The NFL reaches a new low

Here's something that slipped under the radar last week, an excellent column by Tim Dahlberg of the Associated Press. Y'know, I completely forgot that the AP was still around, but I guess writers like Dahlberg are still trying to stay relevant by, well, staying relevant.

Anyway, in the above column, Dahlberg clearly outlines NFL's latest foray into hypocrisy - and this one doesn't even pass the laugh test.

The National Football League, which has very publicly adopted a self-appointed role as the scourge of all things gambling, has now licensed it's logos to appear on scratch-n-lose lottery tickets.

That's right. The NFL, which has aligned itself with anti-gambling organizations as Focus on the Family in the past, is now going to be getting a commission on the sales of NFL-licensed lottery tickets.

But without even cracking a smile, the NFL is still organizing a lobby effort to put a halt to Delaware's plans to allow betting on sports.

See. This is the type of crap that really drives me insane.

But other than Dahlberg, it doesn't seem like anybody in the mass media has noticed this completely indefensible act of hypocrisy by the NFL.

But there is one small bright spot here. ... [More]

New online gambling legislation introduced... here are the details

Well, it took long enough, but it's finally here.

On Wednesday, we finally saw the introduction of some long-promised online gambling legislation... but it just wasn't the legislation we were expecting.

It was actually much, much more, and not necessarily in a good way.

For the last few months, we've been expecting and waiting for Barney Frank's bill to overturn the much-despised UIGEA, and that's what we were waiting for on Wednesday.

Instead, we were treated to two different pieces of legislation from Barney Frank, as well as a companion piece  by Rep. Jim McDermott.

So, let's go through these bills, shall we? I'll even issue my own arbitrary Pass / Fail judgement for each.

Bill: Internet Gambling Regulation, Consumer Protection, and Enforcement Act
Sponsor: Barney Frank

It starts out with a few pages describing how established gambling and online gambling already are in America, and how there is a need for regulation in order to protect customers and children.

OK, good so far.

Then, after some of the usual legalese, we get to the basic outline for a licensing program for operators, which are sufficiently vague enough to probably eliminate most, if not all, current offshore operators.

This is not so good if you are a fan of ... [More]

Barney Frank's Legislation Coming Next Week

Barney Frank is a busy guy, and he looks to get even busier.

As Chairman of the House of Representatives Financial Services Committee, Frank is right in the middle of the financial crisis, so he can be forgiven for the repeated delays in his long-promised bill to overturn the much-hated and useless UIGEA.

But the delay may finally be coming to an and.

Frank was speaking today at the Reuters Global Financial Regulation Summit and when asked about his planned bill he said, "We'll be introducing it next week and I plan to move on it."

Things are about to get interesting.

With the economy in tatters and the financial industry being particularly hard-hit, it would seem to make sense to repeal a law that handcuffs financial institutions with ridiculous and unclear enforcement duties.

Furthermore, overturning this bill would please America's allies, such as the UK, who has been complaining about how the UIGEA is contradictory to WTO regulations.

So, this should be a slam-dunk, right?

Not so fast.

As far as I can tell, Frank's planned legislation sounds like a simple overturning of the UIGEA, and does not include any plans... [More]

He's baaack

No sooner did Bodog get their domain back, than Calvin Ayre reared his head up out of retirement for an interview.

About a year ago, Ayre retired from Bodog after supposedly handing over the company to the Morris Mohawk Gaming Group (MMGG) in some sort of licensing deal.

At the time, I figured it wasn't the last we had seen of Mr. Ayre, and while I was correct, I must admit that he held himself out of the news for a lot longer than I thought was possible for somebody with his ego.

But it sounds like Ayre is warming up for a comeback. In that way, he's kinda sounding like Pat Riley... when things go sour, he drops out of sight; but when things start to turn around he'll pop right back up as if he never left.

Anyway, I must admit that I got some guilty pleasure from reading the interview. It offers some delicious bits of revisionist history.

For instance, I am loving the twist that Ayre and MMGG is putting on the deal to get back the bodog.com domain... Something to do with shell companies being already out of business in 2006.

Yeah, right. And that's why it took two years to get the domain back, and when you did it was through a licensing deal.... [More]

Zombie Attack! Bodog.com flickers back to life

Once again, I leave the office for a few days, and therefore the industry lights up with interesting, if not overly important, news.

It looks like the bodog.com domain is once again in the possession of Bodog, er, the Morris Mohawk Gaming Group (MMGG).

Currently, it is still redirecting to their bodoglife.com domain, but I imagine that will be changing shortly.

The domain has been in dispute now for at least two years, after Bodog failed to respond to a patent lawsuit and had the domain seized as part of the default judgement in favor of the patent-trolling plaintiff, First Technology LLC.

As of yet, MMGG is not releasing how much it cost to get the domain back, but a couple of stories (here and here) describe the deal as a "domain licensing agreement", which indicates to me that MMGG still does not own or control the domain, but rather is leasing it from First Technology.

Even this seems kind of murky to me. If First Technology is an American company, then are they even allowed to license the domain to a gambling company? Either way, I don't care.

But this news is definitely good for Bodog, which has managed to stay afloat for the last year despite a flood of negative publicity and the ... [More]

Big News... PartyGaming Settles with DOJ

This just in from the "Let's Make a Deal Department", the newswires are buzzing with the story that PartyGaming PLC has reached a non-prosecution agreement with the US Attorney's Office for the Southern District of New York.

The amount of the bribe fee? Only $105 million. To be paid in installments up until 2012.

Now, you might ask yourself, "Did he just say only $105 million? There's nothing only about $105 million."

You may be right, but we also have to put this in perspective.

As the Wall Street Journal notes: "The sum is broadly in line with market expectations."

That being said, only last December, one of Party's founders, Anurag Dikshit, agreed to pay $300 million to avoid prosecution.

So... one of the founders personally has to pay almost three times what the company has to pay? That doesn't seem right.

It appears Mr. Dikshit forgot the wisdom of Wade Boggs... never swing at the first pitch.

A Wider Perspective

I can't get over how fast things are suddenly moving in this industry.

Just last week, the US Attorney Catherine Hanaway caved  ... [More]

Breaking News: BetOnSports CEO Pleads Guilty

I don't know if this is an April Fools joke or not, but today former BetOnSports CEO, David Carruthers, pleaded guilty to federal racketeering conspiracy charges.

This news is definitely a surprise. I'm still digesting the information right now.

This timing is confusing... it's almost as if our backwards friend, U.S. Attorney Catherine Hanaway, is using this as some sort of odd response to the European Commission's report this week, stating that America's stance against online gambling was contradicting WTO agreements.

Either way, as the news indicates, it looks like Carruthers agreed to a bargain that will see the prosecution recommend a 33-month sentence.

Seeing as he has been in jail since the summer of 2006, that sentence sounds an awful lot like "time served" to me, and is definitely a far cry from the "20 years in prison and/or fines up to $250,000" which Hanaway claims in ... [More]

Greater Evil: Gambling or the Markets

Here are a few business news stories...

Bloomberg.com - December 31, 2008 - "Journal of a Plague Year: Faith in Markets Cracks Under Losses"

"It has been a year of record misery: the largest bankruptcy, bank failure and Ponzi scheme in U.S. history; $720 billion in writedowns and losses by financial institutions; $30.1 trillion in market valuation wiped out."

Timesonline.co.uk - February 11, 2009 - "Global stock market losses total $21 trillion"

"When equities bottomed on 21 November 2008, the MSCI World index had fallen 55 per cent since 31 October 2007. This worked out at a global loss of $21 trillion, or $ 21,000 for every individual in the developed world."

Foxbusiness.com - March 09, 2009 - "Internet Gambling Yield Passes US$20bn: Online Gambling Shows Resilience in Face of Recession"

"The total global interactive gross gambling yield surpassed US$ 20bn for 200... [More]

European Commission uncovers the obvious

Well, the European Commission completed an investigation recently and realized that America's stance against online gambling is, in fact, contradictory to WTO rules.

In other blockbuster findings, the Commission was astounded to find out that sub-prime mortgages are bad investments and that it just might someday be possible for a black man to be elected President of the United States.

Wow. How much did they pay for this investigation? Hopefully not a lot, because they could have found most of this out simply through browsing my archives.

Anyway, this is obviously the EU's polite way of reminding the incoming Obama Administration that there are some easy ways for America to make friends with the international community.

It'll be interesting to see if this topic gets raised during Obama's first official trip to Europe as prez.

Isn't a vacation supposed to be relaxing and refreshing?

Well, I just got back from a few weeks of vacation and I already need another.

I took the family down to Cancun for a week, and I can't really complain about that. It was warm, and that's what I was looking for.

Unfortunately, I was also looking for some relaxation, and when you are vacationing with two spirited kids (aged 3 & 6), it just is never as relaxing as it looks in the brochures.

Our trip to the local market took months off my life, but I'll leave that for the autobiography.

Anyway, the topper was returning to Nova Scotia and having to wade through a snowdrift in my driveway, wearing flip-flops no less, just to get to the door.

I don't know if it's my age or what, but I'm getting really tired of winters. Granted, getting this much snow this late in the winter spring is rare in Nova Scotia, but I'd rather if it was NEVER, instead of just rare.

Well, either way, I guess I'm back on the clock, so I'd better start blogging.

USTR Nominee Might Approve Online Gambling

President Obama's nominee for the office of US Trade Representative, Ron Kirk, seems to have already painted himself into an online casino corner.

No sooner had he agreed to pay his back taxes - I didn't realize there was a choice - than Kirk stated in his confirmation hearing that the Obama administration wanted to ensure "the strongest possible enforcement" of trading rules.

Hmmmmmm. That should spell good news for online gambling, no?

After all, the WTO has already ruled that the USA is violating international trade rules with regards to its stance against online gambling.

Now to be fair, when Kirk made these comments it was in the context of trade deals with Asian countries and not in respect to online gambling.

But if the Obama Administration truly wants to be viewed by the world as a principled and honest government, well, then it can not pick and choose which trading rules it wants to enforce.

No, it would have to follow ALL of the rules.

And that means that A... [More]

Missing a $50 billion opportunity

Fifty billion dollars.

That's what America is leaving on the table by not legalizing, regulating, and taxing online gambling right now.

Fifty billion dollars.

According to a report by PriceWaterhouseCoopers (PWC), America could raise over $50 billion by repealing the UIGEA and taking online gambling.

Fifty billion dollars.

Now, y'all might remember that last year I wrote about a similar report by PWC that stated potential online revenues of only $42 billion.

So, what changed in the meantime?

Nothing. In fact, that is the most startling part of this report.

Last year's analysis factored in the likely effects of the UIGEA and its then-probable dampening effect on the online gambling industry.

This year's analysis realized that the UIGEA, in fact, has done very little to stop the growth of the online gambling industry, and therefore PWC increased the upper limit of the industry's potential by another 20%, given that the industry obviously is stronger than they originally expected.

So there you go.

As this report underscores, the UIGEA represents the worst kind of legislation. ... [More]

Responsible gambling is a two-way street

As a biased industry observer, I admit that I generally try to put a positive spin on gambling news, while pushing for industry and legal changes that I think will help grow and improve the industry.

But sometimes I feel like a PR guy on Wall Street. It gets tough trying to defend your position when you have no control over some of the stupid decisions being made around you.

Early last year, I took William Hill to task for it's part in allowing an obviously sick individual to lose £2.1m, including a single wager worth £347,000.

I also chided UK regulated gaming companies when the news came out that they were not volunteering their financial support to charity.

In my opinion, when you operate a gambling enterprise, it is just plain bad business to NOT do everything in your power to be socially responsible.

Especially when you rely on the whims of politicians for your livelihood. The best way to get your industry legislated out of business is to act in a manner that creates recurring news stories about people losing their jobs and life savings because somebody in your industry took advanta... [More]

North American jurisdictions racing for sports betting dollars

BANG! The race is on!

The dust is settling after the Presidential race, and now another race is beginning... which North American jurisdiction will be the first to fully embrace sports gambling - and take it online?

Of course, it all begins with first making sports betting legal.

Already in America, there are several jurisdictions that do NOT outlaw sports betting. Those are Nevada (of course), Montana, Oregon, and Delaware.

In Canada, most provinces already allow betting on sports lotteries offering poor odds - including online betting.

But now comes the interesting part... these jurisdictions have to decide whether that are going to sit on the fence or if they are going to attack the market.

Oregon has already hosted sports betting in the past, but was bought off by the NCAA, which is hosting basketball games in Oregon during next month's tournament.

Already, interesting things are happening in Delaware, as USAToday reported last week. While there is expected anti-gambling lobbying to come from the NFL and other leagues, it seems pretty likely that Delaware will soon be offering a sports lottery similar to the Canadian model.

That means that, very soon, there will be legal sports betting within a half-hour drive from Philly, Baltimore, and Atlantic City. I think it is safe to say that the states... [More]

Marketing Online Gambling to Politicians

HEY AMERICA! Looking for a SURE-FIRE way to fight the RECESSION BLUES?

Why not take a look at the HOTTEST TREND IN EUROPEAN BUDGET FASHION?

ONLINE GAMBLING!

STOP relying on FLAWED PRODUCTS like ECONOMIC STIMULUS PLANS* or COMPLICATED FINANCIAL BAILOUTS  to clean up your MESSY BANKING SPILLS and LEAKING BUDGET PLANS!
 
Those just get STOLEN, EMBEZZLED OR DIVIDENDED to RICH FAT-CAT CEOs!

NO MORE BREAKING INTERNATIONAL TRADE RULINGS, that just throw INTERNATIONAL TREATIES INTO QUESTION, while RUINING YOUR COUNTRY'S REPUTATION!

SMART EUROPEAN JURISDICTIONS have an additional tool in their belts... And that is REVENUE FROM LEGAL AND REGULATED ONLINE GAMBLING!

But don't take our word for it... Listen to the ISLE OF MAN!

Isle of Man: "I love ONLINE GAMBLING! I used to be a forgotten little piece of rock in the Irish Sea who was only known for mustaches and being the birthplace of the Bee Gees. Then I found out about ONLINE GAMBLING!

Now, despite the world being mired in a RECESSION, I can still table a ... [More]

How is the recession affecting the gambling industry?

As I mentioned earlier, upon entering the conference floor at the International Gaming Expo, one is immediately inundated by sensory overload... noise, colors, sex... it's all here.

What isn't here? Any sign of the looming recession.

This is an alternate universe, where down means up, excess means restraint, and the recession means opportunity.

In fact, there are only three types of people here:

- Those who pretend the recession doesn't exist.
- Those who will only talk about the recession in hushed tones, quietly accepting that there is an actual recession but it doesn't seem to be affecting them.
- Those who accept the recession with comments such a, "It's awesome! When the economy goes down, my sales go up!"

In reality, the recession seems to be affecting different industry segments quite differently.

On the one side are the companies servicing the land-based casino industry. These are the exhibitors who talk to you with uneasily broad smiles as they tout their latest amazing inventions, not knowing for sure if they will ever be able to sell it to actual casino operators. They've seen the news. Las Vegas ... [More]

Welcome to the International Gaming Expo

Well, here I am in London, attending the International Gaming Expo, which might also be known as the "ICE Show", the "ICEi Exhibition", or my personal favorite... "A Gaming Conference in a Place Where it Isn't Freakin' Snowing or ICE Cold".

Unfortunately, while it might not be snowing, it's still pretty miserable today. Drizzly, and maybe one degree above freezing. Too warm to wear a parka. Too cold to wear anything lighter. Welcome to the UK.

While I am here for wider reasons than simple blogging, the event does give me a chance to catch up on industry happenings and disperse it to those lucky enough to read my posts.

So, what have I seen so far?

Well, my first day was greatly marred by the disorganized nature of the conference.

Despite my online registration, I still had to suffer a lengthy wait to get my conference pass.

First, we waited 15 minutes in one line before somebody told us all to go wait in another line. Then, somebody else told us to go back to the first line, where a third person told us it would be faster to go back outside and walk around to another entrance where the line would be shorter... but it wasn't. After finding a third entrance, we finally made it in.

Time elapsed... one hour. I hate conferences.

Once inside, people are greeted by a sight that can only be described as the offspring of an u... [More]

Playboy Poker shuts down

Wow, I'm impressed with myself.

I actually suppressed my desire to title this post "Playboy Poker Goes Tits-Up".

I'm growing up.

Anyway, a bit of bad news here. According to Gaming Alerts, Playboy Poker has notified its users that it will be shutting down.

I don't know what is more surprising to me. The fact that Playboy couldn't make this work, or the fact that Playboy actually had a poker site and I didn't even know.

Thinking back, I guess I do vaguely remember the news that Playboy was opening a poker room, but they have been so irrelevant for so long that I just forgot about them.

This latest news marks the third time Playboy has unsuccessfully waded into the gambling business.

A few decades ago, I believe they tried to open a chain of land-based Playboy Casinos, which never found a market.

Then they tried to open an online casino in the late 90's, but got scared away by Senator Kyl's war against online gambling.

And now this.

Poor Playboy. The last decade has seen Playboy go from being a dominant publisher with bags of money, to an also-ran brand with a diminishing subscriber base that may-or-may-not b... [More]

Could the world be flat in Kentucky?

It's been a while since I've blogged, so forgive me.

The worst part about taking time off from blogging is knowing how to get back started. If a story breaks during your hiatus, then you are torn between re-hashing old news or looking like you missed the story completely. At least I've been helped by the fact that the last month has been a generally slow time for news surrounding the online gaming industry.

The biggest news of the last month has generally been coming out of two issues...

The settlement between the DoJ and PartyPoker founder Anurag Dikshit, and the seemingly never-ending saga  in Kentucky regarding the domain seizures.

Since I've already discussed the Dikshit situation, I should probably forget about it for now, although I must admit that I love typing the word "Dikshit".

Dikshit. Dikshit. Dikshit.

OK, that's enough. Let's jump right into the Kentucky story, shall we?

In case you were not aware, it all started back in September when the governor of the backwards state of Kentucky decided that he was also the governor of the Internet. Without any provocation, he filed a legal request to ... [More]

PartyFounder Pleads Guilty

This story keeps getting more interesting.

So, the deed has been done. PartyGaming co-founder Anurag Dikshit yesterday agreed to plead guilty and has forfeited $300 million.

So, what is interesting about this?

Well...

First of all, he is paying $300 million!!! Holy crap! According to the Financial Times, he's paying $100 million immediately, another $100 million in three months, and a final $100 mill by September 30, 2009.

Secondly, his sentencing is not scheduled until after his final payment. By then, he will be at the mercy of a likely pro-gaming administration and will have had forfeited $300 million. So, I don't think he's going to see any jail time.

Thirdly, Party's stock jumped by about 35% since the news of this deal broke the other day. Since Dikshit owns 27% of the stock, my my back-of-the-napkin calculation tells me that he's already made about $60 million back from his $300 million "investment". And if this deal ever allows Party back into the US market, this deal will be one of the sweetest on record.

Finally,... [More]

PartyGaming Founder to Cut a Deal with the DoJ?

Now this is interesting on many levels.

According to the Financial Times, PartyGaming's co-founder, Anurag Dikshit, will take his money and his unfortunate surname to New York today to cut a deal with the Department of Justice.

The article claims that while no plea bargain has been arranged, there is a deal in place where Dikshit will agree to pay $300 million.

What? This is an insane story.

First of all, why in the world would Dikshit want to make a deal now, when all indications point to a more gambling-friendly environment once the new Obama administration takes control in only five weeks?

Furthermore, why would he go into this agreement without a plea bargain, risking actual jail time?

There is definitely more to this story than is being reported right now. Frankly, this whole situation reeks of behind-the-scenes pressure being applied by US authorities in unmentionable ways.

Otherwise, why whouldn't Dikshit wait a mere month to cut his deal if he wasn't being pressured with some sort of "deal with us now, or else you will regret it" kind of proposal? The DoJ obviously has something to hold over his head to force him into this right now.

Either way, this situation - and the fa... [More]

Is Mobile Betting taking off?

I just saw this press release from Juniper Research... Mobile Betting to Hit $3.6bn in 2009, Beating Global Recession.

Well, it took long enough, but it looks like mobile betting is finally going to happen.

All I can say is, "It's about goddamned time!"

Having been in the sports gambling industry now for well over a decade, I can not tell you how many times I have been told that I need to prepare for the mobile betting boom.

In fact, we here at Covers have probably introduced at least five different mobile platforms and products over the years, and not one of them has really been a hit.

Even as I write this, it is still possible for you to download Covers Mobile, which I happen to think is a nifty little application for phones. It's been out there for about a year and probably needs a bit of polish but it works great on my Blackberry. I am probably the only person in the universe who uses it regularly, but it has also come in handy on many occasions.

But while that was a nice plug, it is not the reason for this post.

No, my point is that Juniper Research seems to think that mobile betting might actually be about to take off.

The question is: Why now?

Frankly, I didn't feel like ... [More]

Washington Post completes the online poker investigation

Anybody following the public de-pantsing of the online poker industry can continue following it at the Washington Post.

Last night, 60 Minutes televised its report outlining the basic dirtiness surrounding the cheating scandals at Absolute Poker and UltimateBet.

That investigation was a partnership between CBS and the Washington Post.

So it comes as no surprise that WaPo has completed the circle this weekend with a very in-depth discussion of the scandal, as well as including background information about the Kahnawake reserve.

While a lot of the WaPo report is a rehash of the 60 Minutes piece, of particular interest is the discussion about the pros and cons of regulating the online gambling industry in America, titled Prohibition vs. Regulation Debated As U.S. Bettors Use Foreign Sites.

For anybody wondering how, if, or why online regulation could happen in America, this is a must-read.

Kudos to the Washington Post for bringing this story to the forefront.

Ouch! 60 Minutes Hammers Online Poker

All things considered, it was a very fair report. There is no other way to look at it.

Last night's 60 Minutes covered online poker's worst moment in full detail, from the popularity, to the insider cheating, to the lack of punishment.

It was cold hard truth.

And for many online gamblers, it really was a wake-up call. There are literally millions of online poker players - and their spouses - and I'm sure that this report shocked more than a few of them. And that is why this report was necessary.

For me, the scariest part is when the Kahnawake grand chief is asked why they didn't suspend the licenses of the companies involved, and he answers, "Well, they were afraid that if that was happened and the rug was pulled out from under them, so to speak, that the players wouldn't be paid."

Excuse me?

Exactly what kind of gaming commission are you if you can't even ensure that cheated players will be paid? Apparently, companies licensed in Kahnawake are not required to post bonds or deposits ensuring that they can pay all players.

That, in itself, is pretty scary. Protecting player deposits is assumed to be the first priority of any gaming commission. That does not appear to be so in Kahnawake.

Now, over the last decade 60 Minutes has covered online gambling fairly positively s... [More]

60 Minutes to Cover Online Poker this Sunday

Uh-oh.

Last March, I did a post about how the 60 Minutes crews were interviewing online poker players and digging into the cheating scandal at Absolute Poker. A few months later, another scandal broke out at UltimateBet, which happened to be owned by the same company.

At the time, I thought the results of the investigation would be televised shortly.

I was wrong about that, and over the ensuing months I gradually forgot all about the story. I kinda figured that maybe 60 Minutes shelved the story.

Not so.

According to CBS, they will be broadcasting that story this Sunday. You can see a preview of the story here.

As you will see from the clip, this does not look like your run of the mill puff-piece. They are going to talk about the cheating. In detail.

Frankly, I don't know whether to be ecstatic or very scared.

On the one side, this is a story that needs to be told. Not only is it an interesting story about smart people using their brains to solve a crime that the nobody else was taki... [More]