Huge week for online gambling

Not a great week for yours truly to take a European vacation.

Not only is it the Final Four and the start of baseball, but it is a week with an industry conference in Holland. Oh, and the US's deadline to propose a settlement to Antigua in the WTO dispute is... today.

Finaly, the UIGEA is finally receiving the Congressional hearings it never rightfully received when the bill was hijacked through the process in 1996.

Naturally, the good news is that these hearings will give the banks an opportunity to explain what a dogpile the UIGEA is from a practical standpoint.

The bad news is that this might also give the right-wing nutsacks a chance to further tweak the bill to ease the financial industry's complaints, while making the bill stronger.

So don't get your hopes up just yet.

I'll be trying to follow this story.

The action on the hill starts Tuesday.

Don Best and Jim Feist, up a tree, m-e-r-g-i-n-g!

This news came across the Yahoo business wire this morning... Big Stick Media Announces Proposed Acquisition of Don Best Sports.

As an employee of SportsDirect Inc. (the mothership that runs Covers.com), it should be noted that we are semi-competitors with both Don Best and Big Stick, so I will leave the commentary to others.

That being said, I'll try to lay down some facts about this deal, because it is a fairly large transaction involving our industry and it might somehow affect our users in the future, although I'm not immediately aware of any possible direct effects.

Anyway, it looks like Big Stick Media, the parent company of Jim Feist, is purchasing Don Best's company, Corcom, from its parent holding company, Skilljam, for an amount of $16.74M - with about half paid in cash immediately, another 25% or so in stock, and the rest paid in installments over the next year. The deal also apparently gives Skilljam the right to purchase stock in BSM up to nearly 20%.

What confuses me is that Skilljam is also somehow controlled by another company, FUN Technologies, that isn't even mentioned in the press release. FUN ... [More]

Will America settle with Antigua?

The Antigua Sun reported this week that the Antiguan government is expecting a settlement proposal from America regarding their bitter WTO trade dispute, and that proposal is scheduled to arrive by the end of this month.

According to the article, this proposal is planned to address not only the sanctions arising from the arbitration ruling in December, but will also the main base of contention between the countries, which is that America is not acting in good faith by disallowing foreign countries access to the American online gambling market.

The end-of-March deadline explains Antigua's recent saber-rattling. As F@S reported last week, Antigua has been ramping up its rhetoric surrounding this issue, and has been gathering support from the American entertainment industry to have this matter settled.

Whether or not the US actually makes a proposal in the next few days remains to be seen. In my little experience following international trade disputes, I have noticed one commonality: delays.

However, if the US does make a proposal, things will get very interesting.

For one thing, we can't... [More]

Finally, a poker site for the stoner crowd

This cracks me up.

Check out this new site... Reefer Poker.

This is how they describe themselves "You might wonder how Reefer and Poker go together.  The answer is simple.  Our creators love both playing poker and the marijuana culture.  Pot enthusiasts are a different breed.  We are relaxed, we analyze, we like to have fun.  By creating a poker site filled with like minded people, we hope to create a community that thrives and grows off of mutual interest.  Quite simply, we all just want to get along, and change the poker experience forever."

By the way, I know nothing about these guys other than what's in their press release. So this is definitely not an endorsement.

That being said, I'm not an especially great poker player, but I'm pretty sure that I would have a fair amount of success playing against a table full of guys who at any moment might be forgetting who is dealing. It might be an opportunity to go fishing.

As a final chuckle, they have a weekly draw for a vaporizer.

One possible drawback, I couldn't imagine how often the games will be delayed by players running to the pantry to grab a bag of Doritos.

Yawn! NJ gambling sweep picks up 42 arrests

It's March Madness time, so it is time to hear the usual reports about gambling arrests.

Apparently, a recent gambling sweep in New Jersey has picked up 42 people, including a high school teacher.

For me, that is about the only interesting part of this story, because it raises a host of issue for the future.

Since the majority of Americans can agree that sooner or later there will be legalized online gambling in America, how will this activity reflect upon everyday Americans?

For instance, I don't give a crap whether some high school gym teacher plays poker - or even bets on sports - in his own free time at home online.

But how will the general public react to news such as this in the future?

I can really see a double-standard developing where certain people with certain jobs will be allowed to do what they want, but others in positions of "responsibility" will be expected to abstain from online gambling even after the pass-time is legalized.

But regardless of what is coming in the future, I have mixed feeling about this news story and the people involved.

One part of me has no sympathy for people who are so stupid to keep betting with a corner bookie when there is a simpler, better, and more convenient option located on the desk in their bedroom.

But, of course, another part of me understand... [More]

CSMonitor: Outlaw horseracing too!

Just when I thought it was going to be a slow news day, somebody forwarded me this story from the Christian Science Monitor... Don't fold on Internet gambling ban

Ahhhhh, the hilarity.

The article starts off with a bang, "Last year, the percentage of American college students who gamble online fell to 1.5 percent from 5.8 percent the year before. The reason? A 2006 federal law restricting Internet gambling."

At least we can both agree on this point.

Yes, the Unlawful Internet Gambling Enforcement Act did cause a huge drop in the amount of college students that gambled online. The problem is that it also likely caused a similar proportional drop in the amount of honest and responsible hard-working American adults who wanted to gamble online, but couldn't because somebody else wanted to thrust their own version of morality upon them.

And while we are at it, let's talk about those American college students.

Are there some irresponsible students who could get theirselves into financial problems due to gambling online? Of course.

But these students, like it or not, are adults.

They are likely living away from home, they are old enough to vote in an election, they are old enough to go to war and die for their country, and most importantly in this situation, they are old enough for a bank to issue them a cr... [More]

NFL lobbyists tackle steriods and gambling

Every now and then I come across a news article that just cracks me up. You know, those ones where you can tell the reporter is tackling an issue they really have no idea about, and so you read along waiting for the inevitable unintentionally funny moments?

Well, the Politico published a story today that crossed that line.

The story's focus is about the lobbyists hired by sports leagues and the issues they are paid to target. It's really a well-intentioned puff piece that seems to be trying to take the angle of "lobbyists are people too", but somehow starts wading into issues and doesn't know how to escape.

The issues are the sports leagues' lobby efforts regarding steriods and online gambling, and they have definitely put in the effort. According to the article, the four major leagues combined to spend $2.6M lobbying Congress last year alone.

And you can not argue with the results. Maybe it's a nice spin-move by the lobbyists, but the NFL definitely feels it played a big part in getting the UIGEA enacted in 2006, and they are spending a lot of money trying to keep that law in place.

In fact, given the momentum that Barney Frank's regulation bill has been gaining and the fact that the financial industry is also lining up against the UIGEA, it could safely be said that should the UIGEA not get repealed, it will probably be because o... [More]

UIGEA finding new enemies all the time

As regular readers of this blog know, the UIGEA is probably the most short-sighted pieces of legislation since the Prohibition.

So it is no surprise to find out that yet another business segment is getting concerned about the onerous burden the UIGEA places on American banks and financial instituations.

This time it is the digital transaction processing industry that is waking up to the UIGEA.

Nothing Earth-shattering here, but if you want to read another synopsis of the UIGEA's flaws, take a look.

Thailand targets online gambling

This would be funny if it wasn't so sad.

Thailand's Department of Special Investigations is cracking down on online gambling.

The reason?

They are worried about the number of teenagers that are gambling online.

Excuse me, but isn't Thailand the country that regularly finds itself criticized for its lax legal system that allows underage prostitution and feeds the inevitable scourge of HIV?

So their solution to protect the youth of their country is to crack down on online gambling.

OK.

Massachusetts gambling bill down, but not out

The Boston Globe printed a nice summation of the situation surrounding the defeat of the now infamous Massachusetts casino plan.

Personally, I am confused at my own reaction to this story. Never in my life have I been happy to see a plan for casinos get shot down, but here I am. This fact epitomizes how stupid and misguided the whole plan really was.

And I'm not even talking about the bill's plan to issue jail sentences and hefty fines for those found gambling online. That was stupid, but it is a testament to the entire stupidity of this bill that something so shocking didn't even register in the main reasons for the bill's failure.

Either way, I'm glad it is gone for now, but I'm also pretty certain we haven't seen the end of this bill. There is simply too much money being potentially thrown around and too many people who could get rich for this plan not to have a few more opportunities.

Great week for gambling movies

If you are not going to be following the NCAA Tournament over the next few weeks, at least you can feed your gambling jones at the theatre.

Opening today is the movie The Grand, a comedy starring Woddy Harrelson, David Cross, and Gabe Kaplan. Yes, that Gabe Kaplan. Kotter from "Welcome Back, Kotter". If you haven't seen him lately, it's because he is a hard-core poker fan who's been making a name for himself on the poker circuit. This is his first acting role in 25 years.

Read a review here. Most of the reviews I've seen are pretty positive.

If comedy is not your thing, then the movie 21 should be released in a few days too. Starring Kevin Spacey, Larry Laurence Fishburne, and the always hot Kate Bosworth.

Supposedly this is the true story of the MIT students who took Vegas for a lot of dough in the 90's, but this movie appears to be playing fast and loose with the facts, which I hate. Hopefully it should be interesting at least.

Antigua planning to play its trump card... piracy

Riddle: What do you call piracy when it becomes legal?

Answer: Sweet justice.

Antigua appears to be preparing to follow through on its rightful plan to seek meaningful reparations in its ongoing WTO dispute with the US regarding America's unlawful oppression of online gambling.

10-second recap... USA has deemed online gambling unlawful, and yet allows horsetrack wagering online. This is an international no-no, and flies in contravention of America's policy in virtually every other situation. Antigua sued. WTO agreed with Antigua and awarded a miniscule $21M in damages, but also the right to seek damages in other markets, such as IP-based industries as music, film, and pharmaceuticals. US is shit out of luck, and yet still won't budge on the gambling issue.

Got that?

Well, Antigua appears to be readying itself to begin its war on American intellectual property, as Variety is reporting this week. And America still seems to be playing the situation as if Antigua is bluffing.

Quote from USTR spokesman Sean Spicer, "Antigua would be breaking the law if it did that".

Uh. No. Maybe they would be breaking American law, but not international law. America is the one who is breaking international law.

Antigua is completely right to follow through on this threat, and I hope they do. Not only would they be lookin... [More]

LA Times: Get votes by legalizing online gambling

The LA Times has posted an interesting story today which discusses how the libertarian (ie. socially liberal, fiscally conservative) segment of the population is growing and has yet to be targetted by either of the major parties.

The article mentions seven specific issues that appeal to the libertarian-minded individual, who represents approximately 15% of the electorate. Which means to say that if you can grab the libertarians, you can win the election.

The issues:

- leave medical marijuana alone
- legalize online gambling
- ban the use of eminent domain (ie. stealing property and giving it to developers)
- keep the Internet tax-free
- allow amnesty for illegal immigrants
- health care reform
- get out of Iraq

NOTE: These views are the views of the LA Times, and not necessarily yours truly, although I have a hard time disagreeeing with the notion that libertarians approve of those issues.

Spain plans its own Las Vegas

This is interesting. Europeans soon won't have to travel to North America to experiance the thrills of Las Vegas.

Spain is planning its own version of Sin City, and true to the spirit of Vegas, the Spanish version will also be smack-dab in the middle of its own desert in Catalonia.

It's going to be called Gran Scala, and the story mentions there should be up to 20 projects in the works over the next five years alone.

If you are wondering where Catalonia is, it is the north-east region of Spain, and the Gran Scala project looks to be located in the desert (I didn't even know there were deserts in Spain!) approximately mid-way between Barcelona and Madrid.

Another reason to travel to Barcelona!

Defeat likely for Mass casino bill

A couple of sources are breaking the news this morning that the Massachusetts casino plan is headed for likely defeat.

I don't have any real opinion about the casinos. Hey, people like to gamble. But unless you are in Vegas, now may not be the time to build three huge multi-billion dollar casions that will be obsolete the moment they open. The plan was to place these casinos out in the wilderness, supposedly to boost jobs and tourism in those areas.

Thing is, those are exactly the kinds of places better served by online casinos.

The reason I found this story intriguing was that the plan actually thought of that angle, because it also included a plan to make online gambling illegal in Massachusetts, with the penalty being jail time and/or a huge fine.

That's ridiculous, and therefore I'm please to see the rights of the people of Massachusetts being protected when this bill fails.

CryptoLogic posts a strong fourth quarter

The online casino software market is apparently hot again as CryptoLogic reported its Q4 2007 revenue and earnings - and they were well ahead of expectations.

Crypto announced in November that they expected Q4 revenue of $18.5M and net income between $2M and $3M. Instead, they posted revenue of $20.4M and earnings of $5M.

Well, it looks like another potential market is pulling out of reach of American companies.

Online gamblers in Boston to get jail time?

A couple of weeks ago, we blogged about the controversy in Massachusetts surrounding the governor's plan to open a few casinos.

Well, there is more to this plan than meets the eye.

Not only would Gov. Deval Patrick’s (a Democrat?!?) casino plan ultimately build three costly and obsolete brick-and-mortar casinos in the heartland of Massachusetts, but a provision in the bill calls for citizens caught gambling online to "face up to two years in jail and a fine of as much as $25,000."

Jail time? $25 grand? Are you kidding me?

Correct me if I'm wrong, but isn't Massachusetts the home of liberal democracy? For God's sake, Ted Kennedy lives there. Harvard? How could an outrageous bill such as this even get tabled in Massachusetts?

Regardless, the students of Harvard are on the case.

According to the Boston Herald, the Global Poker Strategic Thinking Society from Harvard is planning a rally today outside the State House to protest the bill and rally for their right to play poker online.

If you are an online gambler in Massachusetts, then I suggest you get your butt out to the State House today and join the cause.

... [More]

FBI: Your Facebook March Madness pool is illegal

In a story that has surprisingly stayed under the radar the Chicago Tribune reported last week that the FBI is, seriously, investigating the March Madness pools that are proliferating Facebook and offering prizes.

The Fun Police are at it again.

Actually, this is one area where the law does clearly make pools like this illegal. It's not even a question.

After all, as the article states, "online pools are far more likely to have players from several states. And with the exception of horse racing and lotteries, interstate wagering is illegal."

Whether or not the FBI should waste resources on this is another matter.

However, no matter where you go, you will always find a cop or DA who's looking to make a name for themselves, so I would not be surprised at all if somebody does get arrested - just to make a point.

US to Antigua: You are nothing but money launderers

Every year, the State Department releases its International Narcotics Control Strategy Report (INCSR), and as usual this year's report is raising a lot of eyebrows in the Caribbean as well as the rest of the globe.

You see, every year, this report makes a list of Major Money Laundering Countries. Think of this as a popularity contest you don't want to be part of, but is pretty hard to avoid.

Consider the fact that this year's list includes, and I'm not kidding, 202 countries!

For reference, the United Nations only recognizes 192 countries, and Wikipedia only lists 245 worldwide political entities. So, depending on your point of view, the State Department's list includes either includes 82% of the countries of the world - or 105%!

Either way, it is ridiculous.

Instead of referring to these countries as "Major Money Laundering Countries", maybe a better sorting mechanism would be to refer to the remaining 18% as "Elite Plutocracies that Kowtow to Our Over-Reaching Financial Privacy Laws - and So We Like Them".

Now, to frame this conversation, the reason the State Department makes this list is as part of their War on Drugs. Far be it for me to defend drug trafficking, but this whole situation seems to beg for ... [More]

South Africa moves to legalize online gambling

Here comes another sign that the world is moving towards the path that makes sense... the Johannesburg Times is reporting that the South African government is considering a bill to license and regulate online gambling.

The bill is already being considered in committee, and soon will be tabled in the National Assembly for final approval.

An interesting facet of the bill is that it will not reward companies that have been operating without a license prior to the bill's passing, since those companies were operating illegally.

This is an interesting move.

While it does, in a wierd sort of way, kind of make sense to disqualify those who were breaking law, all this restriction will do is open the door for foreign companies to come in and take all of the market.

No matter what happens, it looks terrible that South Africans are soon going to be able to enjoy a freedom denied to those living in America - a country that considers itself the greatest beacon of freedom in the world.

...and the March Madness stories start rolling in

Canada's Globe and Mail posted a fun article on Friday about the growth of office pools and gambling surrounding the NCAA Tournament.

The article does a nice job of describing how the tournament's design makes it a natural to attract everyday people into pools and wagers, and that has served to drive the overall popularity of the tournament to huge levels.

When you think about it, at the rate the Tournament has been growing in popularity and ratings, it's only a matter of time before it catches up to the Superbowl in terms of overall ratings and value to the networks. Sure, the Superbowl will be the premiere single sporting event for a long time, but the NFL's market has really plateau'ed, while the NCAA Tournament, with 63-times as many games and it's associated pools and the lure of "amateur" athletes, has the potential to grow much larger than it is right now.

Hmmmmm... let's see... a sporting event that is designed in a way that lends itself to gambling... and it becomes popular.

Wow. Didn't see that coming.

Of course, the NCAA would never want to associate itself with gambling, but it's more than happy to accept all of the ratings and revenues that roll in as a by-product of gambling. That is, as long as it doesn't have to share any of that revenue with the slaves players wh... [More]

Gambler loses case against William Hill

The case of the unrepentantly repentant gambler has come to a close in England.

As we reported a few weeks ago, Graham Calvert, a fromer greyhound trainer, had himself barred from gambling at William Hill. Yet a few months later he was able to sign up for a new account and then proceeded to lose £2.1m.

This sparked a lawsuit where he claimed William Hill was responsible for his losses, since they didn't follow their own policies in keeping him excluded from gambling.

Well the verdict is in, and he lost.

Not only does Calvert not get his money back, but he also has to pay a further £336K to cover William Hill's legal fees.

I'm not sure how I feel about this.

Yes, it did seem like a prime case where he was taking advantage of the situartion to cover for his own recklessness, but I also think William Hill should have received some sort of punishment for allowing the situation to develop as it did. Perhaps a fine?

Better luck next time.

Either way, the fact that he had to pay costs will dissuade all of the lawyers out there from manufacturing a similar situation.

... [More]

Congress wants the facts about gambling compromise with EU

The facts surrounding the EU's withdrawal from Antigua's WTO case against America are murky at best.

As we reported a few weeks ago - I can't seem to find the link, but I know we did - a blogger was challenging the US Trade Representative's assertion that the side deal that led to the EU's withdrawal was a matter of national security.

Well, the cry for information is growing louder.

Congressman Peter DeFazio, is rallying Congress to demad more information surrounding this deal.

This could get interesting.

Do Canadians want sports gambling?

The Toronto Star yesterday printed an interesting column in which writer Dave Perkins lays out a fairly pursuasive case that Canada should embrace sports gambling as a way to boost tourism and tax revenues.

It's a different spin on the argument, that's for sure.

Perkins wants the country to open large Vegas-style sportsbooks across the country at race tracks and other venues. His argument is that the government is already in the sports gambling business anyway - through the various sports lotteries - so why not do it right?

He wants the government to legalize sports gambling and use these proposed sportsbooks as a way to fight the rise of online sports gambling.

While I applaud Perkins' enthusiasm, and I sure wouldn't complain if his idea gathers momentum, I'm not sure if his idea is really the correct direction to go.

For one thing, he assumes that once sports gambling is completely legal in Canada, then people will only want to bet at physical brick-and-mortar sportsbooks. Sure, I think there will be a segment of the population that would love to spend an afternoon at a sportsbook (count me in), but I think there is a growing segment of the population that would prefer the convenience of placing their bets online.

Yes, NFL weekends would be insanely popular. As would Saturday nights during hockey season. But if there are only one or t... [More]

Is online poker about to get trashed by 60 Minutes?

Many of you may not have heard of Nat Arem, but he is one of the more knowledgeable poker observers around. Founder of thepokerdb.com, he played a part in uncovering the Absolute Poker scandal last year. He's a blogger now.

In case you are not aware of the Absolute Poker (AP) scandal, I'll sum it up quickly, and forgivingly...

Absolute Poker's backend software had a debugging feature that allowed restricted people, known as superusers, to see the cards of anybody playing at that time. This feature should have been shut off in live production. According to AP, one of their staff logged in as a superuser and was relaying card information to an accomplice who was playing. They got caught. AP was scandalized.

Anyway, Arem is now claiming on his blog that he was recently interviewed about this story by none other than Steve Kroft of 60 Minutes as part of an overall story about online poker.

Arem got the distinct impression that the entire story angle would be quite negative for online poker in general. He's not positive, but that is the impression he got. It could be that since his featured role in the industry was during a negative incident, that his might be a negative point during an otherwise positive story - but that's not the impression he got.

Wow.

This story - if it airs - could eit... [More]

EU Looking at US Online Gaming Laws

From the BBC:

The EU has started an enquiry to examine if US policies affecting foreign online gambling firms breach trade rules.

The European Commission is to assess European firms' complaints that they have been discriminated against.

 

A 2006 ruling effectively banned foreign internet firms from operating in the US.

 

European firms have complained that the US has targeted foreign gambling firms while allowing US rivals to operate.

 

'Double whammy'

 

Industry association the Remote Gambling Association (RGA) lodged a complaint on the topic in December with the European Commission.

 

It claimed the Department of Justice (DoJ) was trying to prosecute foreign gambling operators while allowing US firms to operate, especially those... [More]

Spitzer Linked To Prostitution Ring

Online gambling's first opponent Eliot Spitzer is expected to resign this afternoon after being caught in an illegal prostitution ring. Spitzer shot into the gaming world's radar, much like Catherine Hanaway has over the last couple of years, by taking on Paypal and Citibank back in 2002.

"Americans now waste $4 billion a year on this pernicious form of gambling," Spitzer said in 2002 to USAToday. "With this agreement, we will cut off an enormous line of credit that was a jackpot for illegal offshore casinos."

I wonder if Spitzer was able to use his credit card for his late night visits? I guess that would be alright in his view.

What a hypocrite. Just like we've said in the past, the only opponents of online gambling are these opportunistic politicians who view the industry as a easy whipping boy on their run for bigger public positions, or the super right wing evangelists who hate all forms of gambling. They don't understand the real issues and they don't care... [More]

American banks are fighting mad about the UIGEA

Congrats to PokerNews.com, for shedding light on a hitherto unseen document filed by the American Banking Association (ABA) in December.

The 11-page document represents the ABA's official reponse to the Unlawful Internet Gambling Enforcement Act (UIGEA), and lists nine specific areas in which the UIGEA is lacking in clarity, depth, or even sensibility.

And this is coming from an organization that claimed to be neutral on the UIGEA. Apparently, the ABA must be taking lessons from Frank Fahrenkopf on how to act neutral.

Either way, there has been a lot of stories published recently which mention how the banking industry has concerns about the myriad of problems that the UIGEA will cause.

Well, this is an actual document reflecting those concerns. And judging from the points listed by PokerNews, it is every bit the long list of concerns that we thought it was.

Is Vegas starting to see the light?

The always-excellent Las Vegas Review Journal (LVRJ) posted a great editorial yesterday discussing Jim McDermott's new online gambling bill.

The piece does a nice job of outlining the situation created by the Unlawful Internet Gambling Enforcement Act (UIGEA), and how McDermott's bill is a common sense approach to addressing the fact that people will always gamble and trying to prohibit it is useless.

The column also gently calls out Frank Fahrenkopf, president of the American Gaming Association (AGA), for the AGA's outdated neutral stance on Internet gambling. I approve of anything that points out the ridiculous nature of the AGA's neutral stance.

The LVRJ is truly a media organization that understands the Internet. When the fire at the Monte Carlo happened a few months ago, the LVRJ proved to be the best source for information anywhere, with live video footage and stories that were head-and-shoulders above anything seen anywhere else. So it makes sense that the LVRJ should see the benefits of online gambling before the rest of Vegas.

Still, it's nice to see stories like this emanating from Sin City, because if Internet gambling is ever to be legalized and regulated in... [More]

iMEGA online gambling ruling issued today

One story that we have been anxiously following is the status of the iMEGA legal challenge to the Unlawful Internet Gambling Enforcement Act (UIGEA), happening in New Jersey. A decision was supposed to come out in December, but was delayed.

Well, we wait no longer... the decision came out this afternoon.

We are still mulling over the decision (which can be viewed here) but this is what we think we can decipher...

In short: The complaint was basically dismissed, but iMEGA won some key points.

Here's the background:

iMEGA is the Interactive Media Entertainment & Gaming Association. When the UIGEA passed, they wanted to challenge the law, but were unable due to some arcane legal technicalities regarding their status. So they went to court to fight for the right to challenge the law, among other complaints.

In the decision released today, Judge Mary L. Cooper, of the U.S. District Court for the District of New Jersey, threw out the complaint, but granted iMEGA the standing to challenge the UIGEA.

But why is this important?

According to iMEGA's lawyer, Judge Cooper ruling stated that despite the passage of UIGEA, online gambling ... [More]

Congressional hearings planned for new online gambling bill

Barney Frank and his Internet Gambling Regulation and Enforcement Act are receiving plenty of  generally positive coverage today on The Politico website.

In a nice piece posted today, Patrick O'Connor gives a quick outline of the bill and what it is trying to achieve. The article also does a good job of indicating the groundswell of protest growing against the UIGEA coming from "financial services companies, in conjunction with gamblers, lawmakers and a broad cross section of trade associations affected by the law".

This story is meaningful because it appears on a site that caters directly to the educated political hound. The fact that the Politico is starting to sniff out the discord surrounding the UIGEA is a good sign that this issue is starting to stike a chord with more mainstream political pundits, rather than remaining a marginal issue.

The article also mentions that Frank is planning to hold hearings on this bill as early as this spring.

Excellent! Let's get this matter out in the open!

Quick fallout from Canada's threat to Kahnawake

Wow. That was even faster than I expected.

As we reported yesterday, the National Post printed a front page story on Wednesday that indicated the Canadian federal goverment was investigating ways to shut down the online gambling sites located on the Kahnawake reserve outside Montreal.

Well, today's Toronto Star followed up by digging a little deeper into the situation.

As expected, it looks like the threat was little more than a lot of hot air blowing out of Ottawa, while the reality appears that the government is actually trying to find a way to legalize online gambling without pissing off its conservative base.

Here's some takeaways from the story:
The horseracing industry is rightfully angry that Kahnawake can eat away at their market. "It's having a severe impact on our business," said Jane Holmes, vice-president of corporate affairs for Woodbine Entertainment Group... "If we tried to do what they're doing, we would lose our licences. It provides them with an unfair competitive advantage." Correct!
The Federal Justice Minister Rob Nicholson is also giving himself plenty of wiggle room. His director of communications Genevieve Breton, is quoted as saying "Our office ... [More]

New online gambling taxation bill is gathering publicity

A few weeks ago, we talked about the new bill being introduced by Representative Jim McDermott (D-WA). Well, McDermott officially introduced the legislation on Tuesday, and judging from the coverage, the mainstream media actually seems interested.

And why not?

The bill references analysis done by PricewaterhouseCoopers which states that over a decade, online gambling could generate between $8.7 billion and $42.8 billion in taxes. That's a lot of money, and in this time of an apparently looming recession, that money looks pretty meaningful.

I have to admit that I particularly enjoyed the angle taken by the Las Vegas Review Journal, which chose to interview Frank Fahrenkopf, president of the American Gaming Association.

As usual, Fahrenkopf adopted the AGA's traditional neutral stance towards online gambling. The article credits Fahrenkopf with:

- questioning the numbers put forth by PWC.
- questioning the likelihood that, given the chance, states would authorize Internet gambling.
- questioning the chances the bill would pass through Congress.

So let this be a lesson for all of the political science and MBA students out there... if you want to be neutral on an issu... [More]

Could Canada target Kahnawake?

Huge news today coming out of Ottawa.

The National Post is reporting that the Canadian government yesterday said that it is "considering new measures to stamp out Internet gaming sites" based out of Kahnawake.

Kahnawake has a huge internet connection that pipes directly into America. Not only does Kahnawake host over 400 online gambling sites, but some of the biggest.

If this plan is indeed real, it might be the biggest news in Canada this year, and I'm not kidding.

However, I have some real questions about this story and the validity of the government's actual plans regarding this matter, for many reasons.

But first, some history...

The Canadian government is traditionally loath to start disputes with its native groups. For an example of why, check out this Wikipedia link regarding a crisis that erupted in Oka, Quebec in 1990 over, and I'm not kidding, a proposed golf course expansion. Short summary: Two-month armed stand-off. Media circus. Three dead. Blocked highways. Bad situation.

Now, with that in mind, how likely does it seem that the Canadian government would actually be willing to start this fight? Now? In the age of the Internet? It would get violent within a matter of days, with the natives actually h... [More]

Could online gambling come to China?

The Asian i-Gaming conference recently wrapped up in Macau. As far as we can tell, the only news coming out that was relevant to our readers is the idea that online gambling might someday become legal in China.

According to this report filed last week in the Macau Daily Times, Galaxy Entertainment Group is investigating a future move into mainland China.

Holy crap! If China allows online gambling, then the industry will see an explosion.

The article mentions that the Chinese mainland "has 67 million internet hosts, 167 million internet users and more than 450 million mobile phone users."

I wonder how quickly the american government would move to legalize, regulate, and even encourage online gambling should the chinese market open up.

Mastercard lobbies on behalf of internet gambling

This is sweet. The newer lobbying rules demand that lobby group expenses and donations be revealed to the public in special disclosure forms each February.

So if you know what you are looking for, it is possible to dig up all kinds of cool information - and over the last few weeks there has been several media reports revelaing how much lobbying money was spent by different groups, such as the NBA, the PPA, and now Mastercard.

BussinessWeek reported this week that Mastercard has "spent $880,000 in the second half of 2007 to lobby Congress".

That's a lot of  money. What were their concerns?

The dsclosures say that Mastercard "lobbied on gambling regulations and the use of credit cards to purchase illegal material on the Internet."

As a credit card company, I imagine that Mastercard can see a future where online gambling laws turn their processes into logistical mightmares as they try to sort out which purchases are legal and which are illegal.

That's $880K well spent.

NJ racetracks get paid to stay free of VLTs

If you've been following this blog, you are aware of how we feel about the American Gaming Association's neutral stance regarding the UIGEA.

But this latest move by the traditional casino industry takes the cake and pretty much affirms what we have believed, which is that the AGA is scared shitless by the idea of online gambling.

According to this AP report in the South Jersey News, Atlantic City casinos have pledged $90M over the next three years to the horse racing industry. Supposedly, this money is to "supplement racing purses but also to support equine breeding".

What's the catch?

Well, as part of the deal, video lottery terminals (VLTs) would be banned in New Jersey during the three-year deal. This deal continues a previous agreement that saw the race tracks receive $86M over the last four years. So, all told, Atlantic City casinos will have paid $176M to keep VLTs out of the racetracks.

Gee, if they are that concerned about VLTs that they would pay that kind of money to keep them out of racetracks, I wonder how they really feel about the idea of American being able to gamble from their own homes?

Neutral? Yeah, right.<... [More]

Reality sets in for anti-online gambling legislation

Thje Washington Post has a fine piece today from business columnist, Cindy Skrzycki. In it, Skrzycki outlines the opposition lining up against the UIGEA strictly from an enforcement point of view.

With its many different carve-outs and loopholes, intentional or otherwise, and not even mentioning the fact that there are several bills being launched in opposition to this law, there is a real fear by the financial industry that this law could create an expensive situation that solves nothing.

The problem is summed up with this quote from the American Bankers Association: "If the federal agencies themselves cannot agree on the law, what hope is there that banks can resolve these confounding legal issues?"

That's just one of a host of negatives coming from several different perspectives.

The article even includes a wishy-washy quote from Frank Fahrenkopf Jr., president and CEO of the American Gaming Association. But even this is refreshing, since it's probably the strongest stance the AGA has offered against the UIGEA to date.