Online Gambling Press

Former BetOnSports CEO pleads guilty

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Yesterday, in a court case in St. Louis, Missouri, the 51 year old former CEO of BetOnSports pleaded guilty to racketeering. He admitted that the internet company lied about online gambling being legal, which resulted in clients losing millions of dollars, without having to expect anything back.

The Former CEO David Carruthers from the UK was arrested in July 2006 in Texas, and been placed under house arrest ever since. He made an agreement with the prosecutors, in exchange for a guilty plea, and help in the case against BetOnSports founder Gary Kaplan and 6 others. In return for the guilty plea and cooperation, prosecutors will recommend no more than 33 months behind bars for Carruthers, even though federal legislation guidelines call for up to 20 years. Prosecutors also dropped seven other charges. Kaplan and 4 others will have to go to trial in September. Two others are still at large. Carruthers told in court, when he was hired by Kaplan in 2000, he was not aware that online gambling was illegal.

The Costa Rica based company pleaded guilty in May last year. According to prosecution lawyer Catherine Hannaway, Carruthers had run the company through  a series of illegal means involving racketeering, mail fraud, violations of the Wire Wager Act and money laundry. They also falsely advertised that its web- and phone-based gambling operations were legal. Also the company misled costumers into believing that money transferred to BetOnSports was safe and available to withdraw at any time. Actually it was used to buy rival Easybets. An estimated 16 million dollars over thousands of consumers are lost. Prosecutors state the case has had a bad effect on the online casino industry.

NCAA, NFL lobby against Delaware sports gambling legalisation

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Associated Press reports that Delaware legislators anxious to raise more cash for state coffers by legitimising sportsbetting now face opposition from the powerful National Football League and the National Collegiate Athletic Association.

A delegation visited Dover this week to lobby against Delaware Governor Jack Markell’s proposal to re-authorize sports gambling in the state.

The NCAA officials’ starting gambit was a threat to ban all playoff games in Delaware if the state legalises sports betting, and NFL representatives made their opposition known in a brief meeting with Markell on Thursday this week.

“I welcomed them to Delaware and they told me that they hoped I would reconsider my position,” Markell told an Associated Press reporter. “I told them I think we’re coming from different places.”

The proposed sports betting lottery driven by Markell is expected to generate about $55 million for the cash-strapped state in its first year if it clears the General Assembly.

By virtue of a brief and unsuccessful experiment with a sports lottery in the late 1970s, Delaware is one of only four states, along with Nevada, Montana and Oregon, grandfathered under a 1992 federal law that bans sports gambling.

Delaware’s status as the only state east of the Mississippi River that can offer sports betting could provide an economic buffer against slot machine competition in neighboring Pennsylvania and Maryland.

The NFL, which has several teams in neighboring states, has long opposed sports betting, saying it would tarnish the game’s image and could lure youngsters into gambling, though the lottery would be restricted to people 21 and over.

NCAA officials also threatened that a sports betting lottery would make Delaware off-limits for any post-season championship events. NCAA spokeswoman Stacey Osburn said NCAA policy prohibits the staging of any session of an NCAA championship in any metropolitan area where legal sports wagering is allowed.

State officials counter this by noting that the sports betting proposal would prohibit betting on Delaware teams. They argue that the NCAA’s position seems inconsistent and point to the annual Las Vegas Bowl football game, and skiing championship events that have been held in Nevada.

“I don’t know if it’s retaliatory or just a bluff, but it strikes me as a little overreaching on their part,” said Markell’s chief of staff, Tom McGonigle.

McGonigle said the state has not ruled out a challenge to the NCAA policy.

Osburn, the NCAA spokeswoman, said there has been no inconsistency. She said the Las Vegas Bowl is not an NCAA event, and a skiing event held in Nevada in 2004 took place before the anti-sports wagering policy had been extended from men’s basketball to all NCAA sports.

Osburn said the decision to use Reno, Nev., as a site for this year’s West Regional skiing championships was “an administrative oversight on our part.”

Business: Online gaming slashes 100 Gibraltar jobs

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Gibraltar Internet news source Panorama reported Monday that the British territory’s online-gaming sector has experienced a rash of layoffs in the past year. All told, Panorama said, the number of Gibraltarians employed by online casinos and poker rooms fell from 360 in October 2007 to 261 last month.

Panorama also listed several popular Gibraltar-based online-gaming companies that have shed jobs, as well as the number of positions they’ve cut: PartyGaming, recently in the news for U.S. legal action against co-founder Anurag Dikshit, trimmed its staff of 317 in August to 227 employees in February; Mansion made similar cuts, reducing its IT staff from 149 to 93 worldwide.

Other noteworthy reductions reported by Panorama include those made by Bwin and Victor Chandler, which slashed their workforces from 200 to 177 and from 307 to 262, respectively. Nor were smaller companies spared with startup Carmen Media registering a cutback from 25 employees last year to its current staff of 14.

Panorama did note, however, that many of these cuts were expected after several companies projected they would make them in the third and fourth quarters of 2008. PartyGaming, for instance, said in September that it planned to make 100 positions redundant by 2009.

The online news source also said some companies were still increasing their payrolls, with Stan James bringing on 59 new employees since October 2007 and Mansion saying it is currently recruiting for sales and marketing positions.

phill.provance@gamblingplanet.org

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The biggest online punters are in a land downunder

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Online punters Downunder wager more money online than gamblers elsewhere in the world, reports the Melbourne Sun Herald this weekend. The newspaper references a new Canadian study by University of Lethbridge professors Robert Wood and Robert Williams which used a research base of 20,000 adults in 105 countries to reach its conclusions.

The study claims that Australian and New Zealand gamblers spend an average of A$435 online every month – five times what punters put through land poker machines – and has prompted renewed calls for bans on online gambling in Australia, the newspaper reports.

The Uni Lethbridge study also found the prevalence of problem gambling was up to four times higher for Internet gamblers than those who used traditional means such as poker machines, an apparent conflict with previous studies including the regular gambling prevalence studies carried out in the UK by the Gambling Commission. Whether this is a conflict, or an indication that Aussie and Kiwi gamblers are more prone to addiction by higher usage, is unclear. The finding is also dependent on what the researchers define as “problem gambling.”

Professors Robert Wood and Robert Williams, who conducted the Lethbridge study, concluded: “Australian Internet gamblers do report higher average monthly gambling spending than the overall average we observed among our sample. This would suggest that Australian Internet gamblers do indeed spend more on gambling compared with Internet gamblers from most other countries.”

The Salvation Army’s problem-gambling service co-ordinator for Australia, Gerard Byrne, said he was not surprised by the figures and called on the Federal Government to ban credit-based betting.

“People are certainly reporting more and more usage of online gambling,” Byrne said. “I’m not surprised New South Wales is near the top in problem online gambling. We’ve got a culture where gambling is the state pastime.”

Clubs NSW chief executive David Costello said online gambling should be subject to the same restrictions as the heavily regulated land gambling industry.

“This is a very real issue,” Costello said. “It confirms what we’ve been saying for the past two years: the incidence of Internet gambling is infinitely increasing.”

He said there was a danger of young people using their parent’s credit cards, with not enough age checks completed.

The news comes after online gambling group Centrebet posted a 23% jump in Australian online revenue last month. The company is also expecting a 10% increase for the 12 months to June 2009.

International: iMEGA files sports betting lawsuit

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PokerNewsDaily.com reported Saturday that the Interactive Media Entertainment and Gaming Association plans to file a lawsuit aimed at toppling New Jersey’s anti-gambling laws. According to the online news source, the lawsuit will target the Professional and Amateur Sports Protection Act, which currently prohibits sports betting in the state.

The lawsuit is one of many iMEGA is pursuing as it attempts to undermine the Unlawful Internet Gambling Enforcement Act of 2006. This time, however, the organization has the backing of state lawmakers, who say they were not able to legalize sports betting before PASPA made it illegal.

PASPA, which President George H.W. Bush signed into law in 1992, gave state legislatures one year to legalize sports betting. Those that did not, according to the law, assented to illegalizing the practice.

iMEGA’s case centers around the 10th Amendment, which bars the federal government from imposing unwanted laws on states. PASPA, its brief contends, prevents New Jersey from generating revenue state lawmakers would like to access.

"The federal government passing a law that intruded on states’ rights to determine whether to engage in gambling, and what type of gambling, is a violation of federalism," iMega Chairman Joe Brennan told PokerNewsDaily.com. "PASPA, as it’s written, is a violation of federalism and infringes on a state’s rights to raise revenue. It created a special class for a small number of states and deprived other states from being able to be a part of it."

Brennan and and several other iMEGA representatives, as well as New Jersey state Sens. Jeff Van Drew and Raymond Lesniak, will officially announce the lawsuit at a press conference at the New Jersey Statehouse in Trenton on Monday, March 23 at 11 a.m.. The organization is also expect to file its suit with the U.S. District Court of New Jersey at that time.

phill.provance@gamblingplanet.org

TO AVOID LEGAL REDRESS UNDER INTERNATIONAL COPYRIGHT LAW, REPRINTERS MUST CITE THE NAME OF THE ABOVE ARTICLE’S AUTHOR, THAT AUTHOR’S E-MAIL ADDRESS AND ALL LINKS PERTAINING TO THE PUBLISHING SITES (www.gamblingplanet.org and poker.gamblingplanet.org).

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Cryptologic poker network merger with Boss Media is underway

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Cryptologic's decision to merge its online poker interests with those of Boss Media became practical reality Wednesday as the phased transfer of several online poker sites began.

The merge, announced late last year by Cryptologic, is motivated by a need to substantially reduce costs while improving liquidity for players. It will make Boss Media’s International Poker Network larger by the integration of six former Cryptologic network sites, with the timetable set as follows:

• 17 March – Extreme Poker
• 18 March – Classic Poker, Opoker, DTD Poker and BetJacks
• 19 March – InterPoker and ParBet

Boss Media, together with St Minver, will provide a fully-managed poker solution based on Boss Media’s poker software.

“With the addition of six new poker licensees including InterPoker and ParBet, we are significantly increasing the liquidity that can be offered to both the new licensees’ players, as well as our existing customers’ player base. We look forward to further developing our relationship with CryptoLogic and further increasing the size of the IPN over time,” said Atul Bali, President of GTECH’s New Media & Sports Betting Co, parent body for Boss Media.

Brian Hadfield, President & CEO of CryptoLogic, commented: “GTECH and Boss Media are the right partners for CryptoLogic, thanks to their independence and commitment to innovation and technology – and it is exciting to see this transition happen right on schedule.”

Keep losing at poker? Maybe you think you’re invincible

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Jacob Avery, a researcher in the University of Las Vegas’s fellowship program in gaming studies, delivered the latest lecture in the Gaming Studies Colloquium Series, titled “The Social Worlds of Everyday Poker Players” last week, taking a look at why poker players find it so hard to quit whilst winning.

Opining that past research focused on the biomedical reaction in gambling, Avery is trying a different approach in observing how poker players reacted to situations and interact with each other at the table. He set himself three basic questions to address:

• Why do people find it so hard to quit while winning?
• Why do people keep playing after they continually lose more than they win?
• Why do some people keep gambling to or past the point of losing everything?

His conclusions thus far suggest that once players win they are overpowered with a feeling of invincibility. “The feeling is that the momentum of the table has been shifted in favour of the victor,” he explained.

With a major win under his or her belt, a player enters into a self-negotiation phase to make the decision on what terms he or she will stop playing. This may be a decision to stop once they have doubled their money or when they break even. But typically, the player constantly renegotiates with him or herself and keeps on playing.

A losing player will more often than not continue to play, in many cases convincing him or herself that their own bad judgement or play is not to blame, but that the opponent has more luck.

Bizarre marketing idea #27598: Aerosmith themed lotteries

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GTECH Corporation, which owns online gambling software developer Boss Media and other Internet interests is getting into the lottery sector with a deal that literally rocks. The company announced this week that it has signed a multi-year licensing agreement with the rock band Aerosmith, giving GTECH the exclusive rights to use one of the most powerful brands in the music industry for a lottery business.

Top American rockers Aerosmith has massive international appeal with a fan base consistent with core lottery players – 60% male and 40% female, in the 25-54 age group.

GTECH plans to develop innovative lottery games across all channels that will include, in addition to cash prizes, exclusive Aerosmith merchandise, and once-in-a-lifetime experiences including VIP All Access passes to Aerosmith’s upcoming tour.

“Knowing that Aerosmith’s music has a huge multi-generational demographic fan base, we are confident that the brand, the music, and the value-added merchandise, and experiential prizes will provide our customers an opportunity to drive revenue with innovative and fun lottery games,” said Ross Dalton, GTECH’s Senior Vice President, Printed Products and Licensed Content. “With the band set to release a new album and go back on tour, this year represents a unique opportunity for our lottery customers worldwide to take advantage of this mega brand.”

Aerosmith has sold over 150 million albums and received numerous awards over the course of its 30-year career including: eight American Music Awards, four Grammy Awards, 12 MTV Music Awards, six Billboard Music Awards, among many others. The band was inducted into the Rock and Roll Hall of Fame in 2001, is a 2000 Hollywood Walk of Fame inductee, and has had 29 Billboard charting singles including 11 Top Ten hits. Their many smashes include such iconic rock songs as Dream On, Sweet Emotion, Walk This Way, and Love in an Elevator.

The group has sold out shows around the globe, boasts a diehard “Blue Army” fan-base numbering in the millions worldwide, and has set an all-time attendance record for the Tokyo Dome. It has an impressive list of successful tours to its credit, having performed in such locations as Europe, South America, Asia, Australia, and Canada. The most recent tour in 2007 included 35 dates in 20 countries around the world, from Boston to Dubai to Russia.

Aerosmith has performed the prestigious NFL Superbowl XXXV Halftime Show along with Britney Spears and ‘N Sync, in front of approximately 84.3 million viewers, and they were a headliner at Woodstock ’94. Most recently, the band’s music has found great success in the massively popular Guitar Hero: Aerosmith video game which is available on PLAYSTATION3, PlayStation2, Xbox 360, and Nintendo Wii gaming systems. The game was introduced in 2008 and sales continue to explode and break records. Aerosmith is scheduled to release a new album and tour in mid-2009.

Now – can we expect an Aerosmith branded online gambling slot from Boss Media?

Casino Gran Madrid signs licensing agreement with Playtech

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London-listed online gambling software developer Playtech plc has scored another important coup, signing up Casino Gran Madrid, one of the largest and most prestigious land based gaming operators in Europe, as a licensee for its online casino and poker products.

Under the terms of the license agreement, Playtech will provide CGM with its casino platform and poker product, through its iPoker network, as the operator launches its online operations.

Mor Weizer, Chief Executive Officer of Playtech, said: “We are delighted to have secured this agreement with one of Europe’s largest and most respected land based operators. We expect this to be a significantly value accretive relationship, exemplifying our strategy to increase the number of regulated markets in which we operate.”

Both parties are committed to meeting all the Spanish regulatory requirements, a Playtech spokesman stressed. CGM has already been working closely with Playtech’s development and customer support teams to devise a suite of products tailored to meet the unique demands of CGM’s players, offering a wide variety of games specifically designed to appeal to the gaming patterns of CGM’s customer base.

Weizer continued: “We are pleased to add further regulated markets to our sphere of operations. Playtech’s gaming platform is supported by a transparent and efficient management system which an increasing number of customers view as integral to their future business plans.”

Jorge Casanova, Director of Information Systems of Casino Gran Madrid commented: “Our agreement with Playtech strengthens CGM’s leading position in the Spanish casino market. With our casino brand and games available online we are delighted to be leading gaming development in Spain through Playtech’s innovative, secure and transparent system.”

Industry analyst Collins Stewart described the deal as strengthening Playtech’s credibility in a growing regional market. “The Madrid region is one of the leaders of Spain’s online gambling regulation drive, meaning the deal also reinforces Playtech’s strengthening regulated position,” the company said.

Playtech plc is due to release its full-year results on Thursday this week, in what is anticipated to be a positive annual report.

EU gambling liberalisation discussions continue at Fair play breakfast

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Prominent European politicians and gambling operators joined the debate on the liberalisation of EU gambling markets this week as the European Parliament prepared to vote on a largely negative own-initiative report on the ‘integrity’ of online gambling submitted last year by Danish MEP Christel Schaldemose. The report has been opposed by Britain and Malta.

Speaking at a “Fair Play for Gambling” breakfast discussion chaired by MEP Malcolm Harbour, a former top European judge opined that politicians “lacked courage” in efforts to clarify gambling’s legal status. He pointed out that traditionally gambling has been regulated at member state level, and that politicians had been remiss in not formally clarifiying the position of gambling, and in failing to introduce a common EU-wide code applicable to all member nations.

Speaking in the EU Parliament Thursday, Professor Siegbert Alber criticised the commission’s approach, saying, “It is a pity the commission does not have the courage to propose rules in this sector but would rather wait for court rulings.”

Alber, a former advocate-general at the European Court of Justice, told the discussion group that there was currently a backlog of ten such (free movement of goods and services) cases which are currently awaiting judgement, reports Parliament.com.

Alber was equally critical of member states, saying: “They currently have the discretion to regulate in this field but this represents a restriction on the freedom to provide services in the internal market and, to date, member states have failed to justify such a restriction.”

Chairing the discussion, MEP Malcolm Harbour said he supported the idea of an impact assessment exercise and further research being carried out on the possible consequences of liberalisation of the market.

“I would also urge the commission and member states to make some progress on this issue,” he added.

His party colleague, Emmanouil Angelakas, meanwhile, said he would press for the creation of a parliamentary intergroup to study “all aspects” of the issue after June’s European elections.

Konstantinos Maragkakis from Stanleybet International, emphasised the differences between the idea of a liberalised market as compared to a regulated market, denying that a more open arrangement would create a “free for all” or dry up streams of revenue for state lottery projects, and saying it is “an issue of policies not control.”

He made the point that attempts to characterise all private companies as bad are contradicted by the fact that such companies often showed great integrity. He also argued against the school of thought that current moves could lead to an increase in match fixing, citing the UK as an excellent example of a well regulated, open market.

Maragkakis was supported by Stanleybet’s deputy director-general Adrian Morris, who told Parliament.com that there was a clear need for “more data on the size and structure of the gambling market” across Europe. Morris said he doubted that an opening up of national gambling markets would see member state monopolies lose significant revenues.

“Lotteries and sports betting are different markets, I doubt there would be a lot of revenue lost,” he said.

Sigrid Ligne, the Secretary General of the European Gaming and Betting Association, which represents many large European betting groups, called for a European code of conduct to help regulate the industry.

“There should be some sort of regulation and I think the best option is to do it at EU level,” she said. “The problem is that there is no momentum and nor does there appear to be any consensus in the European parliament. We are fed up with court rulings but, if necessary, will continue to defend our position in the courts.”

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