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January 7, 2009

Sector Snap: Vegas Strip casinos face hard 2009

Casino operators are likely to continue to face difficult times on the Las Vegas Strip in 2009, but regional markets could offer a ray of hope, a JPMorgan analyst said Wednesday.

The gambling sector has struggled as consumers have curbed discretionary spending due to eroding credit, the ongoing housing downturn, escalating food costs and unemployment concerns.

Furthermore, airlines have made capacity cuts to cope with the worsening economy and higher fuel costs. If fewer flights are heading to Las Vegas, it is likely that the casinos and hotels are hosting fewer visitors there even as they have continued to expand, noted JPMorgan analyst Joseph Greff.

"The idea that gaming is a recession-resistant industry is not true...not anymore at least. This is likely due to the fact that gaming is a more mature and widespread form of entertainment than in prior U.S. downturns and, in the case of the Las Vegas Strip, a more expensive consumer discretionary good," Greff wrote in a note to clients.

January 6, 2009

Online Casino Operator PartyGaming Sues Empire Online

PartyGaming PLC, the company behind such Internet gambling sites as PartyPoker, has filed suit in London against Livermore Investments Groups, formerly known as Empire Online, according to an article in the Bloomberg News. In 2006, PartyGaming bought Empire Online's Internet gaming business for $38 million.

Empire then changed its name to Livermore, and began operating as strictly an investment firm. But PartyGaming spokesmen allege that Livermore did not deliver the full sum of income due in the deal, and the gambling operator wants to recover a six-figure amount it says is owed it.

PartyGaming has been in the news recently for the settlement paid by co-founder Anurag Dikshit to the US Department of Justice. Dikshit pled guilty to violating US laws against online gambling and paid a fine of $300 million, even though the validity of charges is highly dubious.

While the company is also in negotiations with the US government to square away any difficulties regarding retroactive prosecutions by US law enforcement, a spokesman for PartyGaming said any sum to be paid would be significantly less than Dikshit's payment.

PartyGaming is listed on the London Stock Exchange, and news of impending deals freeing the company from further US persecution have led to upswings in the stock's value. Many feel that settling US charges would allow the online casino operator to re-enter the US market if US laws were to change, a distinct possibility with a new Congress and President.

January 5, 2009

American Bankers' Association Critiques Online Casino Ban Rules

The website for the American Bankers' Association detailed the group's problems with the UIGEA, and the corrections or lack thereof the Bush administration made when implementing the midnight rule. Most telling is that, despite pleas from Congressmen as well as Internet gambling sites and the financial industry, no definition was ever determined for "unlawful Internet gambling."

Banks had asked for this clarification, plus a blacklist of online gambling sites that were to be forbidden the use of payment transaction services. But the government did not comply, leaving banks in the precarious position of determining legality and exclusion.

The good news came in several forms. Banks will not be required to meet the new requirements until December 1st, 2009, by which time many expect the law to have changed drastically. Secondly, the brunt of responsibility for banks falls at the opening of accounts.

New commercial accounts are to be investigated to ascertain that they do not represent illegal online gambling. Legal Internet gambling sites will have to prove to banks they are within the law, something that may be impossible to do, given the rat's nest of conflicting state and federal law.

For instance, horse racing, which is specifically exempted in the UIGEA, still is considered illegal by the Department of Justice when bets are taken on the Internet, under its misreading of the Wire Act.

Banks are not held accountable by payments made by gamblers; these transactions must be monitored by card and credit companies. Banks are only responsible for existing accounts when they receive "actual knowledge" of the account's use in Internet gambling. Actual knowledge is defined as when a bank is alerted by a compliance officer.

While the procedures do not seem to tighten the noose around the necks of online casinos more than it already is, the repeal of this expensive, messy, and ill-conceived legislation will be a day to rejoice.

January 4, 2009

American Psychiatric Association: Online Casino Regulation Needed

Problem gambling occurring at online casinos demands that regulation be instituted to protect consumers, according to figures released by the American Psychiatric Association and the US National Gambling Impact Study Commission. An article by LittleAbout.com reveals that both groups consider the current unregulated state of US online gambling to be dangerous for problem gamblers and teens.

Even though the UIGEA ban is still in place, the gambling commission estimates that more than 1300 casinos take in more than $650 million and perhaps as much as $2 billion annually from the US market. Lack of regulation has left those citizens playing at risk for fraud, dishonest games, and identity theft.

Further, by refusing to regulate the industry and applying safeguards, Congress has left US children vulnerable. The APA said teens are least likely to be able to resist temptation to gamble at Internet casinos.

The study found that as many as fifteen percent of youth surveyed admitted to having had a significant problem related to gambling. Those among this group in danger of suffering from addictive gambling remain untreated, as unregulated play allows the disorder to bloom undisclosed through hours of uninterrupted Internet gambling.

Yet again, it can be seen that whatever good intentions that may have been behind the passing of the UIGEA have led to unforeseen and disastrous consequences. Online casino gambling can only be made safe for US citizens through legalization, licensing, and regulation.

January 3, 2009

With US Regulation Online Casinos Can Help Catch Terrorists

Recent reports have suggested that terrorists have used Internet gambling sites to launder money for their operations. While the US government has been trying to catch these terrorists, they, according to reports, have used the US laws on Internet gambling to their favor.

E*Trade has been fined on two separate occasions for failing to properly implement money laundering screening. The fines may lead the company to tighten their ability to detect money laundering.

Currently, the Internet gambling sites that the terrorists may be using to launder money have no regulations within the US. If legalization with regulation were to occur, it would become more difficult for the terrorists to launder money through these sites.

Not only would regulation lead to a safer environment online, but it could lead to the capture of terrorists around the world. If these same terrorists that are laundering their money were to do so under a regulated system, the government would be privileged to information of their whereabouts.

In response to their fines, E*Trade believes they already have a safeguard in place to deal with money laundering. "E*Trade upgraded its system to provide an automated method to monitor for this particular activity (money laundering), and those systems have been in place for over a year," said Company spokeswoman Pamela Erickson, in a statement.

Similar regulations that apply to E*Trade would be put in place for online casinos. Under those strict regulations the online casinos would then serve as a valuable tool for the government against anyone, or any terrorist organization, that is trying to launder money.

January 2, 2009

New York Amazon Case Could Set Affiliates as Online Casinos

Joe Brennan, Jr., chairman of the Interactive Media Entertainment and Gaming Association, gave an interview recently in which he discussed ongoing legal battles concerning the Internet. Among issues reviewed with Poker News Daily was the New York dispute with Amazon, which Brennan sees as having potentially dramatic effects on the online casino industry.

Brennan says that the state of New York, in order to tax Amazon, is trying to establish the precedent that affiliates of the online retailer would be treated as extensions of the company itself. For tax purposes, this would help New York's case, as some affiliates of Amazon are based in New York, even though Amazon is based in Seattle.

But the possibility of creating a precedent of treating affiliates as a branch of the companies they market could have far-reaching effects for Internet gambling. At present, online casino affiliates avoid the glare of US prosecution by not hosting any gambling themselves. While the sites may advertise online gambling sites, they are not directly related, nor are affiliates responsible for the actions of the casinos.

But a victory for New York against Amazon may change that. If affiliates are viewed as extensions of the sites they advertise, then affiliates based in the US may be viewed by law enforcement the same as Internet gambling sites, risking prosecution.

The New York case, Brennan says, is interwoven with the Kentucky domain name case. In both instances, states are seeking either to create new revenue streams or else block those businesses not under their taxing thumb. At stake is the principal of who governs the Internet, and who profits from online sales, a battle raging to other areas such as the disputes raging between the actors' and screenwriters' guilds and the production companies.

While federal legalization and regulation may come soon enough to render much of the debate moot, the war over the masses of money exchanging hands on the Internet is sure to continue, as legislators grapple to deal with the new realities presented by online technologies.

January 1, 2009

Online Casinos to Begin Operating From Within Czech Republic

Sources from inside the Czech Republic are reporting that the government has agreed to allow several domestic gambling operators to begin hosting Internet gambling. After fierce lobbying from the companies, which feature such wagering as land sportsbooking and lotteries, the country will start licensing almost immediately after the New Year.

Czech lawmakers had voiced concerns that children would be able to gamble and consumers would be unprotected, but the bookmakers established in the country asserted that those possibilities were already occurring presently, with unregulated foreign operators dominating the business. Allowing resident gaming operators to expand to online sites will be the first step in presenting citizens with regulated and licensed alternatives to the uncontrolled situation found today.

The Czech similarity to the US situation seems obvious, although US legislators have been more reluctant to accept the need for legalization and regulation. There are many casino industry experts who think the US will move toward regulation once the new President and Congress take office.

Radio Praha carried an interview with Tomas Bahnik of Fortuna Group, one of the operators likely to be licensed. Bahnik said of the proposed regulation, "This is very strict and well monitored, in contrast with foreign Internet companies. Every person, including teenagers, can use Internet betting without control. Our main goal is to control this situation."

December 31, 2008

Antigua And Barbuda Give US A Lesson In Online Casino Regulations

The United States prides itself on the ability to lead the world in most fields. One field that this is not true in is online casino gambling. While the US has turned a cold shoulder to the industry, other countries have successfully allowed the industry to thrive.

Antigua and Barbuda is one of those nations that has developed their online casino industry into a major money maker. They have done this by imposing strict regulations on the industry, while allowing people the freedom to make up their own minds.

The US is negotiating with Antigua and Barbuda over a WTO breach that has cost the island nation millions of dollars. The US stopped companies who are licensed in Antigua from operating in the US, hurting profits for these companies and also for the nation itself.

The UK has fueled the expansion of regulated online casinos in Antigua and Barbuda. They "white listed" the nation, opening the door for many more companies to set up shop in the nation.

Now, the Regulatory Commission in Antigua and Barbuda is estimating that budget increases could happen to the tune of 100 % for the next fiscal year. With the UK's blessing, companies are now advertising in the UK and seeing major profit increases because of the advertising.

The economy is getting better in Antigua thanks to the addition of jobs and revenue. While the US continues to deny the need for regulations of Internet gambling sites, Antigua and Barbuda is showing the US the benefits of enforcing such regulations.

December 30, 2008

Atlantic City Bleeds as Would-Be Gamblers Pay Bills

It’s 3:45 a.m. in Atlantic City, New Jersey, and Jimmy Panagiotou just walked away from the poker table after 5 1/2 hours, about $200 lighter.

The 43-year-old professional gambler, wearing a World Series of Poker baseball cap and leather jacket, is on a cigarette-and- coffee break outside Caesar’s casino, pondering his next move. Looking around, he takes his loss in stride as he notes the eerie quiet of the largest gambling district in the U.S. after Las Vegas. Only diehards remain.

“It’s not like it used to be,” Panagiotou said. “All of the casinos are struggling. People are not going to find money to gamble when they need to find it just to live.”

After 28 years of growth, Atlantic City’s gambling proceeds are down for the second time in a row. In the first 11 months of 2008, revenue from casino games fell 6.7 percent to $4.2 billion, regulators reported Dec. 10. Last year’s 5.7 percent decline was the first ever, as the number of visitors slipped to 33.3 million from 34.5 million.

The slowdown comes as Governor Jon Corzine has warned that the state faces a revenue shortfall of $1.2 billion for the year ending June 30 and $5 billion in fiscal 2010. Through November, the state collected $338 million in Atlantic City tax revenue, down from $364 million and $384 million, respectively, in the first 11 months of 2007 and 2006. Casino employment fell to 39,137 in November from more than 42,000 as recently as August and a peak of 51,560 in July 1997.

December 29, 2008

Online Casinos No Problem For Well-Run Horse Track Racinos

An issue commonly raised by some states in the US is the need to shelter the revered tradition of horse racing from the gravitational, irresistible pull of online casinos. This idea, that horse track patrons are somehow hypnotized into deserting their true love of track pari-mutuel wagering for wicked Internet gambling, lies at the heart of Kentucky Governor Steve Beshear's court case against online gambling sites.

But empirical evidence exists that a properly managed track industry can hold its own, and even prosper, without resorting to protectionist and unconstitutional bans against Internet casinos. The truth of the matter may be that states with faltering racing industries may have just not been good businessmen regarding keeping their tracks modern and satisfying to evolving public tastes.

Louisiana is one state where horsemen are not crying the blues. Purses are enjoying an influx of revenue from slots that have pushed them to record levels. The state breeding industry is also supported by the racinos.

Ten years ago, Louisiana was looking at losing as many as two of its four tracks. Legalizing slots gave the industry a chance, and fairly negotiated splits with horsemen and casino management working together turned the state around. Now the four tracks are all doing solid revenues, and 8900 jobs are secure in a time of turmoil.

While public tastes have not changed, leaving track handles at stagnant levels, the support slot machines have given in cash to purses and breeding keep the racing industry vibrant in Louisiana.

Considering Churchill Downs owns the Louisiana Fairgrounds, the state's premiere track and also the longest continually operating track in the US, one might think the company might advise Beshear that there are better ways to salvage racing than hopeless court ventures against online casinos.

December 28, 2008

Gambling tycoon Anurag Dikshit deals losing hand

THE first time Anurag Dikshit moved to Gibraltar, where Party Gaming, the online gambling company he co-founded is based, he found his ideal home.

But there was a snag — someone was already living in it. That did not deter Dikshit. According to industry legend, he simply offered the owner much more than the property was worth to get him to sell.

This month the Indian-born tycoon has again been drawing on his considerable fortune to buy himself peace of mind. Dikshit pleaded guilty in a New York court to a charge under the Wire Act, which, in effect, makes it illegal to offer online betting in the US, and agreed to pay a $300m (£204m) fine.

Dikshit’s decision has created a rift with his former Party Gaming colleagues, in particular the three other entrepreneurs who helped launch what was once the world’s biggest internet poker service — Ruth Parasol, her husband, Russell De Leon, and their marketing guru, Vikrant Bhargava. It will also have troubled executives at other big online gaming companies, such as 888 Holdings. And it could have grave implications for the entire online gambling industry, estimated to be worth more than $12 billion a year.

Dikshit will be formally sentenced in two years’ time. He could get two years in prison, although many observers think it is unlikely he will have to spend time behind bars. Between now and his sentencing date, he is expected to help the American authorities with their inquiries into the world of online gaming.

The software engineer’s guilty plea is a significant coup for the US Department of Justice, which has been pursuing overseas companies that allowed American citizens to play on their websites. David Carruthers, a Scot who ran online sporting bookmaker BetonSports, was detained in America while changing planes to fly to Costa Rica in July 2006 and awaits trial. Executives of online gambling firms all face the risk of arrest if they travel to America.

The determination of the American authorities to pursue those involved in online gaming persuaded Dikshit to plead guilty. According to those close to him, it was simply a means of bringing the affair to an end, even if it cost $300m. It is money he can afford to lose, argue his friends. He has already made more than £500m from the sale of Party Gaming shares, and retains a 27.7% stake in the business, worth £213m.

Executives at other online gaming companies and his former Party Gaming colleagues do not take such a sanguine view. “It’s a dangerous precedent,” said one executive. “If he’s admitting wrong, I don’t like it.”

Dikshit’s decision to break ranks has provoked anger among former colleagues. According to one person who knows them well, the other three founders of Party Gaming are upset because it leaves them feeling “guilty by association”. They believe they have done nothing wrong, maintaining that until the US explicitly banned online gaming in October 2006, offering poker online to American citizens was not illegal.

Dikshit had been negotiating for a resolution since summer 2006, and in that time has travelled to America only once — for this month’s court appearance. An American law firm led the negotiations with the US authorities on his behalf.

Dikshit has barely spoken to the other three founders in almost a year. Some say this is on legal advice, but Dikshit’s friends insist that the two factions have simply drifted apart.

His former colleagues think that Dikshit has, in poker parlance, folded. They believe that with the change in administration in America next month, pursuing those involved in online gambling will fall off the agenda. Why, they argue, pay huge sums to settle these disputes if the authorities will be looking elsewhere in just a few weeks?

According to executives close to them, the Party Gaming entrepreneurs are convinced that the US will regulate the entire industry within the next two years, not least for the valuable revenue it will generate in taxes.

Meanwhile, the online gaming companies are pursuing their own negotiations. The vast majority pulled out of the American market after the 2006 ban but want to ensure they will not be prosecuted for business carried out in the US before the prohibition.

In a statement released on the day of Dikshit’s court appearance, Party Gaming revealed its own negotiations with the Department of Justice were making “good progress” and said that it expected any financial settlement to be “significantly lower” than the $300m Dikshit has agreed to pay. City analysts think the sum is likely to be between $50m and $100m, and that an agreement could come in the new year.

Once settlements are agreed, the sector is likely to undergo a rapid round of consolidation. In the recent past, deals, such as a mooted tie-up between Ladbrokes, the bookmaker, and 888 have come to nothing because of the risk of American litigation. That could all change with a settlement.

In a research note, Ivor Jones, leisure analyst at Evolution Securities, said: “Party Gaming and 888, as two of the largest companies, look likely to start the process. We believe combining the two would release at least $70m of synergies.”

It looks odds-on that 2009 will be quite a ride

December 27, 2008

Utahn on gambling: deal us out

Worried that national and international deals could force Utah's hand to accept online gambling, state lawmakers are pushing a resolution that urges Congress to ensure all bets are off in the Beehive State.

"Talks for the next round are in limbo," Rep Sheryl Allen, R-Bountiful, said of World Trade Organization negotiations in 2009. "It's very important that states give input and get involved before agreements get signed by 153 countries."

So Allen is pitching House Joint Resolution 1, which calls for gambling to remain within the realm of states' rights -- and, as a result, would keep it illegal in all its forms in Utah.

The lucrative pastime -- barred by the Utah Constitution -- forces folks to head to Idaho for lottery tickets or nearby Nevada for casino games. But the advent of online gambling in the mid-1990s changed all that, at least for a time.

"Computers made it much easier to gamble" -- even from the comfort of one's Utah home, said Allen, who heads the Utah International Trade Commission, created in 2006 by HB39.

This November, commission members drafted HJR1 in hopes of persuading federal officials to favor domestic interests over international priorities and allow states to decide about gambling.

"Many see gambling as a moral issue," Allen said. "But I'm looking at it as a states' rights issue."

Utah and Hawaii are the only U.S. states with zero tolerance for gambling. Most states allow it
with certain restrictions.

According to the American Gaming Association, the first online-gambling site was launched in August 1995. Now more than 2,000 offshore sites operate in what has become a flourishing industry.

In 1994, the United States inadvertently approved internet gambling by signing on to the General Agreement on Trade in Services (GATS). The pastime falls under "other recreational services."

Then, in 2003, the small Caribbean islands of Antigua and Barbuda, which are well funded through scores of online-gaming sites, filed a trade complaint with the WTO to challenge a disputed 1961 law that some states had used to ban online gambling.

In 2004, the WTO ruled against the United States, a decision appealed twice and upheld in 2007.

In mid-2005, Utah Attorney General Mark Shurtleff teamed with 28 other state A.G.s to urge the U.S. trade representative to stand up for states' rights.

"Antigua has no business trying to write Utah's gambling laws," Shurtleff wrote in a 2005 release.

A year later, Congress passed the Unlawful Internet Gambling Enforcement Act, a provision hastily tacked on to the unrelated SAFE Port Act. Rather than penalizing individual gamblers, the 2006 law cracks down on fund transfers from financial institutions to online-gambling sites. Fantasy sports, online lotteries and horse/harness racing are exempt from this law.

In 2007, Antigua and Barbuda sought the ability to violate U.S. intellectual-property law in exchange for these restrictions.

Instead, the U.S. trade representative negotiated a different agreement, with concessions that have not been released due to "national security" concerns.

"States on all sides of this issue were correct to see it as a states' rights issue," said Peter Riggs, director of the Forum on Democracy and Trade. "Some had public-morals concerns, others revenue concerns."

However, many are disturbed that the terms of the agreement have been kept secret.

Riggs suspects that research and development services -- and associated tax credits -- might have been part of the bargain. Those concessions would also impact how states do business.

"This is potentially a very big deal," Riggs said. "We were stunned that they classified it as national security and got away with it."

December 26, 2008

Taxing Online Casinos Better Plan for Kentucky Than Ban

Even as the state fights to eliminate gambling by seizing the domain names of 141 online casinos, Kentucky track officials are saying increased gambling is probably the only way to save the state's thoroughbred industry. Governor Steve Beshear has sought to use the courts to rid the horse racing tracks of competition, but even an unlikely victory in the case leaves horsemen and patrons fleeing the state for greener pastures.

Tracks in nearby states such as Indiana have used slots and other gambling to prop up their racing industries, and increased purses funded by income from racinos has led to top horse owners choosing to leave Kentucky's famed tracks for bigger prizes elsewhere.

A report by Beshear's task force on the future of Kentucky horse racing said, "Kentucky must identify a new source of revenue that is competitive with other states, or the Kentucky Thoroughbred industry will soon be in crisis."

State Representative Greg Stumbo has called for video lottery terminals at state tracks. Other horsemen suggest casino gambling is the best answer, but this would require a state constitutional amendment, and Beshear's last attempt at that never made it to a legislative vote.

Perhaps the best solution involves online casinos. The state is having great difficulty proving that online gambling violates any state laws. If state lawmakers accepted this and took the approach that if it is not illegal, it must be legal, an obvious answer arises. Tax and regulate Internet gambling.

The UIGEA would not prevent the state from receiving its tax share, as it would not be making a gambling transaction but merely collecting taxes from business conducted with Kentucky residents. The Department of Justice under the Bush administration might try all kinds of arm-twisting to get Kentucky to reject online casinos, but the Obama administration is less than a month away, and looks to be much friendlier to Internet gambling.

Could Kentucky citizens have a better Christmas present than the simultaneous acknowledgement of their rights to personal liberty while also creating a strong new state revenue source?

December 25, 2008

US Snowstorms to Benefit Online Casinos

The strong wintry weather across the US has gambling industry experts predicting a boost in play at online casinos to close the year. The past eleven months had already been a boom time for the Internet gambling operators, as surveys showed that unique US visitors to online gambling sites was increasing by double digits on a percentage basis.

Now the winter storms blasting much of the country has made holiday travel problematic. The closings of runways in New York and Chicago and the freezing rain and gusting winds found from San Fransisco to Massachusetts had casino management in Las Vegas figuring many cancellations from would-be patrons, many of whom will be turning to the Internet for their December entertainment.

Online Casino Advisory associate gambling analyst Cliff O'Donnell said, "The online casinos were already happy with numbers that showed they had as nearly many players in November in the US as retail sites had shoppers. Now the numbers will get a late strong close, pushed by people whose travelling has been cancelled. If you're snowed in, the Internet is a good way to avoid cabin fever."

Railroads and Interstates were as strongly affected by weather as airports. An Amtrak spokesman even told of trains covered in ice in the Chicago area. A number of highway deaths have been attributed to the weather.

Online casino operators have felt the coming year may be a breakout year for the industry. Changes are expected to be made in US law, legalizing and regulating Internet gambling. Considering the volume and rate of growth in the business currently, while under a supposed ban, 2009 could be the best year so far for online gambling.

December 24, 2008

Chinese Gambling Incident May Give Beshear New Online Casino Plan

A Chinese man cut off his finger to break his ex-wife from her mahjong wagering habit. The extreme measure caused the woman to promise never to play again, even as the finger was being reattached at a nearby hospital. Governor Steve Beshear of Kentucky may take note, as his troubles worsen and his plans to shut down online casinos seem headed for derailment by the courts.

Beshear ran for office on a platform that promised no new taxes, reductions in government spending, and the legalization of casinos. But the state budget is massively in the red, and Beshear has reversed all his campaign promises.

He has recently proposed a seventy-cent raise in taxes on a pack of cigarettes. The legislature did not allow a vote on a potential referendum to establish casinos. And he famously has wasted state resources and valuable court time trying to craft a viable argument to seize the domain names of 141 online casinos, only to see legal scholars poke holes in his case, currently before the state Court of Appeals.

Beshear's thinking seems to be that if he can't use gambling to increase state revenues, he'll try to prevent his prisoners... oops, constituents from playing at legal casinos based elsewhere, whether it be in neighboring states or on the Internet. His representatives in court have called domain names "gambling devices", which allow Kentuckians to gamble outside the state's tax net.

When asked by a judge during the appeal hearing if buses carrying residents over state boundaries to Indiana casinos were also gambling devices, and could thus be forfeited, attorneys for the state replied in the affirmative. It appears any method necessary to force patrons to only gamble inside state boundaries at venues feeding state revenues is acceptable.

Greg Stumbo, a state Representative, has proposed installing video lottery terminals, which are essentially slot machines, at Kentucky race tracks to draw gamblers leaving the state and fund purses to keep the quality of racing up. Hopefully, Kentucky will adopt this plan and others like it before Beshear threatens to cut off the fingers of loved ones to punish out-of-state gambling.

December 23, 2008

Last Holiday Bonus Attempt for Online Casinos

With the economy at the worst stage that we have seen it in, in a long time Online Casinos are turning almost any excuse that they know into a reason to create a new sign up or deposit bonus for their online casino.

The competition is also becoming larger and larger as time goes by. It seems as though online casinos are popping up left, right and center. And along with the launch of any new online casino comes the launch of a new sign up bonus that keeps getting bigger and bigger.

Amounts of sign up bonuses are now as large as 400% the amount that the player initially deposits into their account and many online gambling sites are very generous as long as you ask. Some blogging sites that we had looked into had players saying that as long as they emailed the accounts department saying that they were offered a bigger bonus somewhere else the online casino would have no problem matching that as long as it was legit.

So what is the latest trend in bonus offers? The holidays of course! With this being the season of giving, online gamblers have learned and definitely have been taught to expect more and more this time of year and this year there is so much out there to choose from.

The holidays bring great opportunity to those that have yet to play in an online casino as well as a great opportunity to strengthen their relationship with current members. Online casinos have been adding varied bonuses for the holidays that will be especially effective in the week to come!

December 22, 2008

Horse Race Betting on Phones OK With Wire Act, Online Casinos No?

The big news in the online casino industry this week was the plea of Partygaming co-founder Anurag Dikshit to violations of the US Wire Act. Dikshit agreed to pay a massive $300 million penalty, and has to wait as long as two years to find out if he will be sentenced to prison time.

Meanwhile, the New Jersey Sports and Exposition Authority, which supervises state horse racing tracks, is moving to allow mobile phone betting on horses. The authority said wagers will be accepted through Internet-enabled phones as early as next year.

The irony in this is that the Wire Act was passed in 1961 specifically to prevent bookies from taking bets over phones. At that time, bookmakers generally took plays in two major areas: sports and racing.

The Department of Justice is on record as saying horse race betting is illegal on the Internet, but it continues to turn a blind eye to blatant violations by such institutions as Churchill Downs, which runs the TwinSpires site taking online bets.

Such selective enforcement has caused consternation and complaints from foreign countries that host online gambling operations. The Remote Gaming Association is pursuing charges against the US before the European Union, and Antigua has already been awarded damages due to US protectionism from the World Trade Organization.

Meanwhile, even as law enforcement takes the most convoluted reading of the Wire Act possible to use the law as a tool against Internet casinos, New Jersey will allow tracks to commit exactly the act the law was intended to prevent. This policy of the executive branch of the federal government to enforce the law, not as it was written by legislators, but as it wishes it to be, will only cause mounting difficulties for US trade interests, and lead to courtroom defeats.

December 21, 2008

Online Casinos More Popular Than Hookers

The current economic recession is so overwhelming, businesses that previously felt little or no effect during tough times are suffering. Much has been made of the debate regarding gambling's recession-proof status. But it seems more and more that the declines in Las Vegas and Atlantic City casino revenues are as much due to the diversification of income sources away from gaming than any change in gambling spending patterns.

Even the world's oldest profession is feeling the downturn, while online casinos report growing customer bases. While a recent Internet marketing survey found that the number of US visitors to online gambling sites has increased dramatically over the last few weeks, hookers are saying they have to cut rates just to compete.

Both supply and demand are creating a buyers' market in prostitution. As spending money has dropped, demand fueled by men with extra dollars in their pockets has also declined. Meanwhile, women struggling to replace income lost in such fields as real estate and finance have flooded the industry, causing a supply glut.

This has resulted in the middle-class call girl being squeezed out. While hookers charging $1000 or more an hour still have the elite rich to employ them as always, the girls earning more than $300 but less than $1000 are finding the demand for their services disappearing. According to Susan Lopez of the Sin City Alternative Professionals' Association, the prostitutes earning less than $300 are getting all the business they always did, plus that that used to go to mid-range priced girls.

While girls are forced to lower rates to keep income coming in, Amanda Brooks, author of the Internet Escorts Handbook, thinks that they will also adopt better marketing methods, including following Internet casinos and going online.

While the ease and comfort of arranging business online has certainly helped online gambling operators and should do the same for escorts, there is a problem. The Department of Justice may decide that hiring a hooker online is the equivalent of booking sports bets via telephone, and thus is a violation of the Wire Act. As we have seen this week, that could be a $300 million error.

December 20, 2008

Trump sues to get 2nd shot at Pa. casino license

Donald Trump's casino company on Thursday filed suit in federal court to get another shot at a potentially lucrative slot-machine license in Philadelphia.

The lawsuit filed in Harrisburg by Trump Entertainment Resorts Inc. (nasdaq: TRMP - news - people ) names members of the Pennsylvania Gaming Control Board and says their rationale for rejecting Trump's application violated the company's constitutional rights to equal protection and to conduct interstate commerce.

The suit is the first in federal court over the slots-only casino licenses the gaming board awarded to 11 applicants in 2006.

Trump's company was rejected in its bid for one of two licenses earmarked for Philadelphia. Political opposition to the location of the winning casino projects has stalled construction and kept Philadelphia from becoming the nation's largest city with casinos.

In the lawsuit, Trump asks the court to stop the gaming board from allowing the two Philadelphia projects that won casino licenses from being built and opening. It also says it plans to file paperwork with the gaming board asking it to rescind the Philadelphia licenses, and allow a new round of applications to compete for them.

The long delays that have stymied the current casino projects in Philadelphia will be an issue in the litigation.

"Our argument is going to be that the public interest in Pennsylvania, which is jobs and taxes, is sitting there unfulfilled and the board should take action to make those things go forward sooner," said Trump lawyer Bob Pickus.

December 19, 2008

Despite UIGEA, US Visitors to Online Casinos Grow Rapidly

Despite a two-year-old ban against online casinos in the US, unique visitors to online gambling sites by US residents climbed eleven percent last month. Even as the Bush administration underhandedly imposed midnight regulations implementing the UIGEA, over sixteen million Americans used the Internet to call up online casinos, according to a market research company.

Using a scale called the Media Metrix measurement service, comScore found that one and a half million more US residents went to Internet gambling sites in November than October. To put the sixteen million in perspective, all retail sites in the November start to holiday shopping season totalled just over nineteen million US visitors.

Advocates of the ban against online gambling have insisted the UIGEA is necessary to prevent underage gambling and to protect consumers. But the ban has apparently blocked almost no one, as the numbers of US online casino patrons are huge and growing.

All the prohibition has achieved are negative results. A black market has been created, with no regulation to guard consumers against fraud or identity theft. Children are not blocked by regulating software. Legitimate businesses leave the US market, while shady outfits harboring criminal activity, including money laundering, operate unchecked.

While the stated goals of the anti-online gambling faction may be noble, simple numbers indicate the ban is a dysfunctional method to reach those goals. Legalization and regulation of the Internet gaming industry would be a simpler program to achieve more notable results, including less burden on the US financial system. Not even Spencer Bachus could claim sixteen million online gambling patrons to an unregulated environment in a month to be a satisfactory consequence of the prohibition of online casinos

December 18, 2008

Online gambling tycoon pleads guilty to wire fraud

Co-founder of PartyGaming, Dikshit is worth $1.6 billion, according to Forbes. One of the richest Indians, he is based in Gibraltar, Britain.

Dikshit, 37, travelled to New York this week to appear in a court here related to the allegations of wire fraud.

"I came to believe it was in fact illegal under the US law," said Dikshit in his appearance before the US court. "I have taken full responsibility for my actions."

The Department of Justice said Dikshit pleaded guilty before the New York court to charges that he used the wires to transmit interstate and foreign commerce bets and wagering information.

Dikshit now faces a maximum sentence of two years in prison and a fine of $250,000 or twice the gross gain or loss from the offence.

He also admitted to allegations requiring him to forfeit $300 million, and agreed with the government to pay it in three installments.

From 1997 to 2006, PartyGaming, a Gibraltar corporation, operated an Internet gambling business which offered casino and poker games, among other games of chance, to customers who wished to gamble online.

During that time a substantial majority of PartyGaming's online gambling customers - who accounted for approximately 85 percent of PartyGaming's revenue in 2005 - were located in the US.

The Department of Justice said Dikshit developed a proprietary software platform for PartyGaming and directed PartyGaming's computer operations from 1998 to 2006. From 1999 to October 2006, Dikshit was a principal shareholder of PartyGaming and, at various times, served as a PartyGaming corporate officer and director.

December 17, 2008

US Enforcement of Retroactive Online Casino Laws Causing Outrage

The plea of a major stockholder in Partygaming to unfiled US charges has resulted in recriminations and anger from European trade partners, international legal authorities, and members of the online gambling industry. Pressure applied over the last six years by the US Department of Justice, along with endless legal persecution, caused Partygaming co-founder Anurag Dikshit to pay a penalty of $300 million, only to wait and see if his cooperation will keep him out of jail.

The fact that the US continues to ignore questions regarding jurisdiction as well as the written laws of its own country has led Europeans to question the wisdom of doing business with the US. By all accounts, Partygaming and its subsidiaries are legitimate, responsible businesses that have bent over backward to avoid breaking US law.

The plea was to violations of the Wire Act, a 1961 law designed to prevent bookies from conducting business via telephone. The law has only been used in court regarding online casinos in cases that involved sports betting, which was made illegal on a federal basis in 1992. But Partygaming scrupulously avoided any sports wagering until after it left the US market, specifically to stay on the right side of the law.

When the UIGEA was passed in 2006, Partygaming was among the first Internet gambling operators to pull out of the US market. The company is sold publicly on the London stock exchange, is considered a model good citizen among corporations, and has been named responsible operator of the year by independent industry watchdogs.

Yet, despite protests in general and a direct request from the Commissioner of the European Union to freeze prosecutions until international trade laws can be applied, the US persists in dogged pursuit of those who have offended prosecutors. These officials seem to feel they are not bound by written laws and trade treaties; if, in their minds, criminal behavior occurred, then they will bring all the weight of the US to blackmail and bully toward what they cannot achieve legally, and within the restraints of their authority.

Joseph Weiler, an expert on international trade and economics who teaches at the New York University School of Law, says, "...the US has lost all its cases and appeals before the WTO's highest judicial authorities. And yet in what can only be described as puzzling and haughty contempt for the rule of law, it is acting as if it won those cases. The US is pursuing European nationals and corporations and threatening them with lengthy jail time and punitive fines based on US laws which have already been unequivocally held to be in violation of American WTO obligations."

Europeans in other fields are making judgements about doing business in the US based on the handling of the online casinos cases. Many worry that the threat of criminal prosecution may be used for political goals, a very similar problem to doing business in China. At best, the whole affair makes the US look haughty and disrespectful toward its fellow nations. Weiler concludes, "It (prosecution of online gaming operators) serves no discernable American national interest and this is a bad day for the reputation of the US in the area of international law."

December 16, 2008

Online Casino Owner Dikshit Finds Bad Luck Only Starts With Name

When Anurag Dikshit was born, he might have thought his naming would be his worst piece of luck. After all, he then went from a technical education in India, to working as a consultant for AT and T in the US, to becoming a billionaire, recognized as Gibraltar's richest man, and number 207 on Forbes' list of the world's wealthy.

But that wealth came from Partygaming, the online casino operator he founded and ran with Ruth Parasol and Russ DeLeon. Parasol had started the company, and gave Dikshit considerable ownership in exchange for his supervision of code writing and technical expertise.

Now the bad luck that inevitably follows a name like Dikshit has caught up to Anurag. After years of hounding by US legal authorities over his Partygaming involvement in online gambling, Dikshit has decided to pay the US government more than $300 million, and hope that his voluntary cooperation can keep him out of jail.

Dikshit's bad luck is spectacular, in many ways. While Partygaming's chief rivals at online poker, Poker Stars and Full Tilt Poker, still accept US customers, Dikshit and Partygaming have forsaken the US market for years. Yet, he is the one pressed by a contorted application of the Wire Act into admitting under duress that he is guilty of federal crimes.

Dikshit's partners in Partygaming, Parasol and DeLeon, seem content to wait out the US aggressiveness, hoping for a milder climate under the incoming Obama administration. Perhaps Dikshit could have learned a lesson from his former patrons and called the US bluff. After all, now seems a peculiar time to fold.

December 15, 2008

Attorneys Slam Beshear's Attempted Online Casino Grab

The Kentucky Court of Appeals heard oral arguments yesterday from a range of lawyers petitioning the court to vacate the decision by Judge Thomas Wingate to move forward to a forfeiture hearing against 141 online casinos.

The attorneys presented a multitude of reasons the lower court's ruling to put the domain names of the Internet gambling sites up for seizure by the state. Leading the process was Jon Fleischaker, representing the Interactive Media Entertainment and Gaming Association.

Fleischaker pointed out a new contention among the arguments against Governor Steve Beshear's case, saying that the state had used a mish-mash of civil and criminal law to arrive at the conclusion they desired. Fleischaker told the appellate judges, "It is not sufficient for the state or a lower court judge to decide on their own that there is a criminal violation."

The attorney also discussed established legal precedents, such as the US Sixth Circuit Court case that ruled domain names were the equivalent of billboards, hardly the "gambling devices" Kentucky viewed them as. He said the First Amendment allowed out-of-state casinos to advertise on billboards, even though gambling may be illegal.

Erik Lycan, attorney for Kentucky, was asked by the judge if the state had a right to seize a bus that was taking customers to Indiana's legal casinos as a "gambling device.' This is similar to the question posed previously here at Online Casino Advisory, in which it was asked if Kentucky would shut roads as gambling devices leading horse players to more attractive racinos. Shockingly, Lycan anwered yes, that the state had such a right.

Arguments were also presented offering the viewpoints that have been expressed since Wingate's original decision, that the state has no jurisdiction in the case, and that the move violates several clauses of the Constitution, including the Commerce Clause and the First Amendment.

William Johnson, a revered Kentucky lawyer known as the "dean of Kentucky attorneys", said the law been applied, written in 1974, had no concept of domain names, and that the legislature could have corrected this at any time, but have chosen not to, and the judicial and executive branches do not have authority to expand the law.

A decision on the appeal may come as soon as next week, although both sides said they would appeal if they lost. By the time the case works its way through the legal system, Congress may have made the issue moot by legalizing and regulating Internet gambling.

December 14, 2008

Online Casino Crime Down, Says Official Report

LONDON -- According to a new report, online casino crime decreased dramatically in 2008. The investigation into offshore gaming proves online casinos are safer and more secure than ever.

In the report, investigators studied network traffic at 5 of the largest online gambling venues in the world. The casinos who took part in the study were all UK-based, publicly-traded companies.

In the past, online casinos were constant targets for computer hackers across the globe. In one instance, a large sports gambling operation was overtaken by hackers the week before the Superbowl. Hackers insisted they be paid millions in ransom before they would turn over control.

Cyber-Investigators say a heightened awareness of computer security and increased spending on security infrastructure are the reasons for an overall improvement. Specific reasons include, limiting physical access to computer servers to only a few individuals; money spent on hardware mechanisms that impose security rules on computer programs; new operating system mechanisms that impose strict security layers; programming strategies that make online casino games more dependable.

With the recent growth in internet gambling, much of the investment capital has been spent trying to make the best casino games available. The trend now is to build safe, secure, and dependable online casino games without sacrificing player enjoyment.

December 13, 2008

Online Casino Ban Leaves Girl, 14, Vulnerable to Sexual Predator

Opponents of legalized and regulated online gambling say underage gambling is among the top reasons they want to continue to ban Internet casinos. But evidence mounts that suggests the ban is not effective.

In September, a fourteen-year-old New York girl accessed an unspecified online gambling site. While at the site, she began chatting with Andrew Pettitt, a twenty-eight-year-old man from Pennsylvania.

The girl left her home to be with Pettitt, who took her to the mountains in western Maryland. After five days, the pair was apprehended. Pettitt was arrested and charged with statutory rape, while the girl was returned to her parents.

Pettitt pled guilty on Tuesday to one count of third-degree sexual assault, and prosecutors dropped seven other charges, including second-degree sexual assault.

If family groups are really interested in protecting children from the dangers of online casinos, regulation cannot possibly be less effective than banning Internet gambling. The ban has been in place for years, and yet obviously, children are not deterred by it.

Regulation would require secure and vigilant programs designed to prevent underage access. That would do far more to shelter children than leaving them unshielded in a Wild West atmosphere, which is what the UIGEA has created.

December 12, 2008

Online Casinos Seen as Major Threat to Chinese Internet

Chinese officials are considering the spread of information about and leading to online casinos as one of the most pressing problems regarding the Internet. Wang Chen, who happens to be the Minister of the State Council Information Office and not an Eighties rock band, spoke on the topic to the Forum on Internet Media of China.

Chen asked the assembled group to foster a society of honesty and integrity, which he thinks is best served by censorship and the repression of free thought. The only threats Chen identified as greater than online gambling were the spreading of "rumors" and the "exaggeration" of news on the Internet, both of which are referred to in the Western world as uncensored news coverage.

State-supervised Chinese newspapers quoted a local law professor as saying the Internet is troublesome because of its anonymous nature, which makes it hard to trace behavior to a specific individual.

Chen asserted that online casinos and "unhealthy online games" made increased supervision of the Internet vitally important. He said that "monitoring', or spying as it is called in most countries is necessary to serve society, apparently in its adjustment to honesty and integrity.

Only the US government has more convoluted ways to say they are banning online gambling because government should make decisions for its citizens. Of course, the US has to engage in such doubletalk because it supposedly reveres the rights of individuals, when in reality it mirrors China in its Internet policies.

December 11, 2008

Kentucky Internet Gambling Case Resumes Tomorrow

It’s been nearly two months since Judge Thomas Wingate issued an order upholding the seizure and possible forfeiture of 141 internet gambling domain names in the Commonwealth of Kentucky. The URLs in jeopardy include those belonging to the major online poker sites that still service U.S. customers, including FullTiltPoker.com and PokerStars.com. The Court of Appeals in Louisville, Kentucky will take center stage on Friday, when the parties involved argue in front of a three judge panel.

One of the organizations defending the 141 domains is the Interactive Media Entertainment and Gaming Association (iMEGA). The industry trade group is led by Joe Brennan, its Chairman, who told Poker News Daily, “Everybody is going to be bringing their ‘A’ game. Everyone is going to be led by their local counsel from Kentucky.” Proceedings are scheduled to last for 50 minutes according to the Court of Appeals’ schedule and will begin promptly at 10:00am local time on Friday.

Both sides have submitted briefs in advance of the hearing. The three judge panel, which includes Michael Caperton, Michelle Keller, and Jeff Taylor, will review the information prior to tomorrow’s hearing. The panel will also examine the October 16th judgment by Wingate, which was passed down in a Circuit Court in Frankfort, Kentucky. Brennan explained, “The appeals process is very tight at the State and Federal levels. There are very strict time limits in terms of how long counsel can address the court.”

Once the Court of Appeals has heard arguments on Friday, it will deliberate and revisit the briefs filed by both sides as well as review oral arguments. Brennan expects a decision to be passed down within a few weeks, although with the holiday season rapidly approaching, the timeline is generally unknown. In the event that the Court of Appeals passes down a judgment in favor of the State, Brennan told Poker News Daily that iMEGA will seek another route: “If we don’t receive satisfaction from Court of Appeals, we will appeal to the State Supreme Court.”

There were several petitions filed to the Court of Appeals. In each, the lack of jurisdiction by the Commonwealth to seize domain names located in cyberspace was addressed. However, Brennan noted that iMEGA’s arguments also focus on the broader issues in play: “We also addressed the gambling devices law to say that the Judge and Commonwealth had misapplied it. There was no due process in this and the Commonwealth is also violating the Commerce Clause of the Constitution.” The latter states that the Federal Government has the authority to regulate commerce with other countries or between states. In this case, Kentucky may be taking on that role.

Following the October 16th ruling, Kentucky Governor Steve Beshear stated, “The court validated our concern that there is illegal and unregulated Internet gambling in Kentucky.” On the actual legality of internet gambling in the Commonwealth, Brennan argued, “There is no Federal law that makes it explicitly illegal for someone to gamble on the internet. There are six states that have laws on the books against internet gambling, but Kentucky is not one of them.”

Wingate gave domain name owners 30 days to block customers from Kentucky, else risk forfeiting their URLs. In response, sites on the Merge Gaming Network as well as Cake Poker, Ultimate Bet, and Absolute Poker did just that. The Microgaming Network initially pulled out of Kentucky, but later elected to opt out of the U.S. market entirely. A forfeiture hearing was scheduled for December 2nd, but has since been postponed indefinitely pending the appeals.

The Court of Appeals case will take place at the Jefferson County Judicial Center located at 700 West Jefferson Street in Louisville. The court room is located on the 10th floor.

December 10, 2008

Australian Sceme to Censor Online Casinos Falters

With global and local criticism rising against governments' moves to censor the Internet, Australia is facing refusal by service providers to participate in tests of filtering that may be used against online casinos.

The ruling Labor Party in Australia has proposed installing a two-tiered Internet filtering system. One tier would be mandatory for the entire country, and block online gambling and child pornography. The second level would be optional, for online customers wishing to block additional "unwanted material."

But testing by the Australian Communications and Media Authority found that the filters blocked legitimate sites while allowing the passage of sites that fit the blocked patterns, and slowed Internet speeds by almost ninety percent.

In response, Telstra, the country's largest Internet provider, said it would not participate in the trial of the system, while smaller companies agreed only to a scaled-down testing.

Further debate has raged over what is "inappropriate' and what is "unwanted." Clearly, if a site is unwanted by everyone, then there is no need to block the site. Critics fear that the sites found inappropriate by the government will become an ever-expanding list; already, the number of sites on Labor's list has grown from 1300 suggested by the ACMA to over 10,000.

Disastrous results in the United Kingdom regarding the attempted censorship over a Wikipedia page have fueled opposition to the Australian plan, with the Greens, Opposition, the Internet industry, some child welfare advocates, consumers and online rights groups all aligning themselves against the censorship. The Green Party called for the abandonment of the filtering plan, saying it was hopelessly flawed and a certain failure.

Colin Jacobs, vice-chairman of Electronic Frontiers Australia, said that the unintended results would be the same as the failed UIGEA ban in the US. "Given that the traffickers of genuine abuse material will not let themselves be slowed down by a filter and are already covering their tracks, the net result that will be achieved here is exactly this: inconvenience, chaos and expense with absolutely no dividend for the children."

December 9, 2008

Internet Filters Proposed for Online Casinos Block Wikipedia

Politicians desperate for ways to control and censor the free flow of information on the Internet are disappointed with the results found through blacklisting and filtering in Great Britain. Proponents of the systems want to use the technology to block what they consider "inappropriate conduct", as Australian lawmakers refer to pornography and online gambling sites. Of course, inappropriate is in the eye of the beholder; China classifies political thought and expression in the blacklisted category.

The Internet Watch Foundation is a British regulatory agency that decides what Internet sites the rest of the public should be allowed to view. The foundation reported that they were alerted to a page on Wikipedia about the rock band the Scorpions, and their album "Virgin Killer."

The Wikipedia article featured a photo of the album cover, which features a nude young girl, possibly underage. The IWF blacklisted the page, even though the album with original cover is sold without restriction throughout the Western world.

The blacklisting led to the reporting of the page to British Internet service providers, 95% of whom use the IWF guidelines. The page was blocked from view by most UK citizens. But the result is that many residents now cannot access Wikipedia at all.

Further, for those who sometimes can view Wikipedia, the editorial functions which allow the site to accept contributions of knowledge and editing from viewers do not work. Meanwhile, Wikipedia attorney Mike Godwin says the image has never been declared illegal in any jurisdiction. In fact, the same picture is available at the album's site on Amazon.com, without discussion of blacklisting Amazon.

Supporters of using Internet blacklists, blocks, and filters have to see that unintentional harm results from trying to prevent communication of knowledge. In Australia, the estimate is that as much as 10% of legitimate content may be blocked by filtering errors.

Also, the idea of what should be blocked varies with each individual, let alone from country to country. Such heavy-handed techniques may be suitable for repressed China, where Wikipedia is intentionally blocked. They are certainly not suited for governments supposedly cherishing free speech and individual freedom.

December 8, 2008

After Online Casinos, Kentucky to Block Interstate Roads Next?

Kentucky's Governor, Steve Beshear, is in the process of pursuing legal action against 141 Internet gambling sites. Beshear has hired private lawyers to file for forfeiture of the sites' domain names. The governor's complaint alleges the online casinos are involved in gambling which is drawing money from the Bluegrass State, and that the domain names are "gambling devices" which allow Kentucky citizens to participate in this illegal activity.

The case was shockingly upheld by Judge Thomas Wingate. The many appeals are due to be heard before the Kentucky Court of Appeals this Friday, December 12th. Among the grounds on which attorneys for the casinos, as well as advocates for free speech and an uncensored Internet, dispute the case are a lack of either jurisdiction or constitutionality.

Still, the case may be upheld by the appellate court, which may embolden Beshear to expand his new tactics. As Kentucky horsemen are saying new racinos in Indiana and Pennsylvania are drawing patrons from Kentucky, Beshear is certain to devise a plan to stop this undesirable desertion by his own residents.

Considering the reason gamblers are going to the out-of-state tracks is the attraction of slots and video games at the tracks in neighboring states, Beshear must be appalled at this illegal gambling which is injuring "Kentucky's signature industry", horse racing. Never mind that slots are legal in those states; they are not in Kentucky.

Furthermore, using roads to get to those tracks means those roads are now "gambling devices." As such, Beshear must consider closing the roads and blocking traffic leaving the state.

After all, neither jurisdiction nor the intended meaning of gambling devices will stop Steve Beshear. Roads, like domain names, are a necessary tool to access the gambling hurting Kentucky. Just wait until Beshear finds out about the coming cell phone boom in mobile gaming!

December 7, 2008

UK FIRMS FEELING THE PINCH

Gala Coral and Genting Stanley have closed some land casinos

The decline of the economy in Britain has generated more sad reports of gambling businesses shrinking this week, with The Observer newspaper revealing that over the last 12 months, nine land gambling establishments have closed their doors, axing hundreds of employees.

The Observer cites Gala Coral, owned by private equity firms Permira, Candover and Cinven, and Genting Stanley as the big losers. The former has shut four casinos, including an upmarket operation in London's Picadilly Circus, whilst Genting has closed operations in Liverpool and Manchester and is currently in a pay dispute with the GMB union.

Genting Stanley executive deputy chairman Peter Brooks told The Observer: "These closures, and I fear there will be more to follow, are stark evidence of the pressures faced by the industry in the UK to which the government has made a significant contribution, not least with last year's large tax hike."

But while UK casinos and bingo halls are struggling, there is evidence that bookmakers are increasing their revenue, the newspaper reports, pointing to William Hill's recent Q3 surge of 9 percent.

December 6, 2008

Mobile Gambling Issues

The very first example of a mobile gambling event took place in Japan in the form of a new year's lottery. With the success of the Japanese sweepstake, it didn't take long for entrepreneurs to jump on the bandwagon to test out the new technology. Before long, sports betting, including gambling on horse racing and football games became available by mobile phone.

In spite of the success and projected growth of this market, a number of issues exist. As ever with online gambling there is the issue of monitoring and regulation. Other issues include the control and potential manipulation of betting odds. It took a number of years before these elements were managed in the Internet gambling arena, and a similar process will need to be established in the new mobile phone market. Further issues of personal and company confidentiality as well as payment systems and system validity and reliability will have to be addressed.

Difficulties aside, there are a number of top European online gambling operators who are willing to put up the cash to bet on the new technology. These include market names such as Ladbrokes and Blue Square. Technology companies are also lining up to create the software required to power this new sector, with European gaming software companies eager to be first in line for this new business. The ruckus has also attracted the large cellular phone giants such as Nokia and Ericsson into the market. However, many mobile phones are simply not designed to work as gambling devices. Spurred on by the interest in this market, the larger cellular phone providers are currently developing handsets that will enhance the mobile gambling experience.

While issues undoubtedly remain, the projected size of this new market is certain to produce the kind of innovation and investment required to make the mobile gambling sector the potentially largest online gambling sector to date.

December 5, 2008

Limone ran gambling ring, police charge

Peter J. Limone, one of four men awarded $101.7 million last year by a federal judge who said the FBI framed them for a notorious 1965 gangland murder, was arrested yesterday on charges that he ran a tightly controlled illegal gambling operation that brought in hundreds of thousands of dollars.

Limone, 74, who spent 33 years in prison before his murder conviction was thrown out in 2001, allegedly engaged in loan sharking and extortion and made four illegal gambling parlors in Middlesex County pay him tens of thousands of dollars in rent or face the threat of violence, according to Middlesex District Attorney Gerard T. Leone Jr.

The Medford man was among 20 people indicted by a Middlesex County grand jury investigating illegal gambling and organized crime. Underlings referred to him as "Chief Crazy Horse" and "The Camera Guy" in conversations secretly recorded by the State Police, Leone said. He gave no nickname explanations.

"We are alleging Peter Limone led an extensive and organized crime ring," the prosecutor said in a news conference at his office in Woburn yesterday evening. "We are alleging he was the COO," or chief operating officer.

At the State Police barracks in Danvers yesterday afternoon, Limone could be seen from the foyer seated in the booking room, wearing a jacket and an open-collared shirt, his arms folded across his chest. He appeared to be saying little to officers.

December 4, 2008

Illinois' gambling problem

The struggling economy has dealt a bad hand to the nation's usually robust gambling business, a downturn made even worse in Illinois, where the state's nearly year-old smoking ban has proved unhealthy to casinos.

Among those paying the steepest prices are local governments, charities and their clients, who have come to rely on gambling tax receipts.

The big gambling states— Nevada, New Jersey and Mississippi—are off 5 percent to 7 percent in casino revenue. But the picture is worst in Illinois, where casino revenue is down 20.3 percent this year.

Gambling officials estimate that the state will get between $150 million and $160 million less in taxes, most of it earmarked for education. Statewide, the eight communities with casinos will see $20 million to $25 million less than they took in last year, officials estimate.

December 3, 2008

Online gambling a sure bet for Ottawa's coffers

There was a terrific piece on 60 Minutes Sunday, in conjunction with an investigation by the Washington Post, examining cheating in the world of online poker.

Not everyone will be shocked to learn of cheating – call it fraud – in activities that fly under the legal radar.

Telling, at least here, was that the trail leads right to the Kahnawake Mohawk reserve, just south of Montreal.

Internet gambling operations handling more than $18 billion a year – and growing every month – operate out of the reserve while our government stands by, terrified to intervene and enforce the law. Everyone remembers nearby Oka in 1990. An on-camera interview with a spokesperson was blunt. He said the Kahnawake are "not Canadians'' but independent people and not subject to Canadian law.

Fine, fine. So the time will never be better than right now to change the law and make Internet gambling – and sports betting, while we're at it – fully legal across the country. We could legalize it, regulate and tax it, the way Britain did in 2004; first year's revenue in the U.K. was more than £1.5 billion.

With governments scrambling for tax revenues, this would be a relatively painless windfall. Companies operating on the shady side of the law could operate out in the open, pay taxes and sponsor events. That's what happens in Britain now.

Gamblers will gamble, whether it's legal or not, but they would prefer to bet with legal, regulated companies. For one thing, this kind of online poker fraud could be addressed and punished openly, instead of handled secretly, as is happening in the cases at the centre of the WashPost/60 Minutes story.

Since Ottawa is scared to beat the Kahnawake betting operations, it should join them instead – and beat them to the billions of dollars available. Make it legal, set up the regulating framework and watch the money pour in.

In these economically turbulent times, it makes nothing but sense to profit legally from an activity that is both here to stay and is growing every year.

We already allow most forms of gambling and people can't be stopped from doing it on the Internet now. So step up and do it right. Rake a square game of online poker, if that's what people want to play. Allowing single-game sports betting also would provide revenues that could go to everyone from amateur sports to the pro events on which a majority of betting will take place.

This decision is both so obvious and so far overdue that it should be a no-brainer. Even for Ottawa.

December 2, 2008

Kentucky and the Gambling Domains

A recent law suit in Kentucky has attracted world-wide attention because it could create a very dangerous precedent—the application of local law to the domain name system and Internet web sites that are available globally.

On October 16, 2008, a Kentucky trial court entered an order purporting to seize 141 domain names allegedly involved in gambling. The basis of the order was the allegation by the state of Kentucky that gambling on the Internet violates Kentucky's state laws regulating gambling. A subsequent amendment to the order would exempt web sites that installed a "geographic filter" preventing access by Kentucky residents.

Even though the Kentucky case only involves Kentucky gambling laws, the dangerous precedent is that regimes around the world with oppressive local laws restricting speech or religion might attempt similar litigation.

On November 17, the Kentucky Court of Appeals granted a stay of the order of the trial court. This will allow the appeal to proceed before the names can be transferred. A number of organizations have joined in supporting the appeal.

At this time, it is not clear when the appeal will be decided. It is very likely that any decision by the Kentucky Court of Appeals will be further appealed by the losing party to the Supreme Court of Kentucky. It is also very likely that there will be a further appeal to the Supreme Court of the United States, or there may be some other legal maneuver intended to get the case before the federal court system of the United States. The only certainty is that there will be no final decision until several years have passed.

The primary basis of the appeal is that the attempted seizure violates provisions of the Constitution of the United States, including protection of freedom of speech and the principle that states cannot interfere with commerce that is national or global.

In addition, there are at least two other legal issues involved, either of which may have a bearing on the outcome of the case. These include the question of jurisdiction of state courts over domain registrants, registrars and registries outside the state (and some outside the USA), and the question whether domain names are property capable of being seized by a court.

December 1, 2008

Harrah's Casinos to Provide TOTAL REWARDS(R) Players with New, Innovative STAR TREK(TM) Gaming Machine Experience from WMS

WAUKEGAN, Ill. & LAS VEGAS, Dec 01, 2008 (BUSINESS WIRE) -- WMS Gaming Inc., a subsidiary of WMS Industries Inc., and Harrah's Entertainment, Inc. today announced that they have entered into an agreement to deploy a Harrah's TOTAL REWARDS version of WMS' STAR TREK series of gaming machines. Harrah's will introduce these customized games across its enterprise - beginning in Las Vegas in December 2008. Players who are members of the Harrah's TOTAL REWARDS program will be able to use their cards to create a personalized and differentiated gaming experience on the STAR TREK themed gaming machines at most of the company's casinos in North America, as Harrah's moves forward with a market-by-market implementation plan, subject to additional jurisdictional regulatory approvals.

The popular STAR TREK video gaming machines are the first games deployed on WMS' fourth foundational networked gaming technology: the category-creating Adaptive Gaming(R) technology platform. This server-enabled, networked gaming platform provides players with the unique ability to personalize their game play, allowing them to save their play status and unlock additional bonus rounds and game episodes over time.

"As we introduce our latest innovation at Harrah's, in collaboration with the creative WMS team, the unique Adaptive Gaming platform has enabled us to provide an enhanced level of personalization and a more differentiated entertainment experience each time a player logs onto the game with their TOTAL REWARDS card," said Tim Stanley, chief information officer and senior vice president, innovation, gaming and technology of Harrah's Entertainment, Inc. "With both companies' customer-focused approach to bringing players a total entertainment experience, WMS' STAR TREK games align perfectly with our TOTAL REWARDS program."

Tim Stanley added, "As players advance through the dynamic Star Trek storyline, they can save their progress through the game and pick up where they left off during their next visit, regardless of which STAR TREK gaming machine in a TOTAL REWARDS enabled casino they visit. Additionally, by using TOTAL REWARDS to enable their personalized STAR TREK account and 'avatar,' they can transport their previous play status from non-Harrah's based Star Trek games, earn 'Bonus' achievement medals for their Harrah's play, and get access to new games, unique communications and special promotions and offers as part of our innovative introduction of this new capability."

"With Harrah's broad geographic operating base and planned implementation across our nearly 40 properties in North America, our players will be able to enjoy these unique and entertaining episodic experiences at any Harrah's casino they visit that features these unique STAR TREK games on the casino floor," concluded Tim Stanley

November 30, 2008

Kentucky Enforces Law Against Real Gambling Devices, Not Domains

A Kentucky judge this week demonstrated at least one person in the state understands the meaning of "gambling device." Clark County District Judge Earl-Ray Neal ordered ten business owners to forfeit the video poker machines they were using to conduct illegal gambling.

The court also kept proceeds associated with the machines in an amount over $10,000. The defendants were also given suspended sentences which would put them in jail for six months if any further legal trouble arose.

Kentucky Governor Steve Beshear has been using the statute outlawing the use of "gambling devices" in a contorted way to attempt to seize the domain names of 141 online casinos. Judge Thomas Wingate has ruled in Beshear's favor, deciding that Internet gaming sites that cannot prove they are blocking access to Kentucky citizens must forfeit their domain names.

The case is under appeal, and will be heard before the Kentucky Court of Appeals December 12th. While the action is being contested for a multitude of reasons, including the violation of several clauses of the Constitution, one of the major attacks on Wingate's ruling is the misapplication of the old Kentucky law.

Passed in the days before the Internet, the law clearly means actual, physical machines, such as the video poker machines pulled in the police raids. A domain name is not a "device', nor is it located in Kentucky's jurisdiction.

If Kentucky politicians want to follow their own laws, they would be forced to find machines that facilitate gambling in this case. The servers hosting the sites may be applicable, except they aren't anywhere near Kentucky. The computers used by citizens to play may be the closest thing to a "gambling device" in Kentucky jurisdiction.

If Beshear were to seize the home computers of online casino patrons, it would at least show his intentions. After all, it is the mark of repressive government to deny people access to communication, and make no mistake, Beshear's moves are absolutely repressive. At least then Kentucky voters would understand the type of censorship and Big Brother leadership Beshear is presenting.

November 29, 2008

New Democrats lose their shirts tackling Liberals over gambling

VICTORIA - Stung by accusations that they came unprepared for the brief legislature session, the New Democratic Party promised a double-headed effort to hold the government to account Thursday.

Opposition leader Carole James started it off, tabling a proposed toughening of provincial lobbyist registration and conflict of interest rules.

The Government Integrity Act, she called it.

Her purpose was to set up a well-aimed line of questioning for Attorney-General Wally Oppal. For two years, he's been saying the Lobbyist Registration Act is flawed and needs fixing. Where was the fix?

In reply, Oppal made two points, both familiar. First, the current act is a product of the Liberals, New Democrats having done nothing to enforce lobbyist registration during their decade in office.

Second, well, let Oppal tell it: "The short answer is I do believe the act needs to be fixed."

Oppal seems to regard the latter as the ultimate argument settler. He agrees that the act has outlived its time and needs to be brought up to date. Therefore, shut up and let the Liberals get on with it.

Except the Liberals have had plenty of time to fix the act, if that were their intention.

Oppal's disarming tendency to side with the critics only confirms that he is not the obstacle to improved lobbyist registration in B.C.

More likely, as James noted, the premier is the source of the problem.

Score one for the New Democrats. But the second line of attack didn't go as well.

The ground was well prepared. The NDP was springboarding from some first-rate investigative work by Sean Holman, reporter for 24 Hours newspaper and the online Tyee.

He reported Thursday on the roundabout way that bingo halls and gambling centres were donating money to the B.C. Liberals.

They'd given the governing party about a quarter of a million dollars over five years, under names not obviously linked to gambling facilities until the connections were ferreted out by the intrepid Holman.

"They don't want to have it through the actual company," as one of the operators told Holman. "They'd sooner do it on a private basis."

Otherwise, as the fellow went on to explain, people might make the link between donations from the industry and the expansion of gambling under the Liberals.

The New Democrats simply needed to make the link via some pointed questions in the house. Unfortunately, they blundered in without due care and attention to the pitfalls regarding their own party.

After all, gambling-related scandals -- one involving charity bingos in Nanaimo, the other casino licensing in the Lower Mainland -- led to the resignation of two NDP premiers in the 1990s.

Apparently unmindful of that history, the New Democrats let Leonard Krog pitch the first question on the gambling controversy.

The B.C. Liberals couldn't believe their good fortune: Krog is the MLA for Nanaimo.

"Well, I am almost speechless," returned government house leader Mike de Jong, who was anything but.

"To hear a member from Nanaimo, home of one of the worst scandals in the political history of this province, stand up and make these reckless, irresponsible allegations . . . ."

November 28, 2008

Francis Grevemberg; Crusaded Against Illegal Gambling in La.

Francis Grevemberg, 94, a former state police superintendent who led a sledgehammer-swinging crackdown against illegal gambling in Louisiana in the 1950s, died Nov. 24 in Conyers, Ga. He had respiratory problems after surgery for a broken hip.

Mr. Grevemberg was credited with leading raids that resulted in troopers smashing about 7,000 slot machines and mothballing thousands more when he served under then-Gov. Robert Kennon from 1952 to 1956.

In a 1989 interview, Mr. Grevemberg said gambling-related corruption was so pervasive in Louisiana in the 1950s that he had to keep the raids secret from local sheriffs and police chiefs and some of his own troopers for fear they would warn the targets.

He received death threats, and an attempt was made to kidnap his twin sons, then 2 1/2, from their New Orleans home months after he took office.

"Honestly, if I had known what I was getting into, I would never have taken that job," he said.

Mr. Grevemberg broke a long media silence in that 1989 interview, which he granted because Louisiana was on the verge of legalizing a state lottery, a step that would be followed by legalized casino gambling and video poker machines in bars and truck stops.

November 27, 2008

This weekend, punters in mainland China will be able to have a flutter on the horses for the first time in 60 years.

Saturday's meeting at the Orient Lucky City racecourse in Wuhan, a sprawling industrial city in central China, will see the return of gambling to the mainland for the first time since the Communist Party came to power in 1949.

The only betting available has been a state-run sports lottery, which has proved especially popular in southern China.

However, as the Chinese economy crumbles, the authorities have brought forward their plans to permit gambling, once derided as feudal, colonial and backward, in a bid to boost local government revenues.

Officials have long been envious of the success of the Jockey Club in Hong Kong, which is now the island's single largest taxpayer. Qin Zunwen, a researcher, told the Changjiang Times newspaper that a national horse betting industry could create three million jobs and an annual revenue of £8.5 million. He added that legalised gambling could flush out China's hordes of illegal internet punters.

Wuhan, which was once divided up among European powers as a "concession" or colonial settlement and British residents turned it into a horse-racing centre in the late 19th century. It will now host races twice a week.

So far, the use of the word "gambling" has been avoided, and the races are described as "commercial horse race meetings" or "horse lotteries". The meeting on Saturday will feature seven races, and prizes totalling 120,000 rmb (£11,500). Two meetings, featuring five to seven races, will be held each week.

Wang Shenshun, deputy director of the Wuhan sports bureau, said the meeting would be "an experiment in the commercialization of horse racing in China".

He declined to comment on how quickly a national horse betting industry might develop.

"It's a new thing for people," said Deng Shentao, a 40-year-old lawyer from Wuhan, to the China Daily. "I'm interested in buying a horse and getting involved in the races. It has to be more fun than investing in property or stocks."

November 26, 2008

Place your bets, will Internet gambling be legalized?

After more than a decade of hit-and-miss efforts by individual casinos and interest groups to develop lobbying strategies for legalized Internet gambling, the American Gaming Association -- the industry's premier trade group -- is rushing to clarify its position.

The new sense of urgency comes as a presidential administration that appears friendlier toward the prospect of legalized Internet gambling prepares to take office.

To present a unified front, members of the association have to work through at least three viewpoints. Some casino companies support federal regulation of Internet gambling. Other members want that authority to rest with the states, like the regulation of non-tribal casinos. Still others, fearing competition from land-based casinos with online outlets, oppose regulation that would open the door to new rivals.

The group's largest members, MGM Mirage, Harrah's Entertainment and International Game Technology -- which have been or are involved in Internet gambling ventures in countries where it's legal -- support legalization.

The association has, of late, supported a more conservative approach, favoring a bill that would study whether to legalize Internet gambling, though some advocates say that might be a waste of time.

It isn't the first time the association's dozens of members have disagreed on policy. In the 1990s, members were divided on whether to support gaming efforts by Indian tribes, some of which were partners with Las Vegas casino giants. The Nevada Resort Association, and later the American Gaming Association, decided to remain neutral.

As a first step, the association has formed a working group to study bills that have cropped up in the past year.

Rep. Barney Frank, D-Mass., chairman of the House Committee on Financial Services, has introduced a bill to regulate online gambling sites by exempting licensed operators from the federal ban and creating protections against underage gambling, compulsive gambling, money laundering and fraud.

Other bills were introduced in Congress last year and this year to legalize online poker at the federal level.

In California, state Assemblyman Lloyd Levine has introduced a bill to legalize Internet poker for California residents.

At last week's Global Gaming Expo, the gaming industry's largest conference, Internet gambling experts concluded that legalizing online poker -- as either a fallback position or an ultimate goal -- would be more palatable to politicians and the public than legalizing other forms of Internet gambling.

Online sports betting appears to be off the table entirely because of a framework put in place to prosecute phone betting during the mob's heyday, as well as a 1992 law giving Nevada a monopoly on legal sports betting, experts said.

Whether regulatory authority should reside with states or the federal government is also up for debate.

Federal regulation makes sense because it would establish a level playing field for operators while allowing individual states that oppose gambling to opt out, said John Pappas, executive director of the Poker Players Alliance.

A PricewaterhouseCoopers study conducted this year in support of federal regulation estimated that online gambling could generate at least $9 billion in fees and taxes for the federal government over the next decade.

The prospect of federal oversight worries some casino operators. Casinos formed the American Gaming Association in 1995 in part to keep would-be meddling federal regulators at bay.

The Poker Players Alliance, a grass-roots group that has ballooned to 1 million members in just a few years, is pressing to legalize online poker. It argues that poker is primarily a game of skill and should therefore be exempt from the Wire Act, the basis for the federal government's ban on Internet gambling.

The Bush and Clinton administrations have maintained that the Wire Act prohibited all forms of online gambling, in spite of an oft-cited federal appeals court ruling in 2002 that the law primarily applies to sports wagering.

Congress further criminalized Internet gambling in 2006 through a much-criticized law that prohibits banks from processing online wagers. Meanwhile, states' attorney generals have prosecuted online gambling sites and related advertisers.

Internet gambling declined as a result of the 2006 legislation, which prompted several offshore operators to stop accepting bets from Americans. But it's once again on the upswing as bettors gravitate toward black market sites and use other payment mechanisms -- such as wiring money to foreign bank accounts or using foreign credit cards -- beyond the reach of the law.

November 25, 2008

Hong Kong man given 8-years in jail for running online gambling Websites in SW China

A Hong Kong man, found guilty of running a number of gambling Websites, was sentenced to eight years and fined 20 million yuan (2.9 million U.S. dollars) in southwest China's Yunnan Province.

The case, believed to be the country's biggest online gambling case, involved about 8.68 billion yuan in wagered money and more than 278 million yuan in illegal profits, a source of the Yunnan High People's Court said on Wednesday.

Tam Chi-wai, a Hong Kong resident, set up a gambling house in Myanmar in 1999 and then started to develop an online betting network.

He and this accomplices established several gambling Websites and placed the computer servers in Guangzhou and Dongguan in the southern Guangdong Province.

One of the Websites attracted 5,198 registered users from August 2006 to March 2007.

More than 3,000 people used to work for the Tam's gambling network. Some employees managed Websites while others took charge of maintaining the betting network. Other members held hundreds of different bank accounts to hide illicit earnings.

In June, the Intermediate People's Court in Kunming, the provincial capital, gave Tam an eight year jail term and a 20 million yuan fine, but he appealed the sentence. The provincial high court upheld the initial sentence.

According to China's law, it is illegal to set up a gambling party or gambling house.

November 24, 2008

Protectionism Doesn't Halt Kentucky Track Gambling Disadvantage

While some of the damage may be in direct response to Beshear, as calls to boycott Kentucky gambling have echoed around the Internet, more is related to strict Kentucky gambling laws that prevent tracks from achieving an even playing field.
Governor Steve Beshear's rabid attack against online casinos has not prevented Kentucky racetracks from suffering at the hands of competition. Although Beshear's ongoing move to force forfeiture of 141 Internet casino domain names has caused some online gambling venues to withdraw from Kentucky in particular and the U.S. in general, horse tracks are still losing revenue.

While some of the damage may be in direct response to Beshear, as calls to boycott Kentucky gambling have echoed around the Internet, more is related to strict Kentucky gambling laws that prevent tracks from achieving an even playing field.

States that use video poker and slots at their racinos to help fund purses are drawing horsemen away from Kentucky. Louisiana and Pennsylvania have become meccas for the racing industry, as good track management has combined with well-reasoned law to devise systems that help horse racing grow, while allowing patrons other forms of gambling.

Churchill Downs has dropped purses in its current meet. Tough economic times, plus the lingering boycott of unhappy Internet gamblers, and the nearby availability of racinos in Indiana and Pennsylvania, have led to diminished crowds. Meanwhile, Pennsylvania purses have more than doubled since slots and other gambling was brought to tracks.

Sherman Bradley, the Online Casino Advisory gaming analyst who originated the boycott, says, "Beshear would better serve his state by pushing to fulfill his campaign promise to bring casinos to Kentucky, rather than worry about blocking online casinos. Gamblers find ways to gamble, and they will discover a new Internet method, or drive across state boundaries, to play as they choose.

"The best way to increase state revenue and support the tracks would be to improve the gambling environment there, by adding slots and video poker. Of course, if the Governor follows his past thinking, he'll next try to prevent cars from driving over state lines."

November 23, 2008

Texas Police Charge Man With Gambling Offenses

Texas authorities have used organized crime statutes to indict an Austin businessman for running an illegal gambling operation. The prosecutions have come even though Texas law requires patrons be rewarded monetarily to qualify as illegal gambling, which did not happen in this case.

Gordon Graves and his company, Aces Wired, have opened amusement centers throughout the state, featuring eight-line machines modeled after Vegas slots. But Graves investigated the law before developing his business, and found that he could legally reward players with coupons exchangeable for merchandise or services.

Graves opened his first gaming venue in 2005, and by this year had over six hundred machines operating in six locations. The first three quarters of the year have yielded over $8 million in income. But officials in several counties have closed centers and confiscated machines and cash over $1 million.

The attorney representing Graves, Roy Minton, doesn't understand why law enforcement is after Graves. "Mr. Graves is dedicated to being sure he hasn't violated any state or federal gambling laws."

And Aces Wired lawyer Paul Coggins added, "Once two or three of these district attorneys lose their cases, the rest will figure out this is not a worthwhile way to expend their resources."

In the meantime, Aces Wired has laid off most of its workers, and declared a net loss of $13 million for the first three quarters. Texas prosecutors may lose their case and still force an honest entrepreneur to shut his business, costing people employment in these troublesome times.