Nevada Columnist Discusses Future of Online Gambling

by Hillary LaClair, Senior Editor
December 9, 2008

                Jane Ann Morrison, an editor with the Las Vegas Review-Journal, featured an article this week that renewed the hope for legalized internet casino gambling. Her column provided an analysis of the recent ’60 Minutes’ segment, and its printed counterpart in the Washington Post, which discussed the Ultimate Bet and Absolute Poker cheating scandals.

                In the piece, Morrison says that she believes both the CBS news program and the widely read newspaper will improve the odds of passing Congressman Barney Frank’s proposal to legalize and regulate online gambling in that they bring much needed attention to the industry. She is not the only person who supports this idea, apparently, as she has said that Bo Bernhard, director of gambling at UNLV’s International Gaming Institute, agrees with her.

                Morrison feels that because the news stories focused on the fraudulent activity within the cardrooms, it has heightened the demand for regulation and security of internet gambling – and to tax the revenue.

                “The heart of the Washington Post story was that poker players were cheated out of more than $20 million over four years through scams uncovered at and, two online poker sites. The Washington Post’s two-part report ran Nov. 30 and Dec. 1 in the Review-Journal, and the “60 Minutes” segment aired Nov. 30,” Morrison wrote, as she explained that Frank’s bill would overturn the UIGEA, except in the case for online sportsbetting, due to pressure from the NCAA.

                Morrison also notes how the online casino industry may look more appealing to upcoming administration because of the tax revenue that it could provide, in times of economic crisis.

                Bernhard told Morrison that he worried about the effects a regulated online casino industry could have on the nation. “I’m torn. I believe in my Nevada soul that a gaming industry that’s regulated properly, licensed, subject to rigors, is a good thing,” said Bernhard, who headed the first research project to study internet gambling in Nevada. “But I’m also sensitive to the problem gambler and the underage gambler.”

                In the article, Morrison poses the rhetorical, why would Nevada residents have any desire to play online poker, with the state having the densest concentration of casino in the country. “The same reasons folks in other states without casinos gravitate toward online poker: convenience, lower stakes and speed. Apparently this is a young man’s form of recreation, and a young man with more education and more money.”

                Bernhard’s study showed that 3.7 percent of Nevada residents played online poker in the last five years, the same percentage are the rest of the country. According to a surveyed group of 1,000 persons, the biggest concern among Nevada gamblers is that they are unsure if they are “getting a square deal with online poker.”

                The study shows that players are unconcerned about cheating from the gambling websites themselves, as they trust they sites but not the other players.

                “They were definitely convinced that collusion took place among other gamblers at virtual poker tables,” the study read.

                "The sympathetic approach of the Washington Post and "60 Minutes" makes it seem like it’s practically the government’s job to protect poker players," Morrison concludes. "But in reality, the casino companies are coming around to the belief that if they can make money through online betting without spending billions to build a property, it may be time to drop their opposition. And if it’s taxable, that’s bound to get government support.
"But the question remains, if the software is so vulnerable that players were cheated of more than $20 million, can government regulation really protect the online bettor?"

Unlike the Auto Industry, No Bailout Anticipated for Casinos

by Hillary LaClair, Senior Editor
December 8, 2008

           Online casino may not be feeling the effects of the global economic crisis, but the same cannot be said for their counterparts. While the automobile industry in Detroit may be considered for a government bailout, gaming resorts are not so lucky. Casino stocks are plummeting, resorts are closing and jobs lost by the day.

            The loss of the U.S. automobile industry in Detroit may soon spawn the next Great Depression, some opine. With the loss of jobs and the failing U.S. economy, there are fewer car sales says the Center for Automotive Research, a Michigan-based organization.

            According to the Las Vegas Sun, “The same could be said of gaming and Las Vegas, which, like Detroit, has been hard hit by the downturn. Casino layoffs and reduced work hours are affecting nearly every sector of the local economy, including forcing the state, with 50 percent of general fund tax revenue coming from casinos, the cut one-third of its budget.”

            The current economic state of the U.S. has reached farther than just the automobile and casino industry, extending to budget cuts in education. New York recently suffered an $800 million reduction in school aid, as part of a plan to slash $2 billion from this year’s state budget.

            Unlike schools, however, the automobile and casino industry had a “bigger-is-better” mentality before the economy crashed, contributing to their downfall. While carmakers produced more and more SUVs to meet American demand, casino developers in Las Vegas borrowed money from Wall Street to create larger, more elaborate properties for the strip.

            According to the Center for Automotive Research, 352,241 Americans were employed in the automobile industry in September. An estimated 3 million jobs will be lost should the industry fail completely, with 973,969 more jobs lost in supplier and other related work fields. A 50 percent reduction in operations would cost at least 2.5 million jobs and $50 billion in tax revenue, according to the Research Center.

            Similarly, the U.S. casino industry employed more than 706,000 in 2007, and gaming manufacturers employed more than 28,000. The American Gaming Association has not released figures on the multiplier effect of the industry, although Applied Finance estimated tribal gambling accounts for 732,000 jobs and $29.4 billion in wages. Michigan’s auto industry is responsible for 22 percent of the state’s workforce, compared to the casino industry which is responsible for 26 percent of Nevada’s state workforce.

The difference here is that there will be no legislators begging for a bail out of the casino industry, despite the effect its loss could have on the economy. The American Gaming Association believes that this may make the online casino industry seem more appealing to the upcoming administration, as it still thrives, even in the U.S. The country stands to gain some billions in tax revenue in the event of its legalization. While the AGA has said that it does not wish to endorse internet gambling, it has lobbied for legislation that will require a study of the effects of the online gambling industry.

British Woman Denied National Lottery Winnings

by Hillary LaClair, Senior Editor
December 5, 2008

                A British woman lost GBP 7,000, due to a technicality, when she made a deposit on the British National Lottery from a vacation spot in Spain. The woman, who had frequently played the National Lottery “Hot Picks”, had installed the internet in her home in Spain so that she could continue to play while on holiday.

                Accessing the Camelot online channel of the lottery, the woman won GBP 7,000. When she attempted to claim her winnings with the Interactive Customer Care Unit, she was instructed to provide a plethora of personal details. After explaining to a representative that she was in Spain, she was told there was a problem and promised a return phone call.

                After some time with no call back, the woman made a second attempt to claim her winnings. It was then that Rebecca Renshaw, Head of Player Services, informed the woman that she would not be paid, as she had breached Spanish law when she entered the lottery from her vacation home. According to Renshaw, the Camelot National Lottery was not within their legal rights to pay out on her winnings, and that the company would not make an exception.

                Undoubtedly frustrated, the woman searched through 120 pages of the company’s regulations where she discovered a section entitled, “Can I play from overseas?” There she discovered that when playing outside of the UK, gamers were to abide by the laws on the country that they are in. In some cases, the country forbade participants to gamble online. Spain was one of these countries.

                Another section under the heading, “US/other jurisdictions,” explained that when playing the lottery in jurisdictions where online casino gambling is unlawful, participants would not be able to collect their prize.

                Santiago Aseni, a legal consultant, advised the woman of a bill in the making which would allow for online gambling regulation in countries within the European Union. Until then, howeber, he explained that Spain was within its rights to prohibit this form of gambling.

                InfoPowa suggests that this incident serve as a warning to online lottery players. “The tale is a cautionary one for Brits overseas who use the Internet to gambling on the UK National Lottery, and the deprived woman warns that this disqualification pitfall should be more clearly flagged by lottery officials. She speculated that there must be hundreds of expats living in Spain or spending certain periods of the year on holiday in the country like herself, who continue to take a punt on the lottery thanks to the wonders of the Internet, quite oblivious to the fact that they will not be able to benefit if they enjoy good fortune.”

Hop-on to Introduce Mobile Casino

by Hillary LaClair, Senior Editor
December 4, 2008

                 With the growing popularity of the mobile gambling market, or WAP betting, Hop-On Inc. has jumped on the bandwagon. According to a spokesperson, the California-based cell phone dealer is looking to secure its place in the market, and seeking a software provider to host an online casino.

                “Because of the overwhelming popularity of gambling in mainstream markets, the opportunity for mobile gambling is enormous,” said the spokesperson. “Hop-on is expanding our business beyond cell phone manufacturing and is currently seeking software distributors in Europe, Asia, North and South Americas to partner with us as casino hosts.”

                Hop-on has designed an online casino that WAP bettors can access using satellites, GSM/CDMA networks and Wifi. The company will provide its users with baccarat, poker, blackjack and roulette. Card games will be offered in real time, streaming live interactive feed of real dealers. The company expects to lead the casino industry in multiplayer online games, or MMO games.

                Both GSM (Global System for Mobile Communications) and CDMA (Code Division Multiple Access) are commonly used technologies by mobile phone networks for transmitting information.

                Hop-on president, Peter Michaels, claims, “With the assistance of social networks and broadband capabilities, interactive cell phone wagering will be huge. Mobile gaming is estimated to reach 12 billion in wagers by 2010. Our casino hosts will distribute prepaid game cards to players in many different jurisdictions.”

                Things may not quite pan out as expected, however, as the company has not yet received a license to legally provide the online casino games. While negotiations are in progress to obtain a license from a G7 nation, nothing is written in stone.

                The casino will be launched through Open Handset Alliance, through the use of an “Android Platform” phone. The phone with the software will be sold for less than $200. OPH hosts over 30 members, uncluding mobile handset makers, application developers, some mobile carriers, chip makers. The company is headed by Google (NasdaqGS).

                Michaels concluded, “We will be bringing Mobile Gaming to Europe where gaming is legal, secure and regulated. New 3G wireless technologies and phones will play a big role in the growth of mobile gaming by making it more convenient and secure. These new networks and phones will allow real-time, exciting action and player to player betting [will] be possible.

                “Hop-on is committed in bringing the latest technology to the market, the Android open platform makes Hop-on competitive in the high-end mobile phone market. This will create market value for our shareholders.”

                Hop-on Inc. develops and markets wireless phones and accessories for domestic carriers. They are most well known for the development of the world’s first disposable cell phone.

                The forecast for mobile gaming, as reported by High Beam research, shows that the market is expected to reach $16 billion, with the total wagers increased by more than 100%. While mobile betting, or WAP wagering has become very popular, the rollout of such services has been limit to a select few markets, such as the UK.

New Chinese Operating System Puts Damper on Online Casino Users

by Hillary LaClair, Senior Editor
December 3, 2008

               The southern Chinese city of Nanchang has announced new requirements for its internet cafes which will make access to online casinos more difficult for its users. With cafes instructed to install a Chinese developed operating system, concerns have mounted over “cyber-snooping” by authorities.

                According to the Associated Press, the new rules were implemented one month ago, although never officially announced. The use of the new program was made in response to a pirated software said Hu Shenghua, a spokesperson for the Culture Bureau in Nanchang.

                The enforcement of this new rule will force internet café owners to remove any unlicensed software and replace it with copies of either Microsoft Windows or Chinese-developed Red Flag Linux operating system – with a fee to top it off.

                The Associated press says otherwise, claiming that even users who had authorized copies of Windows installed on their computers were forced to install Red Flag Linux. The AP quoted Xiao Qiang, director of the China Internet Project who said that the new rules would help authorities snoop on internet cafes that “now operate on the margins of the law.”

                Those who access Chinese internet cafes are already required to register with identification cards. No matter where the internet is accessed, Chinese specialists patrol internet content, searching for content that they feel is politically subversive or related to online casino gambling, pornography or other sources of inappropriate content.

                One Chinese internet café owner told the Associated Press that officials came to his establishment demanding that he replace the pirated software previously used. The owner claims that the new regulations had “dramatically” increased his business costs, but that the operating system was praised for having improved performance.

                China has the largest concentration of internet users, pegged at 253 million.

                “It makes sense for internet cafés are to use [Red Flag] because of their high user traffic and the system’s safeguards against viruses, “ said Fan Hongguan, a spokesman for Red Flag.

                The company’s About Us section reads, “ With the continuous progress of computer and network technologies, the productivity has reached a new level. The birth of Linux has further triggered a revolution of open source and freedom. Today, Red Flag Software Co., Ltd. (Red Flag Software), the largest and most rapidly developed Linux vendor in China, is emerging as part of the leading force of this revolution. By providing high quality Linux related products and services, Red Flag Software brings a new computing experience to customers, helps enterprise to stay ahead of the competition, and transforms the Linux technologies and the spirit of open source into the business value of customers.

                Since its founding on June 2000, Red Flag Software is growing rapidly and firmly to be the largest Linux company in China with more than 150 employees. Under headquarter located in Beijing, there are two subsidiaries in Guangzhou and Shanghai, and well-established sales channels and service networks are deployed nationwide. The product line includes high-end Linux server OS, cluster system, desktop OS, embedded system, technical support services and trainings. Red Flag Linux has been adopted by plenty of industries, including government, China post, education, telecommunication, finance, insurance, transport, power, logistics, media, manufacture, etc.”

7Spins to Launch Four New Games

by Hillary LaClair, Senior Editor
December 2, 2008

                Online casino operator 7Spins has announced the addition of four new games, including Electronic Roulette, Baccarat and video slots “Tea Garden and “Grand Tour”. The games are still in the development stages, and are scheduled for release in upcoming months. With high resolution graphics are the key selling points, 7Spins promises to deliver a real casino gaming experience.

                “We are pleased to announce the production of these great new games and are sure gamblers will be delightful to play them as soon as they will be released. It’s a fascinating phase for us to deliver these unique games to all players. We’re bringing something new something, something that captures people imagination and I’m glad we’re breaking industry’s limits so often,” said Peter Huxley, Operation Manager for 7Spins.

                With the addition of Electronic Roulette, players will enjoy a lifelike experience similar to that of a land casino. Players will begin the game choosing chips between $1 and $100, followed by the number combinations they wish to wager on. Baccarat will be offered in classic format with an “elegant table interface.”

                The “Tea Garden” game will be a five-reel, 25-payline video slot with ancient and modern Japan as its theme. The ‘wild’ symbol will be represented by a Samurai, and the ‘scatter’ symbol by a dragon. A bonus game will be triggered when three or more dragons appear, which will qualify the player for up to ten free spins.

                “Grand Tour” will be a five-reel, 15-payline video slot allowing the player to circumnavigate the globe, with a game for nearly every country. The game features national flags and coins.

                “At 7Spins Casino, we pride ourselves in having some of the best customer service in the industry. But this is the moment I must say we top every video slot machine in the industry with our unique games and style,” Huxley continued.

                7Spins offers a variety of casino games – 19 classic slots games, 21 progressive slots, 5 table games, 4 video poker games and Keno. Other video slots offered include Black Diamond 25-payline, Fantacy Nuts 25-payline, Glamour 9-payline, Lucky Number 20-payline, Morpheus Dream 15-payling, Ocean Fantasy 25-payline, Shia Safavids Treasure 20-payline, Slotsctuctor 25-payline and Treasures of Pharaohs 15-payline.

                7Spins is self-owned and operated under the jurisdiction of Costa Rica. They offer a VIP Club with master gamer services, 100% match bonus of the first 5 deposits of $100 and a $7 free no-deposit bonus. Players from all countries are welcome.

Techdirt Criticizes AGA’s Stance on Internet Gambling

by Hillary LaClair, Senior Editor
December 1, 2008

                Online casino gambling has become a subject of great interest in the U.S. following the recent reintroduction of the UIGEA. This week a popular US publication Techdirt responded to the topic of online gambling, calling the American Gaming Association’s support for a study of its regulation “about as wishy-washy as could be”

                Entitles ‘Gaming Giants Can’t Make Up their Minds,’ the editorial discussed the varying opinions on internet gambling among members of the AGA. The piece showed said that while some are in support of internet gambling, some wish to leave it’s regulation to individual states and Tribes, and others don’t want it at all.

                The latest action that the AGA has support in way of online casinos is to review the various legislative proposals in its favor. Techdirt has commented that its stand to conduct a study on the regulation of internet gambling “…sounds about as wishy-washy as could be.”

                The editorial notes that the issues surrounding the legality of internet gambling in the US quite specific. Efforts on the end of the US government to reduce internet gambling may have shown some efficacy, but that they have driven US punters and casino users into the arms of unregulated overseas gambling firms, forcing them to utilize unsavory services to fund such recreation.

                “The result is that gamblers keep up the same activity they were doing before, but are now exposed to more danger and risk, while US authorities are missing out on the chance to collect some taxes. This still seems pretty irresponsible, since gaming regulators in mature markets would argue that driving consumers into unregulated territory where they’re not protected by laws and rules governing casinos isn’t a great idea,” the article reads

                "Meanwhile, the AGA’s waffling isn’t a surprise, since many of its members hate to see new competition in any form. But existing casino operators are, arguably, better placed than anyone to compete in new, highly regulated markets that don’t require huge capital outlays on the scale of expensive new properties. Also, it’s hard to understand how more competition for gambling dollars could hurt consumers, when competition might actually deliver them a number of significant benefits, particularly over gray-market services of questionable legality."

                The AGA conducts an annual survey of casino activity, running for 10 consecutive years, dubbed State of the States: The AGA Survey of Casino Entertainment. Included in these reports are details of the national and state-by-state economic impact of commercial casinos, along with data examining the continued growth of the industry.

                The survey provides details as to the amount of casino visitation, a profile of the American casino gambler, and polled data showing the acceptance of casinos – which remains high. The 2008 State of the States survey featured a special section that reported the levels of capital investment in overseas casinos.

Problem Gambling Clinic Opens in UK

by Hillary LaClair, Senior Editor

                More vehicles for aid with problem gambling have opened up in the industry, as UK National Health took the initiative to provide advice and treatment for problem gamers. A clinic has been opened in Soho, west London, where gambling addicts may turn for help.

                The clinic will undergo a 12 month trial period, but has already attracted a great deal of attention. Among the employees will be psychiatrists, psychologists, family therapists, debt management experts from the Citizens Advice Bureau and others.

                Lead consultant psychiatrist Dr. Henrietta Bowden-Jones commented, “We have developed a unique treatment package to address specific difficulties that are common to problem gamblers. Due to the nature of their addition, gamblers’ finances are often in bad shape so an important part of treatment is to tackle debt management and employment issues. We also address the needs of clients’ partners and family members who have been affected by their gambling disorder and any coexisting mental health conditions such as depression.”

                Since the question of internet casino gambling’s relation to gaming addictions has arisen, there have been several studies to show the percentage of problems gambling in the UK. The British Gambling Prevalence Survey of 2007, instituted by the UK Gambling Commission, shows that 0.6 percent of the adult population of the British Isles were associated with problem gambling. This is nearly the same number as last year. According to the study, men are more susceptible to problem gambling than women, at younger ages.

                The highest rates of problem gambling were found in people who participate in spread betting at 14.7 percent, followed by fixed odds betting terminals at 11.2 percent and betting exchanges at 9.8 percent.

                To dispel the idea that internet casino gambling makes for the majority of gaming problems, studies in 2007 that included internet gamblers for the first time showed that only 6 percent of the British population gambled on the internet, and that 6 percent of that population had a gambling addiction.

                In actuality, the British National Lottery Draw was the most popular form of gambling, making up 57 percent of the gambling population, however this number decreased 65 percent from a 1999 study.

                Scratch cards were the second most popular form of betting, with 20 percent of people buying them, followed by 17 percent of horse race bettors and 14 percent of slot machine users.

                What’s most disturbing to the public, is that the opening of this clinic is the first in history funded by the government, while online gambling websites and land casinos donate much of their profits to problem gambling research.

                A clinical psychologist, Dr. Janet Brotchie said, “Gambling can eggect anyone and we’ve been taken by the diversity of the clients enrolled. They are from a range of ethnic groups and all backrounds.”

                She continues to say, “The evidence for effective treatment in gambling is limited. But we will be evaluating everything we do. Our job as a one year pilot is to look at the effectiveness of the treatment approach in the UK.”

Microgaming’s Exit Good for Other Software Providers?

by Hillary LaClair, Senior Editor

                 Following the Kentucky domain seizure, Microgaming has made a major decision in pulling its online casinos from the U.S. market altogether. The decision to exit the U.S. has sent shockwaves through the industry, and some believe it is a political ploy by the company. While this is disheartening for many U.S. players, Real Time Gaming and Vegas Technologies expect to gain a great deal of customers.

                Real Time Gaming powers such popular online casinos as Cherry Red and Rushmore Casino, while Vegas Technologies powers Online Vegas and Golden Casino among others. Because casinos that use Microgaming will no longer accept U.S. wagers, the American market will have to move somewhere.

                The Kentucky ruling had only made the stipulation that the 141 internet gambling domains block Kentucky residents. Microgaming initially blocked the several U.S. states that have criminalized gambling, but have made the final decision in exiting the whole market.

                “With this new administration coming into power in the U.S., the online gambling issue will be one that will be reviewed. The likely scenario is that current laws are changed to include legislation to regulate the online gambling industry. Microgaming might feel that by pacifying the U.S. today, they will position themselves for licensing in the future,” commented Bradley Strench, an internet gaming analyst from the United Kingdom.

                Real Time Gaming and Vegas Technologies have not said one way or the other whether they will follow in exiting the U.S., but they stand to benefit a great deal from the loss of Microgaming.

                “I think that other software companies can really take advantage of this situation. The customers are there, it is just a matter of how much these companies want to push the envelope in America,” Strench continued.

                Another online gaming consultant, Brian Avelent commented, “With everything going on in America right now, any company who takes the stance of continuing to accept new U.S. customers could have it pay off in a big way. The government is in transition and the new regime will be focused on reform, not conviction.”

                Microgamin has won several awards over the years, including Best Software Supplier by Casino Player Magazine in 2001, Best System Provider by Gaming Express Magazine and Gambling Online Magazine’s Players Choice Award in 2002, Gambling Online Magazine’s Top Casino Software Award in 2003 and Gambling Online Magazine’s Top Casino Software and Editors Pick Awards in 2006.

                Up until its decision to leave, Microgaming was home to thousands of U.S. players. Online casino operators such as the Carmen Media Group, Fortune Lounge Group, Ladbrokes, 32Red, Fairground Gaming, Vegas Partner Lounge and Golden Star Lounge are among the many who use Microgaming software.

                Robert Foote, the lead attorney representing Kentucky in the domain seizure case cited Microgaming on more than one occasion, and this could be the reason for its exit.

“He has it out for Microgaming,” said Joe Brennan Jr. of iMEGA. “Nobody seems to know why they keep bringing them up.”

Casinos Must Appeal to a Younger Audience

by Hillary LaClair, Senior Editor

                Casino owners everywhere have gathered to discuss the future of slot machines, and what they can do to continue its survival in the industry. With online casinos gaining more popularity over land establishments, operators have come together to determine how to attract younger customers.

                This was the subject of many conference panels at this year’s Global Gaming Expo. According to Casino City Times, “The Big Four – International Game Technology, Bally Technologies, Aristocrat Technologies and WMS Gaming – showed off more breakthroughs to interest younger players while still appealing to their core audience of over-65 gamblers.”

                “You’re talking about a demographic that’s dying,” said Al Thomas, executive director of research and development for WMS Gaming.

                Over the next years, casinos will offer slot machines to its customers that use server-based technology, very similar to online casinos, that will enable managers and gamers to select games to download on a machine.  This is probably the best means of competing with online casinos, allowing a younger audience to access a variety of slots games and other services usually not available to them at the casino.

            IGT introduced a slot machine with a library of over twelve games. Customers can switch slot games in nearly 20 seconds. The machines will also offer customers coupons and random tournaments, as well as the ability to order cocktails and make show reservations.

            The company has also released a series of movie themed slot games to appeal to their younger demographic. Customers can enjoy a “Jaws” and “Sopranos” slots game, as well as advanced version of classic video game favorite, Pong. IGT has released a “Star Wars” games, and WMS showed a “Star Trek” themed game at the gaming expo.