibiting gambling enterprises from accepting certain forms of payment, including credit cards, checks, and wire and Internet transfers, to satisfy gambling debts.

“We are basically saying that one may not operate a gambling enterprise using the Internet, and we are giving the power to law enforcement to seek injunctions with respect to those enterprises, including the financial settlement process,” said Rep. Boucher.

Rumours are true - Israeli owned firm plans IPO in London

The rumoured London listing of turnkey provider Playtech was confirmed this (Friday) morning by a company spokesman, who said that his company hoped the shares would be placed with institutional investors by the end of March.

The spokesman confirmed that Playtech plans to raise GBP 175 million in a London stock market flotation that will value it around GBP 550 million.

The firm, majority-owned by Israeli internet-gaming entrepreneur Teddy Sagi, counts the Tote, Bet365 and BetFred among its clients and is the latest in a series of online gambling firms to opt for a London listing. Yesterday, Excapa Software, which also makes online poker software, floated on London's junior AIM market and saw its shares rise 5 percent in early trade.

Cyprus-registered Playtech said in a statement it made sales of GBP 27.4 million and a post-tax profit of GBP 20.5 million for the financial year to December 31, 2005.

Collins Stewart has been appointed as sole bookrunner, nominated advisor and joint broker. Seymour Pierce is joint broker.

US$ 250 million cash deal will assuage Empire's hurt feelings and help European and Asian expansion

The bitter Party Gaming vs Empire Poker feuding came to an end this week with the announcement that Party is to pay $250 million (GBP 144 million) in cash to Empire Online to settle litigation between the online gambling companies. The deal will in effect see Party Gaming acquiring the Empire sites that originally fed its operation.

The two companies had been locked in dispute since last December when Party Gaming switched players to an exclusive and improved version of its site, leaving Empire skins on the old platform and detrimentally affecting the smaller company's profits.

Empire, which now uses its own Noble Poker brand, said it would "consider carefully" how to use the $250 million windfall, but CEO Noam Lanir hinted that it may be used to fuel expansion plans.

“This was a tough-but-necessary period in our development; we did not give up and we emerged stronger,” said Lanir, who founded Empire Online. “We anticipate $37 million in profit this year from our existing business. The PartyGaming settlement will help support our efforts to enter into the European and Far Eastern Markets.”

Empire Online reported positive results in the fourth quarter of 2005, due in part to the success of their other online properties, Club Dice Casino and Noble Poker.

Party Gaming's announcement said that there were a number of advantages to the settlement, including:

* Acquisition of the EmpirePoker.com skin

* Further consolidation of the group’s strong market position in online gaming

* Conclusion of the skin strategy ahead of launch of fully-integrated, multi-gaming platform

* It ensured the withdrawal of all legal claims by Empire Online Limited

* Expected to be earnings enhancing in the current financial year

Richard Segal, Chief Executive of PartyGaming, said: “This acquisition brings our skins strategy to a close and consolidates our leading position in online poker ahead of the launch of the fully-integrated, Party-branded platform. The introduction of Blackjack last October marked the beginning of our cross-selling strategy; the integrated platform will enable PartyGaming to take the cross-selling of games to a new level.”

Long running plans to restrict ISPs being introduced this week

The Italian government's crackdown on illegal gambling websites, long the subject of discussion and debate appears to be picking up momentum according to media reports from that country.

So far, the government has banned a few sites that were not complying with domestic laws and only allowed those with formal authorisation to operate online.

In a Feb. 13 press release, AAMS, the governmental agency in charge of controlling state monopolies, said starting February 24, some 517 "illegal" or "unauthorised" gambling Web sites are going to be obscured by an ISP level filter so that Italian Internet users will not be able to connect to them.

The providers not complying with the law will be fined 30,000 to 180,000 euros (U.S.$35,000 to $210,000).

AAMS Director Giorgio Tino said the decree is designed to "...safeguard consumers, public order and the competitive system."

Opposition is likely to mount. The magazine Punto Informatico has already asked why the "...freedom of the Italian Internet user to surf the Web at will" hadn't been mentioned in the official documents announcing the measures.

AGA chief gets 1.25 million a year

According to the Washington based National Journal, the annual salary of the chief lobbyist for Nevada casinos has increased 19 percent in two years and is now more than $1 million, with a total compensation package that exceeds $1.25 million per year.

Frank Fahrenkopf, president of the American Gaming Association, ranks 16th in salary and 23rd in total compensation among Washington lobbyists, the survey said.

The survey was based on reports filed with the Internal Revenue Service or the Labor Department for 2003 and 2004. Revenue for the American Gaming Association, which was founded in 1995, was about $7.2 million.

Fahrenkopf (66) declined to give his current salary. He said the board of directors of the gaming association usually determines his salary at its December meeting.

"I'm not going to comment on that. I'm wondering what the compensation of your publisher is. What's your editor's compensation? What's your compensation?" Fahrenkopf said.

Fahrenkopf's salary far exceeds that of the president of the United States -- $400,000 -- and those for members of Congress -- $165,200.

Fahrenkopf acknowledged he is concerned about the potential effect of the scandal surrounding lobbyist Jack Abramoff. After pleading guilty last month to three felonies in a fraud and bribery case, Abramoff is cooperating in a federal inquiry of corruption in Congress.

"He's being portrayed as the number one lobbyist in Washington, and before this scandal broke, nine out of 10 people in this city never heard of Abramoff," Fahrenkopf said. "Someone in the media really should focus on the 99.9 percent of lobbyists who follow the law, are very hard working and educate legislators on the (Capitol) Hill."

Jack Valenti, who retired in 2004 as the chief lobbyist for the Motion Picture Association of America, led all lobbyists in the survey with a compensation package of more than $11 million. Terrence McDermott, the top lobbyist for the National Association of Realtors, received the highest annual salary among lobbyists -- $2,633,204.

Spin 3 mobile games players can now shoot for millions

Microgaming's top mobile technology provider, Spin3 announced this week that its selection of games will rise to 8 with the new release of a major progressive capable of delivering multi-million dollar jackpots.

Expanding Spin3’s GameWire V2 suite, Major Millions is a three line progressive video slot game now available for registered adults to download onto their mobile phones. Bets start as low as GBP 1 per spin, and by placing the maximum bet of GBP 3 per spin, players are eligible to win a progressive jackpot in excess of GBP 250,000. And this jackpot can grow to over GBP 1million.

Major Millions is the third progressive slot game within the GameWire System, joining Treasure Nile and Fruit Fiesta. As with these two games, Major Millions accumulates deposits from players at all of the participating casinos where Microgaming progressive jackpot games are offered to create a single, giant jackpot.

“Progressive jackpots are proving to be very popular with our customer base and a distinguishing factor between our operators and others in the industry,” said Matti Zinder, CEO, Spin3. “We’ve rolled out Major Millions, our third progressive jackpot game within the GameWire system, to meet this growing demand and continue to stay ahead of the industry curve. This addition should demonstrate Spin3’s ongoing commitment to develop innovative products for the mobile gaming market!”

All eight classic games of the GameWire V2 system (Roulette, Blackjack, Video Poker, Double Magic Slot, Scratch Card, Treasure Nile, Fruit Fiesta and Major Millions) are now available for download at Wild Jack Mobile Casino.

Flat rate will please many operators - but still no formal online gambling legislation

AM Costa Rica reports from the South American country this week that the Asamblea Legislativa has agreed to a special tax deal for gambling enterprises in a new tax plan.

Distinct from other busnesses that will be taxed on their incomes, sportsbooks operating on Costa Rican soil will pay a flat fee, ranging from 13 million colons ($26,000) to 24 million colons ($48,000), depending on the number of employees.

Between 5,000 to 7,000 Costa Ricans are believed to be employed in sportbook enterprises and many of these have studied English and computer literacy to take up emplyment with the gambling operations and would be left jobless if these companies went elsewhere, said the legislator proposing the tax plan.

The motion, if finalised with the tax plan, would allow sportsbook companies to open checking accounts in Costa Rica, something they cannot now do. Typically the betting proceeds are sent out of the country.

The proposal would index the payments to inflation and place the collection in the hands of officials where the betting operation is located. Sportsbooks with up to 20 employees would pay the lowest rate. Those with 21 to 60 employees would pay 16 million colons ($32,000). Sportsbooks with 61 employees or more would pay the highest 24 million colon rate.

Fourth quarter: revenue up 40 percent, earnings up 54 percent, poker fees up 92 percent, casino fees up 20 percent

Pioneer gambling software developer and turnkey casino provider CryptoLogic Inc., announced solid financial results for the fourth quarter and year ended December 31, 2005 this week.

Record revenue and earnings, and healthy operating cash flow reflected a disciplined strategy and strong growth in the major casino and poker segments of the global online gaming market.

"For CryptoLogic, 2005 marked a decade of innovation and consistent performance," said Lewis Rose, CryptoLogic's President and CEO. "It was a milestone year of delivering the world's most innovative games to some of the world's most trusted gaming and entertainment brands. The results speak for themselves - we achieved all-time highs in revenue and earnings. CryptoLogic is among the industry growth leaders in both the Internet casino and Internet poker markets."

Revenue for the three months ended December 31 was well up at US$25.1 million (2004: US$17.9 million) with a similar rise over the year 2005 of US$86.3 million (2004: $63.7 million) Earnings were US$5.8 million and $20.5 million respectively.

Other highlights included:

* Online poker fees derived from the company's WagerLogic licensing subsidiary rose 92 percent to $7.9 million over Q4 2004, up 13 percent sequentially over Q3 2005. Poker software fees accounted for 32 percent of Q4 2005 revenue, and grew 126 percent to $27 million in fiscal 2005 over that achieved in 2004;

* The launch of a new Greek-language Internet poker site for William Hill - the UK's largest sports bookmaker - marked the first multi-language version of CryptoLogic-developed poker software;

* Internet casino revenue rose 20 percent to $15.5 million compared with Q4 2004, up 23 percent sequentially over Q3 2005. Fees from casino software represented 62 percent of total Q4 2005 revenue, and rose 11 percent to $53 million in fiscal 2005 over 2004's totals.

* Geographic diversification remained on track with licensees' revenue from international markets exceeding 65 percent of total revenue, up from over 60 percent in 2004;

* In 2005, CryptoLogic repurchased and cancelled 509,700 shares at an approximate average price of US$18.05 per share ($9.2 million) under its Normal Course Issuer Bids; and

CryptoLogic delivered both record revenue and earnings for the fourth quarter ended December 31, 2005. The first and fourth quarters are typically the strongest periods for Internet gaming as players tend to spend more time indoors during the winter and fall seasons.

Revenue rose 40 percent to US$25.1 million (Q4 2004: $17.9 million) and earnings for Q4 2005 rose 54 percent to $5.8 million.

For the year ended December 31, 2005, CryptoLogic's revenue increased by 35 percent to US$86.3 million (2004: $63.7 million). Earnings for the full year improved by 50 percent to US$20.5 million.

Fourth quarter revenue reflected strong organic growth from existing customers in both Internet casino and poker. The immediate popularity of the company's new Bejeweled and Marvel-themed casino games, coupled with increasing player volumes and growth in popularity of the company's Internet poker licensees have contributed to record top line performance in these core game segments.

CryptoLogic's US$12.5 million investment program to enhance its software and systems, launched in Q3 2004, is now complete, and as a result, the company remains at the forefront of bringing the latest product innovation and entertainment concepts to its Internet gaming software, as evidenced by significant revenue growth and industry awards.

One day on from sign-up, this lucky starter took the progressive at VIP Casino

Player Jemo at VIP Casino must be one of the most fortunate newbies in online gambling this week - after only a day as a member of the casino player base he took the Rags to Riches progressive jackpot home, banking $131 250 after depositing just $100!

The jackpot will be paid out in one cash payment.

Still celebrating his big win Jemo said, “This is a dream come true for me. When I won I just stared and stared at the screen with my mouth wide open, thinking this cannot be for real. I was almost in shock. I’m so happy.”

VIPCasino.com Manager Kate Berkley congratulated the player and said, “It’s fantastic to see new players win big. We pride ourselves on our jackpots, and this is proven by the fact that more and more new punters are playing with us every day.”

Jemo was not the only big winner to hit the news this week. Slotland.com reported its first major jackpot win for 2006 when player Cowgyrl Ghost (there's a nick to conjure with!) struck it lucky on Striking Sevens with the site's second biggest win ever. A regular $50 player, Cowgyrl signed up in January and was going at it on $3 a hand when she won a jackpot worth $155 917.

“Generally I love card games so Striking Sevens has been my favorite,” said the player when asked how she came to hit the big jackpot. “I like the Jacks or Better and the Wild Hearts games. But I really love getting wild cards like you only get in Striking Sevens. I am not one to believe in instinct, but following my gut really paid off this time! My first three hands were junk. My heart was beginning to pound pretty hard and my head was screaming at me to stop and cash in my chips. I steadied myself and decided to stick with my decision to play out 20 hands at max bets.”

It wasn’t until her sixteenth hand, when she was dealt a Jack of Hearts, that she realised she had struck the mother lode. “I looked at my account, where just a few minutes ago I was so proud I’d gotten my $50 deposit up to $600 plus balance, and there was an astounding $156,000 PLUS balance! “ she recalls.

Independent poker film is attracting critical acclaim

An independently financed and produced movie with a poker story as its central theme is attracting attention from both poker players and the general public - and it was mostly financed from poker winnings!

"Freeze Out" was filmed three years ago on a tight $20 000 budget, three quarters of which came from the producer's poker winnings. The movie is currently running in a festival at Cinequest (cinequestonline.org) and has received plaudits from viewers around the world. Some have even compared it to "Rounders" for good all-round gambling entertainment.

The plot revolves around a small town home game of "dealer's choice" poker between friends which escalates into a do-or-die "freeze out" tournament for higher stakes than most of the players can really afford, and examines the complex and often humorous human motives and reactions inherent in a competitive situation.

M. J. Loheed, a Los Angeles independent film maker and poker player who has hosted home games, wrote, directed and produced "Freeze Out", turning his passion for the game into an entertaining movie with crisp dialogue and all the excitement of the game of poker. Loheed selected actors of the calibre of comedian Greg Behrendt and actress Laura Silverman, both of whom worked on the movie without pay, having enjoyed reading the script.

Loheed is hoping that "Freeze Out" will gain more exposure from being featured on the Cinequest Online festival site, and feels that industry and public interest over the next six months will determine the firm's future, which might include availability from video stores or the larger independent film channels.

Readers interested in viewing and having their say on the film can do so until February 24 at Cinequest Viewers' Voice Online Festival, where the film can be downloaded.

Gaming group to advertise on Las Vegas airliners

Gamblers visiting Las Vegas will be seeing a lot more of the vermilion branding of the Bodog group of online gambling companies following a deal this week with Allegiant Air.

Brand-conscious Bodog has arranged for the airline's six large passenger jets servicing McCarran International airport to be externally and internally branded in the colors and logo of the international digital entertainment and gaming company.

The advertising initiative will cover a three-month span on six Allegiant Air, 150-seat MD-80 passenger jets.

"Our advertising partnership with Allegiant Air is a natural fit for us. Branding encompasses everything from good customer service to strategic advertising positioning and targeting," says Calvin Ayre, founder and CEO of Bodog.com. "This in-air branding exercise will allow us to target a specific player demographic, while continuing to expand the presence of our brand throughout the continental United States."

The Allegiant aircraft will fly between Las Vegas and 32 nonstop Allegiant Air destinations. The planes will be parked at Terminal D in McCarran Airport, near the airport's busiest runway.

Extending the advertising value, passengers flying in any of the Bodog.com-branded jets will have a chance to win their next trip to Las Vegas when they sign up for a Bodog.com account and deposit a minimum of $20.

Along with an in-flight announcement highlighting some of the Bodog.com product offerings, the sleek and sophisticated Bodog.com plane inserts are available in each seat back. These brochures come complete with detachable Poker and Black Jack strategy cards.

For passengers looking to get into the Vegas mood early, each of the passenger seat trays is designed to look like a Black Jack table.

Still strong vibes that an IPO is on the cards

The Canadian poker software developer Excapsa, which is headed by ex-Cryptologic exec Jim Ryan and runs sites like UltimateBet was apparently active in London recently, with presentations to several investment oriented bodies. The news gives weight to persistent rumours that the company will soon seek a London listing (see previous InfoPowa reports)

eGaming Review reported that its sources were of the opinion that the meetings went well. “The offer is three times oversubscribed. There has been a lot of appetite for this issue,” said one source.

Canaccord Capital are believed to be advising Excapsa, which took over UltimateBet last year when it bought out software company ieLogic, on the IPO. Ultimatebet’s intellectual property is owned by eWorld Holdings, but Excapsa is believed to take a major share of the revenues from the site.

Professional online casino manager to take up post as VP Ops

Industry management veteran Thorsten Hillebrecht is packing his bags for Singapore this week, where he is to join the spanking new Elite Club Management centre as VP Operations.

Hillebrecht has wide industry experience, most recently with the giant Austrian gambling group Bet & Win which he departs to join Elite. His new appointment follows that of Glen Bullen (see elsewhere in this InfoPowa bulletin) who will be looking after any Chartwell Tech related player disputes, which are now channeled through Elite.

Tomer Katz has replaced Hillebrecht at B&W.

Nevada authorities stop topless poker

Las Vegas striptease venue Sin Gentlemen's Club devised an unusual topless poker tournament last month, but was prevented from going ahead with the concept by the Nevada Gaming Commission, which said that the establishment was not authorised for gambling events.

The idea was a free-roll, topless player (and no doubt suitably endowed club personnel would be involved) tournament with physical as opposed to hard cash prizes, and was designed to be more eye-catching than practical. The organisers could not be accused of being cheapskate, however - prizes included iPods, High definition TV sets, poker chip sets, humidors, and expensive wine baskets.

Inaugural World Celebrity Poker Tournament to take place in Casino Filipino

The Phillipines is set to become the latest venue for celebrity poker players following a move by the Philippine Amusement and Gaming Corporation (Pagcor) to host the popular game.

The inaugural World Celebrity Poker Tournament has been scheduled for February 22 at the Casino Filipino in the city of Cibu.

Pagcor spokesmen said that the body will host some the the world's top poker players for the event, including poker legend Doyle Brunson and his son Todd. In addition to the poker stars playing in the tourney, Jack Binion, the legendary former host of the World Series of Poker, will be playing poker host.

Helmuth to defend his title at Caesars Palace

March 4 to 6 will be in the diaries of many poker fans following the announcement of the date and venue for the next National Heads Up Poker Championship, scheduled for Caesar's Palace in Las Vegas, where spanking new facilities have been completed.

One of the most popular poker events in 2005, the championship was won last year by Phil Hellmuth who will be back defending his title.. The tournament, which was held at the Golden Nugget in Las Vegas and broadcast on NBC in May, brought sixty four of the greatest names in the game together to determine the best heads up player in the world.

Many will remember the epic showdown in the final tournament, which was won 2-1 by former World Champion Phil Hellmuth in a tense tussle with another former World Champion, Chris "Jesus" Ferguson.

Elite Club comes through
In previous Casino Cautions we have been critical of Chartwell Technology's "hands off" policy when it comes to player-casino disputes, and we recently took their major sub-licensor Elite Club Management to task for not responding to player complaints. We did this because a senior Chartwell Tech exec assured us that the company was concerned about player satisfaction, but had decided to handle complaints through Elite Club Management as it was closer to the interaction point. This information was duly passed on to the player community, but when several players were ignored last week we took up the issue again and placed the companies concerned in Cautions.

However, hardly had the bulletin gone out when Elite Club's president explained that they had been at sixes and sevens due to the departure of key personnel and a major move. He promised that a new customer relations manager, Glen Bullen was about to start work and his priorities would be the aggrieved players. Good to his word, Bullen hit the ground running this week and several players have already informed us that their cases have been satisfactorily resolved.

On the basis of this, we are pleased to withdraw the original Caution, and express relief that Chartwell, through Elite Club at last appears to be coming to the disputes party. Their future handling of player issues in a timely way will be the ultimate test, but the indications are positive at this time.

A very bad start
Villento Las Vegas.net had everything going for it as it launched last week - a great site, top quality software and positive reports about the integrity and experience of the owner, understood to have been a co-founder of the Fortune Lounge group.

By the weekend, perceptions had changed, however following a widespread spamming campaign that had many players up in arms and invoking The Boulder Pledge not to use services offered by spammers. The casino may have outsourced the email marketing to a third party, but from a player perspective this makes no difference, and the casino itself is held responsible for these infuriating invasions of player privacy. Damage to reputation inevitably follows.

It has to be said once again: email marketing is an ethical selling technique...but only if it is professionally targeted on players who have "opted in" through an unambiguous arrangment where they understand the implications and agree to accept this form of market information. And any request to "opt out" of a list should be honoured efficiently and in a timely manner. All other cases, and especially where invasions of privacy occur through transferred or sold player lists are spam. And unwelcome.

Fighting spam in a practical way

Recent message board discussions on the evils of spam and ways of fighting it in the online gambling context brought to light the Boulder Pledge, which InfoPowa believes is something to be supported.

Spamming - the unsolicited invasion of player email in-boxes by unprofessional online gambling operators - has become a scourge, clogging up what should be a fast and convenient communications medium and wasting the precious time it takes to delete or block this garbage.

The rules for effective and ethical email marketing are clear:

Do not send uninvited email offers to players who have not specifically signed up for it and know they have done so eg "opted in"

Having "opted in" if a player asks to be removed from the list it should be done so quickly and effectively.

Player information is to be zealously guarded, and player privacy respected. That means no trading mailing lists unless every player on that list has opted in and has agreed that his or her details can be sold on.

Any marketing email should have a clear and genuine "unsubscribe" facility that is quickly effective, and ethical marketers should have no problem in indicating exactly who is sending the email and how that person or company can be contacted in the event of problems or complaints.

Judging by the number of spam complaints from players every day, it is clear that the industry is not applying these guidelines with diligence. The Boulder Pledge therefore presents the player with an opportunity to show displeasure and censure in a most effective way - by denying his or her business to those guilty of this malpractice.

Wikipedia informs that The Boulder Pledge is a personal promise, first coined by Roger Ebert, not to purchase anything offered through email spam. The pledge is worded as follows:

"Under no circumstances will I ever purchase anything offered to me as the result of an unsolicited e-mail message. Nor will I forward chain letters, petitions, mass mailings, or virus warnings to large numbers of others. This is my contribution to the survival of the online community."

During a panel at the University of Colorado at Boulder's Conference on World Affairs in 1996, Ebert presented the Boulder Pledge. He wrote the text which appears above and encouraged everyone to support it. It was subsequently published in the December 1996 issue of Yahoo! Internet Life magazine in Ebert's column titled "Enough! A Modest Proposal to End the Junk Mail Plague."

The Boulder Pledge has become one of the basic principles of the anti-spam community in an attempt to make e-mail spam less profitable.

Editorial aimed at American legislators at a sensitive time

With increasing reports of a strong Leach-Kyl alliance to take down Internet gambling through new legislation, last weekend's news that Bet On Sports CEO David Carruthers is showcasing an industry view is welcome.

Carruthers was voicing his opinion in the influential Washi