by Hillary LaClair, Senior Editor February 24, 2009
Party Gaming, an online casino provider that made headlines this year for its involvement with the Department of Justice, announced today that it has launched an Instant Internet banking feature, which will allow players to make financial transactions directly from the website. ESI Entertainment Systems, a payment processing giant offering services to international e-commerce establishments, and its subsidiary, Citadel Commerce, will process instant bank transactions for Party Gaming PLC.
“We’ve had a long relationship with Citadel and we are pleased to take advantage of their new payment method. Low cost and immediate local payment solutions are a key element of our business and we believe that Citadel’s Internet banking solution provides an attractive new payment option for our customers,” said Jim Ryan, Party Gaming CEO.
Michael Meeks, President of ESI and Citadel, added, “PartyGaming is clearly recognized as a prestigious leader in the industry, and we are please that they are utilizing our Instant Internet banking to provide their customers with a secure and easy-to-use alternative to credit and debit cards.”
Party Gaming has managed to survive as a leading online casino, despite one of its co-founders having pled guilty to charges of accepting U.S. wagers prior to the implementation of the UIGEA – and agreeing to a $300 million settlement. It has integrated Citadel’s Internet Banking product, a white label payment processing solution that provides support for instant and quick online bank transfers in over 38 countries, into its own cashier system.
by Hillary LaClair, Senior Editor February 21, 2009
While the land casino industry continues to decline, with media outlets reporting Las Vegas as a ghost town in recent months, the last thing the management needs is an injury lawsuit. Perhaps yet another reason why online casino show more growth than land casinos is that there is no physical location for its players to attend, and therefore no accident reports.
An El Cajon woman recently sued an Indian tribe that according to the San Diego Union-Tribune, “broke new legal ground for personal injury suits against tribes.” A settlement agreement of $500,000 was the result.
Allegedly, Celest Bluehawk slipped in the Golden Acorn Casino, fell and injured her back on a newly mopped floor some time in 2002. The casino, operated by the Campo Band of Mission Indians, was issued with a summons to court following the accident. The lawsuit eventually led to a ruling in the 4th District Court of Appeals in San Diego. While casinos have faced litigation before for multiple reasons, including gambling addictions and removing an obese man with extremely poor hygiene, this is the first recorded case of justices intervening in a tribal legal matter – ordering the tribe to bring its case to arbitration. The tribe attempted to have the ruling appealed by the Supreme Court, but the court refused to accept the case.
According to the Tribune, a videotaped showed that the signs indicating a freshly mopped floor were not placed at the scene until after Bluehawk had injured herself. The videotape was not turned over to Busby until 2007, nearly five years after the incident occurred. Apparently, Bluehawk visited the casino, located off of Interstate 8, east of Pine Valley, to gamling in December of 2002 after she finished a shift as a poker dealer in the Viejas casino.
“They were basically refusing any state court jurisdiction over the case for years, then four years into it the videotape shows the cleaning lady putting out the cones after she was down,” said Busby.
Indian tribes are insulated from most U.S. legal action because of the doctrine of sovereign immunity – the legal right for governments, and tribes are considered separate governments, to the shielded from lawsuits. Bluehawk had filed a claim with the tribe prior to the lawsuit, but its insurance carrier denied it. Therefore, she turned to the Superior Court in El Cajon, where a judge ordered that it be sent to arbitration.
Perhaps for cases such as this, many tribes have begun to operate casinos online, such as the Mohawk Gaming group and the Kahnawake Gaming Commission which licenses and regulates such casinos as Party Casino, bet365, Golden Casino Eurogrand, Zodiac Casino Wild Jacks Casino, Vegas Red, and Spin Palace among its 10,758 members.
The Gaming Commission, established in June of 1996, is comprised of three members appointed by the Mohawk Council of Kahnawake, and has been given the authority to regulate and control gaming and “gaming related activities” conducted within and from the territory of Kahnawake, Canada. Casino operators can apply for a license by visiting www.kahnawake.com/gamingcommission.
by Hillary LaClair, Senior Editor February 14, 2008
Many anti-gamblers have proclaimed that the internet is a gateway drug of sorts for the problem gambler. Opponents of online casinos argue that such an easily accessible industry opens the door for gambling addictions in youth. However, recent studies show that MMORPG’s, or Massively Multiplayer Online Role-Playing Games, are the monsters hiding under our children’s beds – with addiction rates an astonishing 32 percent higher in World of Warcraft players than in gamblers.
A study by Howard Shaffer of Harvard, who has intensely studied the behavior of gambling addicts, found that less than 2 percent of Americans are compulsive gamblers out of the 8 percent that has admittedly engaged in online casino gambling. Conversely, a study from clinical psychologist Dr. Maressa Hect Orzack shows that of those who play Blizzard Entertainment’s World of Warcraft, adoringly labeled World of Warcrack by many of its players, 40 percent have an addiction to the game.
Orzack, who has studied problem gaming for 11 years as the founder and coordinator of the Computer Addiction Service said that, “even if the percentage is 5 to 10 percent which is standard for most addictive behaviors, it is a huge number of people who are out of control.”
She notes that in an MMORPG, the player is subject to “variable ratio reinforcement,” a term used in psych circles to describe how the game rewards correct behavior to keep its players enticed. E.G. A lab rat that must press a bar to be given food will press it faster and more often if it is unaware of how many times it needs to do so. In World of Warcraft, players are rewarded with an “epic” piece of equipment when playing the game, but are never sure when it will drop or at what rate.
“This isn’t about willpower or restraint,” Orzack adds. “These games are very elaborately designed to ease you in gently, entice you, and keep you there. And it’s a cycle: people begin to spend too much time playing and their careers and personal relationships begin to deteriorate.”
For this reason, rehabilitation centers have begun to open around the globe to treat gaming addictions. At the announcement of the grand opening of the Wild Horses Center in Amsterdam, a rehab program for gaming and cellphone addictions, some WoW gamers shared the stories of their addictions.
One commenter writes on a news article referring to the clinic, “I was once a World of Warcraft Addict. I played WoW for over a year and it was quite literally the only thing I thought about. My day consisted of work, WoW and sleep with the occasional splash of something else. I did the math one day and found out that 40% of my life was spent behind the computer. 8 hours at work 5 days a week and the rest was WoW. I have not even removed the time I spend sleeping.”
The wife of a gaming addict added, “My partner is addicted to a game called Imperial Conflict to the point that it is worrying (me). He can sit up from 7 in the morning till {sic} 4 in the morning playing this stupid game. He lies about what time he comes to bed. I can’t remember the last time we went to bed together at the same time.”
Those who feel they may have a gaming problem are prompted by Orzack to contact Computer Addiction Services. Visit http://www.computeraddiction.com for more information.
by Hillary LaClair, Senior Editor February 7, 2009
Online casinos that offer a live dealer option have begun to flourish in the industry, as it builds a level of trust not always believed to be there. This feature is quickly gaining momentum in internet casinos. A number of gambling websites have begun to add live video streaming to their offerings.
When online casinos were first introduced, technical errors and delays caused gamblers to distrust the websites. A live dealer gives the internet gambler a sense of security in that they are able to verify the cards are being drawn at random.
Internet casino giants Playtech and Microgaming have jumped on the live dealer bandwagon, in casinos such as 32 Red, Bet 365, Canbet Casino and Riverbelle Casino. A number of affiliate programs have provided valuable resourced in locating reputable online casinos with live dealers, such as livedealercasino.org.
Playtech has continued to expand its live gaming casinos in newly merged William Hill, Cpays and Webrout Affiliates. “Playtech’s upcoming European live casino games reflect our commitment to continually broaden our product range and upgrade its quality. Expanding our Live Gaming offering is the natural next step for Playtech as we extend our reach and enhance the profitability of our licensees throughout Europe.” Playtech will offer live roulette, blackjack and baccarat that will be support multiple languages.
Many gamblers that had become used to a land casino atmosphere will appreciate the recent addition of live gaming in several online casinos, and will be more apt to play for real money. Allowing the player to watch a dealer physically shuffle the cards when playing blackjack or poker gives the gambling community a greater sense of a real time experience.
The London ICE exhibition this year served as an opportunity for many online casinos to showcase the new live dealer features that will bring back an element of trust to old school gamers, provide a more realistic gaming platform that is soon to be a fully mobile offering.
Livedealercasinos.org offers an informative and extensive list of internet casinos that offer this feature, with thorough reviews and commentary in four languages – separated by which accept U.S. players.
by Hillary LaClair, Senior Editor February 4, 2009
It would seem that the Balkan states, Eastern Europe, are set to join the likes of the UK and southern Europe in offering the cyber masses online casino gaming. Internet casino gambling has become a hot topic internationally, especially in the Balkan states where the economy is failing.
The Balkan states have drawn a considerable interest from online casino operators who might see a Euro 4.5 billion gambling market and 130 million sports bettors in its future demographic, according to research from the MECN consulting firm.
In a study dubbed “The Balkan Gambling Markets,” analysts found the total gambling market in the Balkan states, Greece, Turkey, Croatia, Slovenia, Serbia, Montenegro, Romania and Bulgaira, produced a total gross revenue equaled out to nearly Euro 4.5 billion after prizes were handed out – with an online gambling market worth about Euro 520 million that is currently generated in licensed offshore markets.
When determining the numbers, the MECN group based its research on the size of the gambling market that currently goes to foreign online casinos. 1 to 3 percent of the online casino market exists in Croatia, Serbia and Romania where more competition is found. Monopolistic areas such as Greece and Turkey can generate as much as 20 to 30 million Euro in annual gambling revenue.
The online casino market is slowly integrating into these states, such as Sportingbet, which attributes 5 percent of its annual revenue to Bulgarian gamers. Bwin and Bet-at-home have each joined the Balkan market. Additionally, a survey conducted by the MECN research group showed that 20 to 30 percent of online casino operators intend to expand their markets into the Balkan states.
A copy of the report on MECN’s website reads, “The report includes:
Analysis of all sectors – The report analyses all key sectors of the gambling markets: lottery, casino, betting, gambling machines, and interactive gambling (Internet/mobile).
Current market figures – Comprehensive market data, such as market size and development of sales/turnover as well as gross revenues, including 2007 and in some cases also 2008 figures.
Legal and tax information – Detailed explanation of the current legislation and the taxes imposed.
Insights from local expert – The analyses of Balkan gambling markets need local expertise. Therefore, we gathered some of the most renowned local market insiders and authors. “
The consulting firm, which specializes in online gambling, has also reported studies of the Italian, Spanish, Belgian/Dutch and German gambling markets, as well as the future of online casino gambling. It provides a monthly gambling newsletter to those interested in the success of the industry.
In the study in the future of online casino gambling, the group focuses on the impact of current development of the industry, the most affected sectors, the companies that are most and least affected by recent gaming developments, the biggest threats to the online casino gambling industry and the immediate and medium-term effects of the current threats.
MECN is comprised of a network of research experts, founded by Ex-BCG consultants. Of its 40 consultants, none are resitricted geographically, and will “source the team wherever the experts might be.”
by Hillary LaClair, Senior Editor January 27, 2009
While the U.S. government recently saw the reimplementation of the UIGEA, it continues to protect the domestic market in allowing online horse racing wagers. Although many representatives feel that online casino gambling is dangerous in that it will lead to problem gambling, it was inevitably the horse racing industry that has resulted in a serious gambling addiction this week.
When the Unlawful Internet Gambling Enforcement Act was passed in 2006, legislators felt the need to protect forms of gambling that made the state governments money – regardless of the enticing and yet equally irresponsible nature as online casinos – including online state lotteries and internet horse racing wagers. A case in Florida shows that any form of gambling can be risky, or any vice for that matter, despite the fact that it might generate money into the state.
David Sarnowski, 50, serves as this example, having been arrested in Pinellas County, Florida on Saturday, after stealing $1.6 million from a law firm where he worked. Over four years Mr. Sarnowski embezzled this money from a company for which he provided payroll services: Yarborough, Sarnowski and Evans. The reason? Sarnowski is addicted to horse racing online.
“He would bet large sums, and he would bet often,” said a spokesperson for the Pinellas Sheriff’s Office, Cecilia Barreda. Investigators says that Sarnowski electronically transferred the money into his personal account from the account of the law firm Tanney, Eno, Ingram and Griffith P.A. Sarnowski embezzled the money from June 2004 to February 2008, when he left work for good, not without first taking his work desktop computer with him.
The law firm to which Sarnowski belonged began to investigate irregularities than turned up and discovered that Sarnowski was involved in a number of them. Allegedly, he began diverting money from the firm to his own payroll account, and at the same time was not paying the IRS for payroll taxes.
“We have a government who is trying to outlaw online casino gambling, yet keep forms of gambling like horse racing and lottery’s {sic} legal. His actions show that even forms of internet gambling approved by the government can be harmful if not regulated correctly,” said Harvey Trusbel.
The case raises the question of whether it does more damage to outlaw online casino gambling, leaving internet gamblers with an unregulated industry, or to allow gamblers a properly monitored venue for gambling online.
A study in 1995 showed that out of 184 Gamblers Anonymous members surveyed, 56 percent admitted to some illegal act to obtain money to gamble. 58 percent said that they had written bad checks while 44 percent said that they stole or embezzled money from their employer. Generally, these crimes are not committed in casino-towns.
“I call it the exploitation factor,” said Professor Henry Lesiuer, who specializes in problem gambling. “Pathological gamblers commit crimes.”
by Hillary LaClair, Senior Editor January 23, 2009
International Gaming Technology, or IGT, a Reno-based slots machine giant and online and mobile gaming provider, is struggling to make its goals this year – showing a 42 percent reduction in the Q4 revenue from this time last year. According to reports released on Thursday, IGT was pulling in profits of $65.7 million dollars – selling at 22 cents per share – down from $113.7 million and 36 cents per share reported in the same quarter in 2007.
Financial analysts had anticipated that stock in the online casino and slots games provider would be sold for 26 cents per share this quarter. “Results were modestly below our expectations, with revenue slightly ahead offset by lower-than-expected profitability,” said David Katz, a gaming analyst at Oppenheimer. “Overall, the quarter’s results did not suggest that we need to make any significant change to our thesis.”
Gaming analysts said that IGT had been a victim of the declining economy since before the end of last year, however. Many casinos, feeling the effects of a sloping economy, did not invest in new gaming platforms. The value of company’s stock had decreased over 80 percent in the New York Stock Exchange in 2008. Total revenue dropped 6.8 percent from last year – from $646 million to $602 million.
“While we expect continued softness in the domestic slot market, we believe management is taking proactive approach in order to maintain margins,” opined Steven Wieczynski, a gaming analyst at Stifel Nicolaus. “Cost-cutting and restructuring efforts should allow IGT to turn revenues into profits at a swifter pace once the gaming environment improves. We believe investors are putting too much emphasis on the near term and not focusing on the potential long-term growth story, which revolves around the next replacement cycle and gaming expansion.”
IGT expanded its market into the internet casino industry in 2005 when it acquired WagerWorks. WagerWorks, with IGT, supplies gaming casino software that it claims are “uniquely tailored to meet the needs of the operator.”
Last year, IGT reached into the mobile gaming market in 2008, with its purchase of Million-2-1, a cell phone gaming software provider which offers prize competitions, voting facilities, polling facilities, lotteries, call radio, call TV activities and other interactive applications.
Still, IGT Chairman and CEO, TJ Matthews, feels that the company succeeded as well as it could, given the current economic status. “This is the worst economy in decades,” he said in a conference call with gaming analysts. “We’ve completed our initial cost reduction efforts and will continue to look for more ways to save. We’ve overcome difficult conditions and significant marketplace changes in the past. I’m confident we’re going to do so again.”
The majority of gaming analysts agree with Matthews, saying that the expectations for IGT this past quarter, given the circumstances, were low. “We think there is a lot of noise in the quarter, but it is clear that business fundamentals remain weak,” said Susquehanna gaming analyst Robert LaFleur in a statement to investors.
IGT shares closed at $11.58 in the New York Stock Exchange on Thursday, showing an increase of 1 cent.
Land casinos continue to struggle with the plummeting U.S. economy, with revenues expected to decline into 2010. The customer base is thinning as middle class Americans reprioritize their finances. The same cannot be said of online casinos, which continue to flourish, despite the recession, and their land counterparts want a piece of the action.
Las Vegas casinos in particular are warming to the idea of internet casinos, where the same variety of games is offered – from internet slots, video poker and bingo to sports betting. Strip casino operators feel that if their services were more easily accessible, specifically via the internet, they would see more visitors and higher revenues. The prospect of international gamblers is just as appealing.
Should the land casino industry collapse in Las Vegas, 26 percent of Nevada’s workforce would suddenly find themselves unemployed. This accounts for 732,000 jobs and $29.4 billion in wages.
With this in mind, David Schwartz of the UNLV’s Center for Gaming Research has advocated a legalized internet gambling industry. “Basically people are allowed to gamble but they don’t have any of the protections they would get from legal gaming,” said Schwartz. “Having legal online gambling would really help the Strip casinos with their marketing. It would help them find out who is gambling out there.”
For many in the U.S., a trip to the casino means plane tickets, hotel rooms and time away from home, as gambling is banned in 11 States. While many gambling in online casinos cite this as the reason, some feel taking a trip to the casino is all the fun. “You get something for your money instead of sitting in front of a computer,” opines Joe Bonin.
Industry experts claim that the addition of an online casino option to Las Vegas establishments would be more of a marketing tool than an economic one, as the revenue would be miniscule compared to that of live casinos. “I don’t think it would magically save everything,” Schwartz added. “It may help reverse the decline, but obviously they are going to have to get more people coming on here if they want to bring the revenues up.”
Casino operators now look the President-elect Barack Obama to overturn anti-gambling laws as the only obstacle that stands in the way of the industry. Although internet gambling has been the recent hot topic of U.S. legislation, no timeline has been determined for the reconsideration of the Unlawful Internet Gambling Enforcement Act (UIGEA).
David Schwartz has served at the University of Nevada Las Vegas since 2001, where he oversees the acquisition of new material for the Center. Schwartz gives lectures and consultation on gaming related issues as well.
He was born and raised in Atlantic City and holds a master’s in anthropology and history. From there, Schwartz earned a doctorate in US History at UCLA. As one of the youngest Ph.D.’s at UCLA, he filed his dissertation, Suburban Xanadu. Now a published book, Suburban Xanadu has, according to UNLV, “charted the evolution of the casino industry on the Las Vegas Strip from 1945-1978.”
by Hillary LaClair, Senior Editor December 20, 2008
The public is astonished by the growing success of online casino gambling during an economic crisis, calling it a recession-proof industry. While many land casinos are on the brink of bankruptcy, recent internet marketing surveys show a dramatic increase of in the number of visitors to online gambling websites. Experts have reason to believe that the source of the revenue has everything to do with advancing market.
Recent reports from the Fitch Ratings industry predict that the U.S. land casino industry can anticipate a continuing decline in revenue until the year 2010. “Following one of its most challenging years in recent history, the U.S. gaming industry will remain under significant pressure in 2009, with a recovery unlikely until 2010,” the publication reports.
Las Vegas and Atlantic City resorts are not the only markets to receive such a blow to their revenue. According to Susan Lopez of the Sin City Alternative Professionals’ Association, the controversial escort service industry has suffered a significant decrease in demand. Unlike the automobile industry, such markets will not expect a bail-out any time soon.
Middle-class prostitutes say that they have had to cut their rates to compete with internet markets. Those charging $1000 or more have been able to maintain the elite consumer base, while those earning more than $300 but less than $1,000 are struggling. Lopez claims that prostitutes who make under $300 per customer are gaining the customers that used to go to middle-class call girls.
Amanda Brookes, author of the Internet Escorts Handbook has suggested a more powerful marketing strategy. Brooks believes that call girls must go the way of online casinos, offering their services to internet-users.
Many businesses, including even pizza delivery services, are jumping on the virtual bandwagon to maintain demand for their products. Consumers prefer online-shopping for several reasons, such as the convenience, money saved on traveling expenses, and the ability to read reviews and testimonials.
For the escort service, an online industry would provide a certain amount of privacy and anonymity that is not currently available. However, Brooks reports an issue that online casino users and industry officials are all too familiar with. The Department of Justice is most likely to shun the idea of internet escort services and decide that, much like accepting online wagers, it would be a violation of the Wire Act. Such a violation could result in a similar ruling to the litigation against PartyGaming, who suffered a $3 million fine.
Interestingly, Malaysian media outlets show a higher interest in online gambling than prostitution. According to local newspapers, authorities are cracking down on licensed massage parlors that are being utilized for prostitution as well internet gambling. Patrons were more often accessing illegal internet gambling venues than escorts.
Therefore, Councilor Datuk Azizan Ahmad has pushed for a zero-tolerance policy in licensed massage parlors. His council voted on the issue, and have decided that violations of such policy are punishable by a hefty fine, or in more serious circumstances, the closing of the establishment.
by Hillary LaClair, Senior Editor December 11, 2008
The move by a group of Australian politicians to censor internet content, including online casinos, was not well received this week. Government officials had requested that a two-tier filtering system be implemented by Internet Service Providers during a trial period, to determine whether Internet censorship would be beneficial.
The trial period was scheduled to begin sometime before Christmas of this year, in which the filters would block internet users from accessing “illegal” content, and “inappropriate” adult content as an optional feature.
However, the move has met many criticisms, with opposition coming from the Greens, the official Opposition, the internet industry, consumers and net neutrality groups – thousands of activists have signed petitions against the move. Most shocking is that recently, child protection groups began to speak out against the censorship.
According to the Sydney Morning Herald, among other criticism in response to the Rudd government’s attempts, the Internet Service Providers have outright refused to enforce the censorship of online content during the trial period.
The article in the Herald states the two-tiered filtering system would require one tier to ban content such as internet casino gambling and other material labeled as “unacceptable,” while the other would be optional – allowing internet users to filter any additional “unwanted material” such as adult websites.
The filtering system has not proven to be as effective as all of that, however, as in June, laboratory results showed that some filters frequently allowed unacceptable content which blocking appropriate content and slowing network speeds by up to 87 percent.
Australia’s most widely used ISP, Telstra, has already announced that they would have no part in the trial. Some smaller ISP’s agreed to a smaller trial period, but have not shown the enthusiasm that the government would like. iiNet agreed to run the trial period only to illustrate that the filtering system would be ineffective and Optus has said it will only test a “heavily diluted” filtering model.
Others question what is considered “inappropriate,” “illegal,” and what would be filtered as “unwanted.” As internet censorship is a sensitive subject, some criticize the government for having too broad of a list of what content falls under these categories, having risen from 1,300 to over 10,000.
Critics are calling for the trial period to be abandoned, saying that it was “…hopelessly flawed and a certain failure.”
Vice Chairman of Electronic Frontiers Australia, Colin Jacobs, compared this project to the failed attempts to ban online casino gambling in the U.S. with the UIGEA. “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.”
Stephen Conroy, Communications Minister to Australia has responded to critics claiming that the filtering trials would be “…a closed network test and will not involve actual customers.”
Australian Greens Senator Scott Ludlam said that he feels this indicated a possibility that the government may be reconsidering the filtering system, as heavily criticized as it is. Australian proposals in favor of internet censorship are often referred to as the “Great Australian Firewall,” “Firewall Australia,” or “Great Firewall Reef.”
