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Archive for September, 2006

September 30th, 2006

Louisiana ups ante in online gambling case

LOUISIANA governor Kathleen Blanco has voiced support for the state’s
crackdown on online gambling and renewed an extradition request for Peter
Dicks, former chairman of Sportingbet. The governor’s intervention came as
Mr Dicks prepared to attend a court hearing in New York yesterday to learn
whether he will be sent to Louisiana to face illegal gambling charges.
Lawyers for Mr Dicks, who was arrested in New York three weeks ago on a
Louisiana warrant, had hoped to halt the extradition process before the
hearing. But a spokesman for Ms Blanco said she was still pushing for his
extradition as part of efforts to enforce the state’s law against online
gambling. “If we do not enforce this law, online gambling would be
completely unregulated and that would clearly be an expansion of gambling,
which is unacceptable,” she told the FT. Barry Slotnick, lead defence
lawyer, acknowledged that Louisiana had “dug in” over recent days, raising
the prospect of a courtroom battle over Mr Dicks’s fate. “They are not
backing off,” he said in an interview. “We’re preparing our argument to
rebut what Louisiana says.” Thursday’s hearing in New York comes amid
increasing alarm among online bookmakers about the legal threat posed to the
industry by US anti-gambling laws.

William Hill, the British bookmaker, said on Wednesday it would no longer
accept casino and poker business from clients with a US address or credit
card, pending clarification of US laws.

The company had already stopped accepting online sports bets from US
customers.

Congress is considering the introduction of tough new federal laws against
online gambling, in addition to existing state laws such as those used by
Louisiana, to arrest Mr Dicks.

Louisiana’s Police Gaming Enforcement division told the FT this week that
arrest warrants had been issued for four Sportingbet representatives,
including Mr Dicks, after state police placed a bet with the company.

On Wednesday, Sportingbet, which is listed in Britain, said it had banned
board members from travelling to the US.

Mr Dicks may still be spared prosecution in Louisiana because of legal
questions over the legitimacy of the state’s extradition request.

Defence lawyers have argued that he cannot be extradited to Louisiana under
New York law because he was not in either state at the time of the alleged
crime.

Mr Dicks was allowed to return to Britain on bail two weeks ago while the
case was reviewed but he was ordered to return for yesterday’s hearing.

George Pataki, New York governor, has withdrawn a warrant needed for Mr
Dicks’s extradition because of doubts about the case.

Post at 4:30 am UTC by Jerry

Martin sentenced in illegal gambling case

Trainer Greg Martin was sentenced to two years probation and six months home
confinement on Thursday for his involvement in an alleged illegal gambling
ring that supposedly brokered more than $200-million in bets over a two-year
period. Martin was fined $2,000 and a $100 special assessment by Judge
Miriam Goldman Cedarbaum in United States District Court for the Southern
District of New York. Martin pleaded guilty in the case and faced up to
five years and prison and a fine of up to $250,000. Martin admitted in March
to administering A One Rocket a milkshake before the opening race at
Aqueduct on December 18, 2003, a race the gelding won by ten lengths. Martin
said he informed David “Pebbles” Applebaum of the milkshaking and understood
that Applebaum would pass that information along to other bettors in the
alleged gambling ring. In January 2005, federal prosecutors indicted 17
individuals on 88 counts for participating in the illegal gambling business.
One person indicted in the case has since died.

According to a spokesperson for the United States Attorney’s office, several
others indicted in the case have received sentences in recent months that
are similar to what Martin was assessed.

On March 29, Jeffrey Gruber received three years probation, six months home
confinement, a $2,000 fine, and $100 special assessment.

Jonathan Broome received one year probation, six months home confinement,
and a $100 special assessment.

On July 18, Paul Cuzzo received five years probation, six months home
confinement, and a $100 special assessment.

On July 26, Richard Hart received two years probation, six months home
confinement, and a $100 special assessment.

On September 20, Norman Ostrov was sentenced to time served and received a
$100 special assessment.

Post at 4:30 am UTC by Jerry

PartyGaming lifted by delay to US anti-gambling law

PARTYGAMING experienced a late flurry of buying on an apparent procedural
setback in Congress over America’s anti-gambling legislation.
Bill Frist, the Senate majority leader, has been seeking to attach the
anti-gambling measure to one of two “must-pass” Bills before Congress shuts
down this weekend ahead of November’s mid-term elections. But with
legislators keen not to hold up the progress of the politically sensitive
Homeland Security Bill, it was set to be pushed through yesterday without
the gambling curbs attached. Separately, there was no sign that efforts to
attach the anti-gambling measure to the Defence Bill – which itself appears
unlikely to get through Congress before tomorrow’s deadline – were making
any progress. Followers of the online gambing sector suggested that the
chances of the controversial legislation being passed this session had
virtually evaporated. Further, although it may get a fresh airing in the
so-called “lame duck” session – the period in which Congress still meets
after elections have been held, but before the newly elected Congress has
convened – there is also now the possibility that the legislative process
will have to be restarted next year, effectively meaning a six- month delay.

With short-term investors taking heart from the impasse on Capitol Hill,
PartyGaming rose 4¼p at 105¾p. The FTSE 100 gained 41.2 to5,971.3, with
natural resources stocks again making much of the running. Aside from
further gains in metals prices, miners were helped by a heavyweight circular
from ABN Amro, which believes that this month’s sell-off in the sector
offers a good buying opportunity. The Dutch broker says valuations appear
low relative to what is priced into other cyclical stocks.

Brambles jumped 20p to 488p as takeover talk refused to fade. One theory was
that the pallet maker could be a target for General Electric at around 600p
per share. A competing theory out of Australia overnight was that a private
equity house is mulling a move at A$15 (598p).

A more pedestrian explanation is that the gains owe more to arbitrage
activity ahead of Brambles’ move of its primary listing to Australia in
December. Under that scenario, proprietary traders who have been trying to
profit from a valuation disparity between the two listings have been
recently covering their short positions in the Australian stock, thereby
triggering a squeeze.

Elsewere, bid rumours continued to follow Hanson, up 25p at 746p, which
yesterday hosted an analysts’ visit to its operations bordering the Thames
Estuary. Speculative investors also continued to pursue Prudential, which
rose 6½p at 643½p, on persistently strong talk of an imminent 750p a share
offer.

Post at 4:30 am UTC by Jerry

Porn, gambling, liquor companies slapped for soliciting minors

Utah consumer protection officials have cited four companies for sending
e-mail solicitations to minors for Web sites promoting gambling, alcohol and
pornography. It was the second time this year state investigators issued
citations under the state’s controversial Child Protection Registry law,
which requires adult-oriented Web sites and e-mailers to screen out
addresses on the list from their distribution databases. Named in the
citations were DOS Media Now, an Encinitas, Calif., online gambling site
fined $5,000; Golden Arch Casinos, of Overland Park, Kan., fined $2,500;
Smoothbeer.com, a United Kingdom beer company fined $2,500; and
SoftestGirls.com, a Singapore company fined $20,000 for sending pornographic
e-mails to several minors. In January, the state issued its first, $2,500
citation under the statute to a Canadian online porn site for allegedly
sending a sexually explicit e-mail to registered minor’s address. “This has
become a very serious problem,” said Francine Giani, Commerce Department
executive director. “It’s a big issue for us, but parents can play an
important role in this process, too, by knowing and being aware of what
their children are doing on the Internet.” Utah’s Child Protection Registry
took effect in mid-2005. While its primary selling point with legislators
was to combat pornography, it also is designed to protect registered minors
from content promoting alcohol, tobacco, gambling, firearms and drugs.
Both Utah and Michigan, which has a similar registry, link mass e- mailers
to Park City-based Unspam Technologies. The company charges a half-cent for
each address that is removed. The registry is free for schools, parents and
other guardians of minors to use. Commercial e-mailers argue that the
registry’s time and cost are unfairly burdensome. The Free Speech
Coalition – a porn trade organization – is challenging the constitutionality
of the Utah law in U.S. District Court. Judge Dale Kimball has set a Nov. 9
hearing on the coalition’s motion for an injunction, and the state’s request
to dismiss the coalition’s lawsuit. Jerome Mooney, a Salt Lake City attorney
representing the coalition, said Thursday he was surprised by the citations
when the statute itself is at issue.

Post at 4:30 am UTC by Jerry

Program strives to help teens kick gambling habit

This week, Youth Eastside Services launched the first state-funded program
to help teens battle gambling addiction. The program is funded by a new tax
approved last year by the Legislature to pay for prevention and treatment of
problem gamblers. The tax is paid by the Washington Lottery, Washington
Horseracing Commission and groups with recreational gaming licenses. So far,
much of the state’s information about teen gambling addiction is anecdotal,
said Linda Graves, problem gambling program manager for the state’s Division
of Alcohol and Substance Abuse. The division operates the Washington State
Problem Gambling Program. The most recent study in 1999 found that 1 percent
of students ages 12-17 were problem gamblers and that an additional 0.7
percent were at risk to become gamblers, Graves said. The numbers have
likely risen over the years, given the prevalence of online gambling and the
popularity of TV shows such as “Celebrity Poker Showdown,” Graves said. One
of the biggest problems with identifying teenage gambling addicts is that
many parents don’t consider gambling a true addiction, Graves said.

“Parents let their kids play Texas Hold’em as a recreational activity,”
Graves said. “For most kids, they aren’t going to get into trouble. But for
some, it could be a trigger or a gateway activity for a worse problem later
on. Why let your kids engage in a risky behavior?”

Detecting problem gambling in young people is also a challenge.

There’s no “pee test” for gambling as there is for drug use, noted Chris
Sogn prevention and intervention specialist at Youth Eastside Services
(YES).

The YES program will counsel teens and parents on gambling addiction,
working with the youth to cope with cravings and depression, and teaching
parents how to take control of their teen’s money.

Gambling addiction is similar to drug and alcohol addiction in many ways,
with teens struggling to hide it from parents, and often using it as a way
to escape or to get a rush, Sogn said.

“Kids who are competitive may think, ‘I can make this work and it’s a way I
can make money without working at McDonald’s,’ ” she said.

Post at 4:30 am UTC by Jerry

Gambling Operators Are Warned

A senior Finance Ministry official told gambling operators to prepare for
hard times, while scantily clad girls danced outside the conference hall at
Moscow’s annual international gaming expo Thursday. Dancers dressed as
cowgirls moved to the din of slot machines at Crocus Expo, where hundreds of
casino bosses, slots operators and manufacturers of gambling equipment
gathered in the hope of understanding what pending legislation on gambling
means for their booming businesses. “Prepare for the worst and hope for the
best,” Alexei Savatyugin, chief of the Finance Ministry’s financial policy
department, told the conference. The State Duma is expected to vote on the
crucial second reading of the legislation as early as next week and no later
than November, Savatyugin said. The bill represents the Duma’s first serious
attempt to impose strict regulations on the gambling industry, worth nearly
$6 billion last year. The Finance Ministry’s Federal Tax Service has been in
charge of handing out gambling licenses since last November, but regional
authorities currently govern all other industry matters. “The stricter the
legislation, the more chances it will have to be approved by a greater
number of politicians,” Igor Dines, Duma deputy with United Russia, told the
conference.

Post at 4:29 am UTC by Jerry

September 29th, 2006

Catholic schools to stop raising funds via gambling

Catholic schools in Calgary have agreed to stop fundraising through casinos
and bingos, but it’s “business as usual” until they figure out how to make
up the $2-million shortfall, says the chairwoman of the school district’s
trustees. The issue arose when Calgary Bishop Fred Henry threatened to strip
the schools of their Catholic designation if they continued to raise money
through gambling. “We have to respect what our bishop has requested us to
do,” Cathie Williams said yesterday, adding some parents are concerned about
the decision. “Some of the programs that are in place right now have been
around for many, many years and the concern is that without this additional
funding, those programs will be lost.”

Post at 12:06 pm UTC by Jerry

Internet Gambling Bill has little chance of passing

After a brief skirmish over new identification requirements for cross-border
travel, it appeared House GOP leaders have agreed to let the $34.8 billion
FY07 Homeland Security appropriations conference report come to the floor as
early as today, GOP aides said. House Speaker Hastert and Judiciary Chairman
Sensenbrenner, key architects of the 2004 intelligence overhaul law
stipulating the requirements, had pressured appropriators to drop language
delaying them by 17 months. But the delay had broad support among House and
Senate Republicans, and in the end leaders did not want to hold up the
politically sensitive bill, which includes $21.3 billion for border
protection efforts — a 10 percent increase over the current fiscal year.
Appropriators Wednesday night were preparing to file the necessary paperwork
for leaders to bring up the bill under a “same-day rule” for floor
consideration in the House, possibly today. Senior appropriators on both
sides of the Capitol opposed opening the bill to further changes, arguing
they had struck a delicate balance and any changes would risk losing votes.
Senate Judiciary Chairman Specter and Sen. Larry Craig, R-Idaho, both said
they would withdraw their votes if changes were made without their consent.
“The conference report is over. It’s final,” said House Homeland Security
Appropriations Subcommittee Chairman Harold Rogers, R-Ky. Added Senate
Homeland Security Appropriations Subcommittee Chairman Judd Gregg, R-N.H.:
“This bill is closed. We’re not reopening it.”

Complicating matters further had been a House-Senate dispute over additional
immigration-related legislation sought by Hastert, and aides said they were
trying to resolve his concerns by either including those measures in the
defense authorization bill or exploring the possibility of moving them
during the lame-duck session.

Defense authorization

The prospects for passing the FY07 defense authorization bill before
lawmakers flee Washington this weekend dimmed Wednesday as House Speaker
Hastert and Senate Armed Services Chairman Warner remained deadlocked over
whether unrelated legislation should be attached to the bill.

Lawmakers leaving the meeting said Hastert and Warner still had not reached
an agreement over whether to attach federal court security legislation and a
controversial Republican measure aimed at detaining and deporting immigrant
gang members and speeding the removal of immigrant criminals.

Other House and Senate staffers indicated that there was little room for a
compromise, signaling that the bill would not move until one side backs
down. “Somebody needs to blink,” an aide said. Hastert has said Senate
Majority Leader Frist assured him the Senate would consider the
court-security and immigrant gang legislation before the six-week recess for
the elections.

With time running out before the planned recess, the defense authorization
bill was one of only a few options to serve as a vehicle for those bills.

But even as the Hastert-Warner standoff continued, House and Senate
conferees appeared to have resolved nearly all differences in their
competing versions of the defense authorization measure.

In the last several days, Warner and Hunter have agreed to compromise
language on a divisive House provision that would have allowed military
chaplains to pray in the name of Jesus Christ.

Separately, no movement was apparent Wednesday in the effort to add language
to the defense authorization bill to restrict Internet gambling.

Summary: Big news here is that Hastert (and by extention Frist) has
apparently given up on trying to attach his add-ons to the Homeland Security
bill. It is probably in gear to move through both chambers by Saturday.
Meanwhile, on the DoD Authorization side, Warner is holding firm on the
add-ons and it is unlikely to see debate before the lame duck session.

I think there is about a 10% chance of iGaming legislation passing before
the recess and I’ll stick to that assessment just to err on the conservative
side. If I were trying to put a negative spin on this, I’d say that to some
extent we’d rather have a complete meltdown than the gears moving at all,
even if the gears seem to be moving in our direction. But self-evidently
there is mostly good news.

There is apparently some big luncheon/cheerleading session between Bush and
GOP leaders scheduled for tomorrow. Just looking at the calendar, that may
be the best and last chance for any sort of major shift in congressional
strategy.

Post at 12:06 pm UTC by Jerry

Online gambling could face legal restrictions

Hoosiers who sit at their computers gambling online may be subject to
greater restrictions in the near future. State Rep. Joe Micon, D-West
Lafayette, and Republican candidate Connie Basham both believe restrictions
on the practice are necessary. Micon commented on state law, stating
“Currently, participating (in online gambling) is not illegal.” Indiana law
allows such participation but prohibits the operation of a server hosting
gambling within the state. To date, Washington is the only U.S. state that
prohibits gamers from logging on to poker, blackjack or other gambling
sites. Online gambling within the state is considered a Class C felony,
punishable with a $10,000 fine or five years in prison. ” (But) most states
have chosen the route of not criminalizing (it,)” said Micon.

He said taxing winnings may be a possible route for increasing state
revenue, but was confident saying “I think what we will see, in the relative
future, is state regulation of (online) gaming in the state of Indiana.”

Basham, the Republican candidate for the office, agrees and said that as
credit card debt for college students continues to be a problem, now is the
right time for regulation.

“Right now, we make it so easy for students to pile up debt,” said Basham.
“To use gambling to continue the cycle of debt … we need regulations in
place. I don’t want to see gambling expanded.”

She also commented there are already other significant gambling
opportunities in the state, hinting that online gambling is unnecessary.

“We want students to succeed. We don’t want them to go on a course for
failure.”

Post at 12:06 pm UTC by Jerry

Track Official Says Time Is Now For Table Gambling

The jingle of slot machines from neighboring Pennsylvania could serve as a
wake-up call for West Virginia lawmakers to approve table gambling, Delegate
Gil White believes. White, R-Ohio, said without table gambling West Virginia
could lose up to $50 million in revenue the first year Pennsylvania comes
on-line with its slot machines. Pennsylvania officials on Wednesday approved
licenses for five racing facilities in the Keystone State – including The
Meadows in Washington County. The horse track will provide direct
competition with Wheeling Island Racetrack and Gaming Center for slots
customers. Wheeling Island could cut up to 350 jobs if West Virginia does
not approve table gambling at its racetracks, said Bob Marshall, the
facility’s president and general manager. With table gambling, the track
could add up to 400 new jobs, he said. Marshall said 60 percent of Wheeling
Island’s customers come from Pennsylvania. To combat the anticipated loss of
customers and revenue, Marshall said the state Legislature needs to act
during its next general session in January. “We’ve been talking about this
for a couple years and the reality is it’s here,” Marshall said, estimating
Pennsylvania’s slots would be online in April. If approved by the
Legislature in January and then by Ohio County voters, Marshall estimated
people could be playing table games, such as blackjack, about this time next
year at Wheeling Island. Whether any of his 1,000 employees would be laid
off in the meantime, Marshall could not say.

He noted during the estimated nine-month transition period, many of his
current employees may receive training to become table game dealers.

“According to our polling, 61 percent of West Virginians would approve a
local option vote,” Marshall said. “This is a great opportunity to add
jobs.”

He noted Ohio residents are scheduled to vote upon allowing slot machines in
November. He expects Maryland to follow soon after. He said 30 percent of
Wheeling Island’s patrons come from Ohio, while only 5 percent are West
Virginians.

The addition of table gambling in Pennsylvania and Ohio, he believes, may be
inevitable, but likely will not happen for “years down the road.” When it
does, though, Marshall believes the competition between the racetracks will
be more even.

The challenge for Northern Panhandle lawmakers will be convincing their
colleagues in other counties to support the measure.

“It doesn’t take a rocket scientist to see that the day is here,” White
said. “For at least two years, I and others have been saying it was just a
matter of time before Pennsylvania was up-and-running with its machines, and
we knew this would adversely affect West Virginia’s annual budget.

“If we do nothing – and do not allow for table gambling at the racetracks -
the state’s coffers could be affected by $50 million.

“With no hesitancy, we need to move ahead with an aggressive format to get
the table gaming legislation passed,” he said. “We need to make certain our
colleagues understand that the day is here. What we have been predicting has
taken place.”

Delegate Randy Swartz-miller, D-Hancock, said he believes Gov. Joe Manchin
will not place the table gambling issue on the call for a special session
before January.

“Before January, we will make sure our colleagues are updated and educated
about what is going on, and we will be that much farther ahead come
January,” he said.

“There was a very good chance that table gambling legislation would pass in
this upcoming session anyway,” said Delegate Joe DeLong, D-Hancock. “We
already had expected that Pennsylvania would go online soon, so this was no
surprise. We saw it coming.

“But the political landscape has started to turn. After this next election,
the votes will be there to support the issue.”

DeLong said he senses public sentiment throughout West Virginia about table
gambling is changing, especially in the Eastern Panhandle.

He added the issue certainly won’t be far from legislators’ minds as they
assemble late this year for a special session on tax reform.

State Sen. Jeff Kessler, D-Marshall, said video gambling is the second
largest tax revenue source for the state.

“If we see this revenue reduced by 25 to 30 percent, we will either have to
cut programs or find other sources of revenue,” he said. “I prefer table
gambling because it is mostly out-of-state money being contributed to the
state’s economy.”

Post at 12:06 pm UTC by Jerry