Gambling giveth and taketh away

First the good news...

Sportingbet.com announced yesterday that a Greek player, K. Vasileiadis, managed to win approximately $1.5 million playing at Paradise Casino.

Playing the Super Seven slots game, Mr. Vasileiadis proved that it takes no gambling talent whatsoever to become a millionaire online. The press release does not indicate how much money Mr. Vasileiadis had lost to Sportingbet prior to his big win.

I like this story because it does a nice job of reminding people that online casinos are big enough to have significant jackpots, and are reputable enough to pay out when the jackpots hit.

Now the bad news...

Australia has been following the story of Kym Andrew Sellers, who by all appearances was a well-trusted shares trader, but who also was a pathological gambler responsible for defrauding his clients in the amount of $343,044 AUD (about $320K US) over a 2.5 year period ending in September of 2007.

This situation reveals a system and environment that just wasn't working for poor Mr. Sellers.

Not only was he able to continue losing... [More]

This is where the transaction processing fees go

An interesting story popped up in my Google Alerts today... Apparently the people of Queensland, Australia are all atwitter about the recent purchase of the most expensive real estate in the area - and the mysterious and young new owner.

Actually, it's not much of a mystery, as the article mentions the new owner's name is Daniel Tzvetkoff, the 25-year-old co-owner of online payment processor, Intabill.

Mr. Tzvetkoff paid $28m for his unfinished dream home, and the article mentions that the place is expected to be worth $50 to $70 million when the place completed.

25-years-old? $28 million? $70 million?

Those numbers got my attention. So I did a bit of research and found that, according to this guy at least, Mr. Tzvetkoff's companies are viewed as somewhat less-than-reputable.

Right now you are thinking, "What is this... Australia's Lifestyles of the Rich and Famous? Why do you care?"

Because this is the state of the online transaction processing industry - and by extension the online gambling industry.

We are living in a world where America's financial restrictions and disregard for international commerce has created an environment where a 25-year-old Australian with questi... [More]

The FBI wants to know what you click

CNET posted a story yesterday that should strike fear into the hearts of all Americans.

According to the story, on Wednesday FBI Director Robert Mueller suggested to the House of Representatives Judiciary Committee that the FBI "should have a broad 'omnibus' authority to conduct monitoring and surveillance of private-sector networks" along with their current plan to "monitor traffic on federal-government networks".

This is a very scary proposition. As the article explains...

If any omnibus Internet-monitoring proposal became law, it could implicate the Fourth Amendment's guarantee of freedom from unreasonable searches and seizures. In general, courts have ruled that police need search warrants to obtain the content of communication, and the federal Wiretap Act created "super warrant" wiretap orders that require additional steps and judicial oversight.

In addition, it's unclear whether "illegal activity" would be limited to responding to denial-of-service attacks and botnets, or would also include detecting other illegal activities, such as online gambling, the distribution of "obscene" images of adults engaged in sexual acts, or selling drugs without a license.

Basically, what Mueller is suggesting is blanket surveillance of the internet activities of all Americans.

Now, the... [More]

Calvin Ayre retires?

The official retiring of Calvin Ayre from Bodog made the mainstream news this week as the Vancouver Sun gave it some somewhat skeptical coverage.

As the story mentions, Ayre claims to have transferred ownership of the company to the Morris Mohawk Group and so Bodog is now completely operated out of the Kahnawake reserve, just outside Montreal.

As with everybody else, I personally am taking a wait-and-see attitude towards the purported retiring of Ayre. He is a person who built the Bodog brand completely around the image of himself as the billionaire playboy. Only last week saw the official release of "Ayre Force" a graphic novel depicting Ayre and his force of superheroes who do battle with evil.

For Ayre to drop out of his leadership role and remain out of sight for any period of time seems unlikely. But after the last few years, he probably could use a vacation.

The story also notes the few details provided about the actual business transaction which saw Bodog's ownership transfer. This is a company which claimed to process billions of dollars in wagers each year, so you would have to assume a purchase price in the billions.

The Sun also today ... [More]

Antigua mulls appealing WTO decision

The Anigua Sun reported the other day that the country is considering appealing the WTO decision regarding the online gambling dispute between Antigua and America.

You might ask, "I thought Antigua won that case. Why would they appeal?"

Good question.

Yes, Antigua won the case, but the issue is the size of the award granted Antigua.

Antigua might have been reaching a bit by asking for compensation in the range of $3 billion per year, but it was viewed as a number that took into account the potential range of services (sportsbetting, casino, poker, horseracing, etc.) and the potential revenue that America was denying Antigua by blocking access to the American market.

However, the WTO took a very limited view and only awarded compensation of $21M per year, which only reflected the horseracing market.

This view flies in the face of the basis of the actual decision, which Antigua won because horseracing is a form of gambling, and to allow online horseracing gambling in America and still disallow foreign competition is, well, against pretty much every business treaty America has ever pushed for. To limit the award to strictly horseracing market losses is conceivable, but not really in the spirit of the actual case and decision.

At least, that is the opinion of A... [More]

US officials warned not to implement UIGEA

The Hill.com posted some great news yesterday, as Barney Frank and his pals have sent an official letter to U.S. Treasury and Federal Reserve officials telling them "not to waste any more time trying to implement a ban on online gambling".

In other words, they are giving a direct order not to enforce the UIGEA.

It doesn't get any clearer than that.

This is awesome news, but don't get too excited just yet, as there is still a long way to go.

For one thing, don't expect any US-based banks to start processing any gambling transactions anytime soon, as that is still technically against the law.

But the good news is that this edict might hopefully serve to bolster the confidence of offshore processors to start opening their doors to Americans again. After all, if the offshore processors know the US banks are no longer required to monitor the transactions, and both sides know that that the offshore operations are not technically doing anything illegal, then why not start accepting credit cards again?

It'll take a while before this happens, but the door is now open.

Poker Players Alliance hits 1M members

The Poker Players Alliance is getting some well-deserved respect these days.

The Politico website is giving props to the PPA, as the organization has hit the kind of membership level - one million members - that starts to get serious attention from politicians and government officials.

As the article mentions, the National Association of Realtors is of a comparable size, with 1.3 million members. But what is startling is that the PPA has grown to this number in such a short period of time, having only been founded in 2005.

With a million potential voters as a group, this organization has teeth.

Time interviews Betfair

Time.com yesterday released a nice short interview with the founders of Betfair.

If you haven't heard of Betfair, it is because they are a British company that makes enough money that they have made a concious decision to obey America's ridiculous laws - whether or not they agree with them - and therefore do not advertise to or accept American customers.

Which is really too bad, because Betfair's betting interface and business model is the coolest thing out there. At it's essence, it is a person-to-person betting exchange which matches your wager against somebody else.

Anyway, the Time interview is basically a fluff piece, but it kind of has to be, because Betfair really has done everything right. There's nothing to hammer them on.

They have built a great company that makes piles of money, and they are obviously very smart but very modest businessmen. On top of that, the company and the technology is very cool and cutting edge. Finally, they are even obeying the law. From Time's perpective, it just doesn't get any better than this.

The key takeaway I get from the piece is how these guys seem content to bide their time and wait for the American market to open up - but they are anxious all the same. You can... [More]

A typical online gambling opponent speaks

I find that people on our site - and by that, I mean me - get ourselves so immersed in the online gambling experience that in a very short time we become completely intolerant of people who just aren't getting it yet.

That's why every now and then I have to take a step back and just laugh when I read a story penned by somebody who obviously doesn't understand the situation, or chooses to ignore the facts. It's a matter of personal sanity. I know there are some people who will refuse to be reasonable in the face of facts and reason, so I have to just laugh and pretend they are joking.

Case in point... take a look at this op-ed piece that just appeared in the Nevada Appeal.

This is one of the most backwards, protectionist, ill-researched articles to appear in a supposedly fact-checked news source in a long time... but I'm not going to get mad.

It is written by somebody named Guy Farmer who, as the article's footer explains, was once the public information officer for Nevada's gaming control agencies during the period 1963-66. That's right. He was a spokesman for the Nevada Gaming Control board 45 years ago, so that obviously means he is completely qualified to analyze and consult upon the current state of the industry.

Anyway, Guy's beef starts with the ... [More]

A closer look at Kahnawake

The Toronto Star released a great article over the weekend which gives a somewhat different perspective of the Kahnawake reserve outside Montreal.

As most people are aware, the Kahnawake reserve is the home to approximately 500 internet gambling websites, but that is really all they know about it.

Well, TorStar reporter Lisa Wright does a nice job of probing a bit beneath the surface and explaining a little more about the tiny reserve that holds all the cards servers.

The article touches all bases, getting some nice sound bites (can you have sound bites in a print article?) from everybody.

For instance, Liberal MP Roy Cullen, who has threatened to bring the online gambling issue to a head in the Canadian House of Commons says, "I think something is going to happen. My preference would be to open it up and regulate it."

Atta-boy, Roy!

The article also mentions how Bodog is moving into Kahnawake, which should bring lots of jobs, but also increased scrutiny.

Either way, I applaud the Toronto Star for being one of the few Canadian papers really following this story, and continuing to cover it with both well-balanced and readable stories as well.

NJ: Gambling can pay for stuff

NJ.com released a story over the weekend basically stating the obvious, which is that gambling is a great potential source of revenues for state budgets. Apparently, they are only figuring this out now.

I kid, but the underlying facts of the matter are very serious. There is a huge and relatively untapped source for state revenues available out there, and with the economy struggling, we are going to see a lot more politicians taking the leap and going to the people with plans to offer more gambling options.

For a state like New Jersey, it is a much easier sell. Gambling has existed now in Atlantic City literally for decades, and yet the state still can't seem to get it right. As the article states, "While only Nevada casinos generate more revenue, New Jersey takes in fewer tax dollars from gaming halls than five states -- including Pennsylvania. New Jersey was the only state last year with a net loss in casino tax revenues."

So whatever they are doing right now in Jersey, they are doing it wrong. It doesn't take a detective to sniff out that there must be a lot of strange accounting going on. At the very least, there is lots of room for improvement.

As a sports gambling fan myself, I am particularly hopeful about the possibility for sports gambling in New Jersey. It's an idea that has ... [More]

Is the gambling industry really recession-proof?

One of the trusted truisms of modern business is that the casino and gambling industries don't suffer the same fluctuations as the general business community.

When the economic cycle goes into a downswing, so the theory goes, people still need the psychological release that comes with gambling. In short, people who like to gamble will gamble. I even saw a stat once that indicated that lottery revenues actually increase during recessions, but I can't find that link now.

Sure, there might be a small decrease in the amounts people gamble during tough times, but in general they still like to keep their hands in the game. Hence the term "recession-proof".

Or so the theory goes - until now.

The Nevada Gaming Control Board last week released its monthly figures for February. The kind folks at the Las Vegas Review-Journal posted them the other day, and they weren't pretty.

The article explains the many ways February seemingly lined up perfectly for maximum revenue potential, yet it still saw the Vegas strip casinos experience a three percent drop in gaming win revenue from last February.

Ouch! Or as the article says, "OK, now it's time to panic."

It is now becoming glaringly obvious that the current recessing economy is undoubtedly being felt in Sin City.

The question is, "... [More]

Antigua finally recieves dispute settlement proposal from America

When we last visited this topic a couple of weeks ago, Antigua was eagerly anticipating a settlement proposal from America in its ongoing WTO trade dispute over gambling, which had by then blossomed to potentially include intellectual property such as entertainment and pharmaceuticals.

However, that anticipation was shattered when the American trade office missed the end-of-March deadline in a hilarious April Fools practical joke on the small Caribbean country - which is about a tenth of the size of Rhode Island and hosts a population in the range of 85,000.

In the meantime, and apparently unreported by the press in either country, it turns out that America finally DID present their proposal to Antigua, sometime between the first of April and the following Monday.

I know this because the Antigua Sun published a story on Monday, April 7, which opens with this paragraph...

"The government may be prepared to make a statement... [More]

ePassporte exits America, what now?

Anybody on the fence about whether or not the online gambling community needs legalization and regulation should look no further than what is happening right now to online poker players.

If you haven't heard, ePassporte, probably the last (definitely the largest) ewallet payment processor still serving US customers has officially stopped serving those customers - and in a rather sudden fashion too.

This story erupted on Friday, but I basically ignored it because it wasn't in my sweet spot (ie. sports and legal) and because I had no idea of the impact. Now that the full impact is becoming evident, I figured it was a story worth covering.

The way it all shook down speaks volumes about both the general need for customer protections and ePassporte's need for better internal and external communications. Poker site, poker-king.com has a play-by-play description of the events that took place.

It all happened last Friday, April 11. Out of the blue, ePassporte deposits stopped working. Rumors immediately started flying, and the situation wasn't helped by the fact that ePassporte's customer service reps were telling people that it was just a temporary technical problem.

As the day continued, it gradually became known that the problem wasn't technical, but rather it was a decision by ePassporte to no longer do busine... [More]

Online gambling finally hits the mainstream

A couple of months ago, I posted a column discussing the fact that the mainstream media was ignoring the topic of online gambling, and steps the industry could take to encourage more positive media coverage.

Well, what a difference eight weeks can make - and all it took was the help of a gay Congressman in Barney Frank, a libertarian Republican presidential candidate in Ron Paul, and the American Bankers Association (ABA).

Talk about strange bedfellows. I hope you will forgive me if I didn't see that coming.

Regardless, the last few weeks have seen coverage (of the UIGEA hearings) of the industry coming from such major mainstream sources as the NY Times, the ... [More]

The lowdown on H.R 5767

As suspected on Friday, the fact that there was no record of H.R 5767 was just a matter of time. Already this morning, the Library of Congress site has been updated to include the bill.

And what a bill it is!

Does it repeal the UIGEA? No.

But according to the text of the bill, it is meant "To prohibit the Secretary of the Treasury and the Board of Governors of the Federal Reserve System from proposing, prescribing, or implementing any regulation under subchapter IV of chapter 53 of title 31, United States Code, and for other purposes."

In other words, the UIGEA remains, but the Treasury is to be forbidden from enacting any of the provisions within the UIGEA.

Now, a word of warning... it is far too early to get excited about this.

This is just a bill, and like all bills (except the UIGEA) it needs to be debated and voted upon.

There are still a lot of folks out there who don't want to see online gambling in America, so the road ahead for this bill is a rocky one at best.

But - Hey! - it's a great start.

Will Congress repeal the UIGEA?

The Safe and Secure Internet Gambling Initiative fired off a press release today stating that Barney Frank and Ron Paul introduced a new bill yesterday that would prohibit any of the restrictions prescribed in the UIGEA from being implemented.

If this story is true, then this is fantastic news. Not surprisingly, this story is bouncing around the gambling community like a superball.

Unfortunately, I can't find any record of this bill in the List of Bills Introduced in the 110th Congress located on the official Library of Congress website.

Hopefully this is just an oversight.

If the bill was just introduced yesterday, then there is a good chance that the website just hasn't been updated yet and it will be updated early next week.

I hope.

Gambling in Canada... it's huge, eh?

If you are at all interested in the gambling industry in Canada, then some very interesting information was released this week by the Canadian Gaming Association (CGA).

The CGA commissioned a study called the Economic Impact of the Canadian Gaming Industry and this week released its Key Findings Report. And this thing holds some pretty fascinating facts.

For one thing, gambling in Canada is a MUCH bigger industry than even I suspected.

For instance, the study claims that 267,000 Canadian jobs are directly or indirectly impacted by the gambling industry. Seeing that the entire Canadian workforce is probably only about 15 million people, then that means that one out of every 50 people in the country has their livelihood somewhat dependent upon gambling.

Another key take-away was the fact that the Canadian gaming industry generated over $15 billion in revenues in 2006. This makes it larger than the publishing, bar, spectator sports, movie theater, and performing arts industries... COMBINED!

You read that right. Gambling in Canada generates more revenue than all of those industries combined.

Wow!

It's worth mentioning as well that these numbers reflect the traditional Canadian gambling industry, which inc... [More]

WSJ: Time to Fold

The Wall Street Journal (Europe Edition) today published a great editorial opinion regarding the online gambling industry, and the title says it all... Time to Fold.

This is a great piece that succinctly covers all of the pertinent facts, including explaining how banks hate the UIGEA, and how the US has abandoned its traditional leadership role in virtually every circumstance surrounding this issue.

From free trade to legal jurisdictional issues, the US is acting truly out of character on this subject, and it would be shameful if America let its position on this, frankly, inconsequential issue lead to a situation where America's bargaining position in multiple markets is hampered for years to come.

The WSJ even manages to find a rare common ground with Barney Frank saying, "We have our differences with House Financial Services Chairman Barney Frank, but he may have been on to something when he introduced a bill to exempt licensed operators from the ban."

I would have to agree.

Will the AGA make itself useful for once?

As I have been travelling in Europe for the last week, it has been very difficult to find reliable and speedy coverage of the online gambling industry. Highspeed wireless is less prevalent than I thought. Not only does it get expensive, but any combination of factors can make it very hard to blog on the road.

For instance, right now I am using an ancient workstation at a Kinkos in Holland. It only has IE 6, and there is so much crap on the machine that it won't even load up my blog editor properly, so I am emailing this post to myself to update later for real.

But enough about me, let's talk about the hearings a bit.

I am going to sum everything up with a couple of quotes from appropriate people...

Here is a quote from Louise Roseman, head of the Federal Reserve's bank operations division, who testified "I think it is very difficult without having more of a bright line about what is intended to be unlawful Internet gambling... The challenge we have is interpreting something, particularly federal laws, that Congress itself isn't sure what they mean."

Ladies and gentlemen, let's give it up for Louise Roseman!

First of all, we can not understate how important it is that the Federal Reserve is getting involved here. Not only is this a sign to everybody that this is an important issue, but the Federal Reserve cur... [More]

NY Times is covering the hearings

Reporting from Europe on a connection so slow that it'd be easierfor me to type and fax my posts...

If you are looking for a sign that the UIGEA hearings are getting taken seriously, then look no further than the fact that the NY Times is giving the hearings some actual coverage.

Believe it or not, this is meaningful, because there are la lot of people out there who still look to the NY Times as their barometer of what is worth thinking about - and this is probbly the first time the phrase "internet gambling" has been uttered in the Times without it being a story about somebody getting arrested.

So why not take the time to post a comment on that story, letting the Times readers know what you think, and that you are most definitely not a criminal or a deadbeat.

And try not to curse too much either.

US ignores trade deal deadline

You know the old saying, "If you can't say something nice, then don't say anything at all"?

Well, America has put a new spin on that oldie... "If you can't do something right, then do nothing at all."

And with that, America let the deadline for it to propose a settlement to Antigua in the WTO trade dispute, pass without so much as a phone call or text message.

This just in... According to the American trade office, they were at a function at Damon's Bar and Grill when they realized they would miss the deadline. They tried sending  an apology email to an old iluvantigua_24@hotmail.com address that was in somebody's contacts list, but was surprised when it bounced back. Then they looked up Antigua in the phonebook but couldn't figure out how to enter a country code on their blackberry phones. So then they gave up and went back to watching the NCAAs.

Either way, it's another example of the American government setting the pace for international diplomacy.

They will keep delaying this until Antigua follows through on it's threat to begin pirating American intellectual property.

Bring it on, Antigua!