eGambling Tips

Last December Las Vegas casino mogul Sheldon Adelson revealed he was opposed to internet gambling on ‘moral grounds. In a stunning act of hypocrisy Adelson said he was suddenly concerned about ‘underage gambling.’ In a statement dripping with hypocrisy Adelson told Senator Jon Kyl, one of the architects of the Unlawful Internet Gambling Enforcement Act, and the American Gaming Association “that he doesn’t believe technology can prevent underage gamblers from betting online, and that he is ‘morally opposed’ to internet gaming” according to a report by the Las Vegas Review Journal. Recently Adelson donated $10 million to Newt Gingrich’s campaign for president.

Adelson’s statements did not go over well with others in the gaming industry and poker players. Representatives of the Poker Players Alliance took issue with Adelson and struck back. Adelson’s comments also were the topic of conversation at many internet gambling and video poker blogs and forums. The Review Journal reported “Hours after news broke that Adelson opposes any Federal legislation allowing states to license and regulate online poker, players flooded social media with calls to boycott the Venetian’s 11,000-square-foot poker room.” QuadJacks host Marco Valerio told the Review Journal “The players know who is on their side and who isn’t. They’re very conscious of the influence they can exert when united. I think Mr. Adelson may have underestimated this.”

The Poker Player’s Alliance, which is the lobbying organization representing American poker players, is keeping a close eye on Adelson. Vice President of Player Relations for the PPA Rich Muny stated “I haven’t heard anything about an official boycott. What we want to do is communicate with the Palazzo and Venetian and make sure they understand where the poker community stands on this issue. We believe in liberty and we believe that age verification works in an online system.” Muny went on to say “While we expect many players will choose not to patronize businesses where their CEO actively opposes our right to play, and while we are actively informing the membership of Adelson’s position on this issue, we’re not calling for an official boycott at this time. For now, it’s important now to keep the lines of communication open.”

The American Gaming Association repeated its support for legal internet gambling and told reporters from the United Press “Sheldon has long had concerns about this issue, and it is perfectly within his right to make this decision. However, the AGA, at the direction of our Board of Directors, will continue to support Federal legislation to allow states to license and regulate online poker.” It would appear that Adelson is out of step with many in the gaming industry. Several major gaming companies are entering the internet gambling industry. Gaming giants MGM Resorts International, Boyd Gaming and Caesar’s Entertainment are all planning to offer internet gambling in the future. Although Adelson’s influence in Washington is not clear his opponents include some of the heaviest hitters in the gaming industry. Most in the industry think Adelson’s position is motivated solely be self interest.

Playtech, one of the largest software suppliers to the internet gambling industry, has revealed that the company is in talks with several potential partners in the United States. A recent interpretation of the 1961 wire act by the Justice Department has opened the door for states to provide residents with legal internet gambling. Playtech CEO Mor Weizer told reporters from Reuters “We have lots of potential customers that approached us or that we approached that would like to have us as their suppliers of online gaming products like online slots or bingo games when the market opens up. There is a lot of work being done behind the scenes in various states by various local authorities. We have people on the ground now in the U.S. working with us in order to monitor all these processes.”

Internet gambling has been illegal in the US since congress passed anti online gambling legislation in 2006. Weizer cautioned that it is too early to say if the current laws are overturned this year. The company said that liberalization of gambling laws in several countries have created new opportunities for the software giant. Playtech also announced joint ventures with Germany’s gaming machine business Merkur and South African gaming and resort business Peermont.  Playtech purchased a 49.99% stake in a new venture with Gauselmann, the parent company of Merkur. Playtech believes that new German regulations will allow online sports betting.  Playtech entered into a 50/50 partnership with Peermont a casino operator located in South Africa. The company plans to offer sports betting in South Africa and anticipates new regulations that will allow internet gambling in the country.

Earlier in the week Playtech revealed that the company would restructure its agreement with Scientific Games. Playtech had entered into a joint venture last summer to provide internet poker in California. Playtech purchased Geneity, a sportsbook developed in the United Kingdom. The purchase cost Playtech about £11 million ($17.2 million UDS) and will lead to a replacement of Playtech’s present sportsbook products. The new partnerships and acquisitions were announced on the same day that Playtech announced an astounding 89% increase in year on year revenues during the fourth quarter of 2011. Fourth quarter Playtech revenues were $90.8 million. Playtech is not the only gaming company interested in the lucrative American market. Currently legalization will take place on a state by state basis but most experts say that if enough states enter the internet gambling industry federal legalization is sure to follow.

Just about every poker player in the US remembers ‘black Friday.’ On Friday, April 15th 2011 the US department of justice sieves several internet gambling sites and their assets. Players logging on to their regular poker sites were greeted by a DOJ logo informing them that the site had been seized by the DOJ and the department of homeland security. Player’s accounts were frozen and at the time it was unclear whether they would be able to recover their money. Insiders say that the information leading to the seizures came from an Australian payment processor who was facing 75 years in prison.

Ira Rubin was one of 11 people indicted and was charged with nine counts of processing illegal payments for poker for poker sites. Last week Rubin pleaded guilty to three of the nine counts including “conspiracy to violate the Unlawful Internet Gambling Enforcement Act, one count of conspiracy to commit bank and wire fraud, and one count of money laundering conspiracy.” The maximum sentence Rubin is facing is 55 years but the Stipulated Guideline Range in the plea agreement is between 18 and 24 months.

According to the April 15th indictment Rubin “lied to banks about the nature of the financial transactions they were processing.” The indictment accused Rubin of setting up “phony corporations and websites to disguise payments to the Poker Companies.” Rubin is the latest person to plead guilty to charges stemming from the black Friday seizures and indictments. In December 2011 Brent Beckley pleaded guilty to conspiracy to violate the Unlawful Internet Gambling Enforcement Act (UIGEA) and conspiracy to commit wire and bank fraud. Beckley could face a sentence of 35 years but prosecutors are recommending a sentence of 12 to 18 months. Beckley will be sentenced on April 19, 2012. Beckley admitted to a federal judge that “it was illegal to accept credit cards so that customers could gamble on the internet” and that he was aware it was “it was illegal to deceive the banks.”

In May 2011 Bradley Franzen pleaded guilty to conspiracy to commit bank fraud, conspiracy to commit money laundering, and accepting funds in violation of the UIGEA. Franzen could serve 30 years but a sentence recommendation has been withheld and currently a sentencing hearing has not been scheduled. Not all of the black Friday defendants were willing to plead guilty. John Campos and Chad Elie are fighting the charges and are scheduled to go on trial March 12.

In Australia ‘pokies’ (video poker and slot machines) are a popular pastime in pubs and other venues. Australian pokies are just about the same as slots and video machines in casinos around the world. They are made by the same manufacturers that supple Las Vegas and European casinos. Australian pokies feature special games designed to appeal to the Australian gaming market. For non residents Australian pokies are available at several internet gambling sites. Currently Australia has 20% of the worlds gaming machines and there are about 200,000 machines throughout the country. The average payout percentage of pokies is about 90.89%. Recently pokies have created a heated political battle and may well affect the outcome of elections. Pokies account for 62% of the A$19 billion Australian gaming sector.

Now it appears that gamblers who are mostly working class are on a collision course with the Labor government. The government is trying to address problem gambling and the battle could easily impact Prime Minister Julia Gillard’s political future. Gillard supports a move that would require all slot players to register and set a loss limit before playing. The policy is meant to stop problem gamblers from going over a pre set limit. Pokie player say this would infringe on their rights. No other form of gambling in Australia requires players to register and gamblers say the policy could deter casual players. Pokie player Prime Minister Julia Gillard’s political future. is against the move and told reporters “I love the pokies. I hate what the government is trying to do. It’s my money I put in these machines and they have no right to dictate how I spend it.” In the United States online gamblers have used the same argument to assert their right to gamble on the internet.

The well financed and politically powerful club industry has launched a multi media blitz against the restrictions. The club industry has ten million members and 4,000 clubs have banded together and are targeting 33 seats in Parliament currently held by labor politicians. A majority of slot machines in Australia are located in areas represented by the Labor party which is behind the restrictions. Australia’s club industry  said the new restrictions would cost A$5 billion to implement and would reduce club revenues by 30% to 40%. They also say that small clubs could go out of business threatening businesses that supply them.

Former problem gamblers voiced their support for the new restrictions and said they favored a pre-commitment system along with a self-exclusion policy  which would allow problem gamblers to ban themselves from playing pokies in Australia. Perennial killjoy Nick Xenophon weighed in on the issue with his usual arguments. A trial of the new pre commitment policy will be carried out in Canberra. The government is giving clubs in the city $36 million to compensate club owners who must upgrade or replace older machines to accommodate the new requirements. The trial will be subject to two Parliamentary reviews to be conducted by an oversight committee. An independent auditor will asses whether the compensation structure should be revised. Clubs will be able to ask for ”extra assistance in exceptional circumstances due to the implementation of mandatory pre-commitment.” It remains to be seen whether the new requirements will actually work and the political fallout the new policies will generate.

Gaming industry experts are keeping a close eye on social media gaming giant Zynga. Recent reports indicate that Zynga is discussing the possibility of entering the lucrative internet gambling market. The maker of FarmVille and Zynga Poker created a stir in the internet gaming world when the San Francisco based company issued the following statement “We build games and experiences that our players want and love. Zynga Poker is the world’s largest online poker game with more than seven million people playing every day and over 30 million each month. We know from listening to our players that there’s an interest in the real money gambling market. We’re in active conversations with potential partners to better understand and explore this new opportunity.”

An unnamed Zynga spokesman would not elaborate further but company officials who refused to go on record said that the social gaming company is only exploring the internet gambling option and at present has no plans to enter the internet gaming business. Legal uncertainties have been cited as one factor holding Zynga back. Currently 39 states allow online gambling of some sort but internet gambling remains illegal in others. In December the DOJ issued a legal opinion that said states are free to sell lottery tickets online. Some gaming experts believe that the opinion paves the way for legal internet gambling but others are not so sure. The opinion is narrowly crafted and may not apply to internet gaming.  Until the gambling laws are clarified Zynga is unlikely to enter the internet gambling market.

For some there is a stigma associated with gambling and many game companies have gone to great lengths to distance themselves from online casinos and gambling in general. Many gaming companies prefer to market their brands a wholesome family oriented entertainment. Some internet gaming entrepreneurs are testing the boundaries. Richard Branson of Virgin fame has partnered with WorldGaming.com to launch Virgin Gaming which allows players to compete for cash prizes while playing video games. Branson operates Virgin Bingo in the UK and is no stranger to the internet gaming industry.

For Zynga internet real money gambling has great potential.  Their poker application has about 7 million daily users and the company has announced plans to launch a bingo application. Zynga is also closely tied to Facebook which has over 800 million users around the globe. Most industry experts believe that Zynga’s entry into the real money gaming world is inevitable.

Eight internet poker players say they are victims of a cheating scheme on the Ultimate Bet website. The players are suing a Canadian company and several unnamed individuals. The players say that the company violated US gambling laws designed to combat organized crime. They also accuse the popular internet gambling site of defrauding players and negligently allowed dishonest card games. The lawsuit was filed last week in U.S. District Court in California and accuses the defendants, 6356095 Canada Inc., which was formerly known as Excapsa Software Inc., and 10 unnamed defendants, of violating the federal Racketeer Influenced and Corrupt Organizations (RICO) Act. The suit also alleges that the defendants committed fraud and was negligent by enabling the theft of $20 million from high stakes poker players in the US who played on Ultimate Bet internet gambling sites.

The lawsuit seeks compensation of $173 million and more in punitive damages. The suit was filed on behalf of plaintiffs Daniel Ashman, Brad Booth, Thomas Koral, Greg Lavery, Dave Lizmi, Daniel Smith, Joseph Sanders and Dustin Woolf. The lawsuit could have important ramifications and could help solve the largest case of poker cheating known so far. The suit is asking for documentation that Ultimate Bet’s mysterious parent companies that regulators with the Kahnawake Gaming Commission did not reveal to the public. In September 2008 the Kahnawake Gaming Commission, ,the regulatory agency of the Mohawk Council of Kahnawake in southern Ontario, announced that their investigation revealed that one individual, former World Series of Poker champ Russ Hamilton, was responsible for the cheating. Many online video poker players feel that there was a larger cheating conspiracy.

Haley Hintze, a former writer for the PokerNews and a poker blogger, is working on a book about the cheating scandal. Hintze told MSNBC reporters that in her book she will identify three others who participated in the cheating and attempted to cover it up. So far representatives from Excapsa Software can not be reached for comments on the lawsuit. A spokesman for the gaming commission would not comment on the lawsuit and said he did not know whether the commission would respond to any subpoenas. Ultimate Bet has acknowledged that between 2008 and 2008 $20 million was stolen from internet poker players. Ultimate Bet said that they had returned the money. The suit says that Ultimate Bet “substantially underestimated” by not considering money that was not wagered by the cheaters once they realized that their opponents had them beat.

The suit details the methods used and states “The key to the massive success of the cheating players is not simply that they were able to profit by bluffing when their opponent was weak or betting when they had the best hand, but that they were able to fold and not play … whenever their hand was strong (but) not the best. Thus every time a player had a flush, the cheater would fold a lower flush or straight; every time a player had a full house, the cheaters would fold a flush.” Alan Engle, a partner in the Meador & Engle law firm in Anaheim Hills, California, who filed the suit, believes he can overcome jurisdictional issues and told reporters “Anyone victimized by someone in a foreign nation over the Internet is in no way required to bring a case in a foreign nation.” The players may have trouble collecting any winnings because Excapsa Software, now known as 6356095 Canada Inc., is currently in the midst of liquidation proceedings in Canada. To make things worse Ultimate bet is facing charges in the US of violating the Unlawful Internet Gambling Enforcement Act of 2006, and money laundering.

Placing a bet on one of the many Olympic events can be difficult. Even Las Vegas sportsbooks do not take bets on the Olympic Games. Sports betting is illegal in many countries and in other the laws are ill defined baking betting risky at best. Some experts say the ban on Olympic betting is to protect the integrity of the games.  Other experts point to recent scandals of athlete doping, judging scandals, and bribes making the games too distasteful and risky for many sportsbooks. While punters may have trouble finding a land based bookie taking Olympic bets some internet gambling sites are willing to take bets on Olympic events.

According to a recent Reuter’s news report the international police agency Interpol has warned that some of the Olympic Games are at risk from athlete cheating at the behest of betting syndicates trying to fix the results of some of the events. Ronald Noble, general secretary of the French-based international police agency, told reporters that the prevalence of athletic events being fixed suggests that the Olympic Games could be targeted by gambling syndicates. Noble stated “I’ve got to believe since it’s occurring so much in football and other sports we have reason to believe there is a risk of it occurring in the Olympics. The president of the International Olympic Committee (IOC) has said that he and the Olympics should be concerned about irregular or illegal betting occurring in the context of the Olympics.”

Earlier in the month British Olympics minister Hugh Robertson said that the integrity of the games could be compromised by the “enormous” threat from criminals trying to fix game results. One betting exchange, Betfair, has said they will share information with the IOC about suspect wagering. Nobile said the biggest threat is from competitors rigging some of the events. In 2010 cricket was a high profile example of ‘spot fixing’ in Britain. Three players from Pakistan were jailed by a British court in November for rigging parts of a 2010 match against Britain. In January a British cricketer pleaded guilty to taking bribes to bowl badly in a match. Noble told reporters “What we’re finding more and more is not just the outcome but betting on something unusual that will happen during the competition itself. That’s becoming the area where most of the betting is occurring rather than the outcome.”British sportsbooks have pledged to report any suspicious activity but it remains to be seen just how effective this will be.

Internet gambling experts have discussed the potential of new markets such as Asia, Latin America and South America but there is one potential gaming market that is rarely mentioned; India. India is the second most populous country in the world after China. India has about 1,200,000,000 people so the potential can easily be seen. In recent years India’s government has marketed the country as a tourist destination. In addition India has a well established medical tourist industry and people from around the globe come to India for affordable medical procedures at a fraction of the cost they would pay in western nations. The tourism industry in India is growing and the nation is an increasingly popular tourist destination.

Even better for internet gaming operators there has been an increase in the use of modern technology such as cell phones and increasing internet access. Lorien Pilling, director of research for Global Betting & Gaming Consultants, noted “There is a huge propensity to gamble amongst the Indian population.” The potential can easily be seen making it a mystery why the India is rarely mentioned by internet gaming operators and experts. The potential of mobile gaming in India is huge and about 800 million people in India are regular cell phone users. The nation has developed a sophisticated IT industry and many tech jobs are outsourced to Indian companies. The only country with more cell phone users is China which is also the world’s most populous nation with 5.6 billion cell phone users!

What is stopping India from becoming one of the world’s largest internet gaming markets? Unfortunately India’s gambling laws have not kept pace with modern technology. Indian gaming laws are confusing at best giving operators second thoughts about launching egaming operations in India. For example the Public Gambling Act has been in effect since 1887! Obviously the act is outdated and unsuited to a modern technologically driven world. Since the laws were passed so long ago internet gambling is not addressed and the laws have not been changed. Lorien Pilling of Global Betting and Gaming Consultants explained “As a result of no specific legislation gambling by remote means – internet, mobile – is deemed illegal by implication.” Pilling also said that “Internet gambling is not on the Federal Government’s agenda.”

Gambling in India is a legal grey area but some gaming operators like online bingo are interested in the Indian market. “Internet gambling is not on the Federal Government’s agenda.” Have expressed interest in what could be a $60 billion dollar gaming market. Ladbrokes and 888 have also expressed interest. Once the legal hurdles are cleared India could easily become one of the largest internet gaming markets in the world and for operators whose timing is right the rewards will be great.

Asian countries have a centuries old gambling culture. In most Asian countries gambling is socially acceptable pastime and the popularity of gambling in Asia includes most age groups. Recently poker mogul and gambling expert Calvin Ayre said that Asia is a young and upcoming market for internet gambling. He also said that the Asian gambling market is stronger than the rest of the world combined. Ayre told gaming operators “if you don’t yet have a toehold in Asia, you have no business calling yourself an industry player.”

The latest review of the Asian gambling market by the prestigious firm of PriceWaterhouseCooper seems to confirm Ayre’s viewpoint. The PriceWaterhouseCooper’s Global Gaming Outlook report says that the Asian gambling market is growing fast and shows no signs of slowing. The report says that the gaming industry in the region will expand on many levels. Revenues from gambling in Asia are currently about $34.4 billion annually and the report suggests that this figure will grow to $79.3 billion by 2015. The report has resulted in calls by Asian politicians for a review of current laws to accommodate the predicted industry growth.

Gaming analyst Jonathan Galaviz said changes are needed and stated “There is a strong argument that, since consumers will engage in illegal online gaming anyway, it is better to license and tax it than to allow the revenues to go to unlicensed operators. It’s probably an appropriate time for governments to, at the minimum, seriously research the issue and get up to speed on the topic for thoughtful policy discussions.”  Galaviz went on to discuss the futility of laws against internet gambling and said “tremendous growth in online gaming, especially in video poker. Singapore is an example of a country which is outlawed online gambling and has seen the popular past time surge by 49.7% in 2010. So it is suggested by detractors of the legalization of online gambling that “legalizing online gambling will likely cause a significant social impact. Mr. Felix Ling, who is a casino consultant and senior partner at Platform Asia Management Services, stated “Once you allow online gambling, you are indirectly encouraging more people to flock there.”

Many Asian economies, unlike stagnant western economies, are growing and putting more money into the hands of consumers and players. Most Asian countries already have the sophisticated infrastructure necessary to support internet gambling. Many gaming experts say that Asia offers the best opportunities for internet gambling operators.

For publicly traded gambling companies 2011 was not a good year. A majority of the gaming sector saw daily stock prices take a nosedive during 2011 despite signs of recovery in most gambling markets including Las Vegas. According to Las Vegas based financial consultant Applied Analysis seven out of ten casino operators and slot game manufacturers Finished in December with lower daily stock prices than at the same time in 2010. Five gaming companies had double digit stock declines. In a research report Applied Analysis Principal Brian Gordon told investors “While gaming companies’ stock and financial performances outpaced 2010 in aggregate, individual operators and manufacturers experienced varying degrees of success.”

Slot machine manufacturer WMS Industries finished 2011 with the largest decline in average daily price per share of any company and fell by an astounding 57%. Boyd Gaming Corporation had the second biggest drop in daily share prices and suffered a 33% year on year decline. Three gaming companies posted year on year gains in daily stock prices. Wynn Resorts Ltd. was one of the few winners and had the largest increase-7%. The casino operator finished posted positive gains despite a 10% daily decline in its stock prices in December 2011. Six of the companies charted by Applied Analysis experienced dips in daily prices in December.

Daily share priced for Vegas Sands Corporation fell 6.5% in 2011 and daily prices for MGM Resorts International fell 29%. Both companies along with Wynn Resorts are expansion opportunities in Asian and US markets including Florida and Massachusetts. The Applied Analysis report said “Speculation continues as the majority of operators seek to expand their footprint.”Gordon pointed out that some stock prices rose after the DOJ reversed its long standing position on the 1961 Wire Act opening the door for gaming companies to launch internet gaming operations. In addition Nevada gaming authorities approved regulations that could make the state the first to offer internet gambling. Gordon stated “The move positions Nevada to take advantage of any changes at the federal level, should they occur.”