Two leading online poker and casino firms, PartyGaming and 888 Holdings,
have held talks about a £1.6bn merger as the industry scrambles to replace
revenues lost through the United States' crackdown on internet gambling. The
online gambling industry has been devastated by legislation passed in
Washington this month preventing banks and credit card firms processing
payments for bets. Analysts reckon PartyGaming earned between 75% and 80% of
its revenues from the US. The ban caused shares across the sector to
collapse. PartyGaming, which has dropped out of the FTSE 100, has made no
secret of its plans to seek a deal with rivals to bolster its business. The
firm cancelled its dividend shortly after the US ban and said at the time it
hoped to take advantage of slumping share prices. Its chief executive, Mitch
Garber, said in a recent interview consolidation was the "most sensible way
forward" and told analysts he was in talks with several companies. The Stock
Exchange might force a statement today. The desperate state of the industry
has led to a frenzied round of talks among leading players. 888 was forced
to put out a statement recently denying it was behind a bid for another UK
listed firm. "I don't think it will come as a great surprise to learn that
all parts of the industry are talking to each other," said one industry
source. "How concrete those discussions are is another thing. Consolidation
is absolutely on the cards. But I think we might see companies waiting to
see how things pan out a little. Companies need to sort out their cost
bases, for example." Discussions between PartyGaming and 888 are said to be
at an early stage. The firms at least don't have far to go: they occupy the
same office block in Gibraltar. A source close to 888 said they had not
progressed further than "a coffee and a chat". Another industry source said
PartyGaming was also pursuing other options, but an 888 tie-up would have
obvious benefits. "Casino and poker are the mainstay of both businesses," he
said. The US accounted for a little over 50% of 888 revenues, with the
remainder largely from Britain and other parts of Europe. It still has
around $100m (£53m) cash, even after it pays a planned special dividend. But
its shares have also fallen sharply and the company has dropped out of the
FTSE 250.

Online gambling firms are under pressure. The sudden disappearance of a
large number of players makes online gaming less attractive to customers
both because there are fewer people to play against and the companies are
not able to offer the same kinds of jackpots.

Neither PartyGaming nor 888 would comment on the merger discussions.

Culture secretary Tessa Jowell yesterday called for an international
agreement on the regulation of online gaming, before an international summit
at Royal Ascot. Delegates from 30 countries, not including the US, will meet
tomorrow to discuss methods for protecting vulnerable people and keeping the
industry free of crime. Ms Jowell said companies would be welcome to operate
in Britain but only after agreeing to a "very tough" code on social
responsibility.

At its peak, PartyGaming was valued at £7bn on the London Stock Exchange.
Despite 33 pages of warnings in its float prospectus, including over a
possible ban in the US, investors piled in and the directors cashed in more
than £1bn. London became the centre for the industry to raise money. Since
the US ban PartyGaming shares have dropped by 70% to 30p and 888 shares have
declined 24% to 108p.

The introduction of the Gambling Act three years ago has had little impact
on decreasing pokie machines in some regions in New Zealand and it's
obviously not working well, says a gambling lobby group. Gambling Watch
coordinator David Macpherson said all New Zealand regions had shown a drop
in machines in the last three years with a nationwide decrease of 10.1 per
cent, but some regions were well below the average. Southland and Waikato
both had a reduction of less than 4 per cent. "Some localities within those
regions have actually recorded significant increases in pokies," Mr
Macpherson said. "It is obvious that the stated aim of the Act, to control
the growth of gambling and to prevent and minimise harm caused by it, is not
working particularly well in some areas." However, in other regions
community concern about the harmful effects of pokie machines was having an
impact with numbers decreasing about 15 per cent, he said. "We are pleased
that some regions of high pokie concentration, such as the West Coast and
Northland, are showing decreases significantly ahead of the national
average." Pokie machines are cited by almost 90 per cent of people treated
for gambling addiction as the primary cause of their problem.

West Coast Region -15.2
Otago Region -5.8
Waikato Region -3.9
Canterbury Region -8.5
Hawkes Bay Region -7.2
Marlborough Region -13.4
Bay of Plenty Region -5.0
Manawatu-Wanganui Region -8.9
Southland Region -3.7
Taranaki Region -10.1
Northland Region -14.4
New Zealand -10.1
Tasman/Nelson Region -9.4
Gisborne Region -8.2
Wellington Region -8.3
Auckland Region -8.2

A NEW system of licensing for premises that are involved in gambling is to
come into force in the UK, and local authorities, including Alnwick District
Council, will be at the heart of the changes. The Gambling Act 2005 is
taking the licensing and regulation function away from the magistrates'
courts and transferring it to local authorities, placing new and extended
legal responsibilities on councillors and council officers. The new
licensing responsibilities will not come into force until April 30, 2007 but
in preparation for this new duty, the district council is consulting with
the public on how it proposes to apply these new powers. The Statement of
Principles, which is the draft gambling polic,y is available on the
council's
website or can be posted out to anyone interested. The council welcomes
comments and feedback on the draft which will be finalised before the end of
the year. Members and officers concerned in the decision making process will
undergo training so they are fully aware of the facts and procedures to
ensure the authority provides an efficient service.

UK culture secretary Tessa Jowell will this week urge 32 nations to back a
code of principles on internet gambling, the first major international
measure to regulate the industry as the US imposes a ban. Britain, France,
Germany, Spain, Italy, South Africa and other nations will tomorrow meet
outside London for talks hosted by Jowell to agree on a code of conduct for
companies that offer gambling over the Web.Delegates will discuss age and
identification verification systems, including the role of government in
smoothing access to high quality data for gambling operators to identify
customers. They will also look at social responsibility associated with
remote gambling, including the role of government and whether operators
should be required to fund awareness campaigns on problem gambling or offer
website links to counselling. Delegates from each nation will be asked to
examine whether there are any legal or ethical considerations around cross-
jurisdiction treatment of problem gambling. A draft of the agreement
proposed that nations should agree to "co-operate in development of and
share best practice in protecting children and vulnerable people" and to
"share findings of research into the remote gambling market". The measures
are Britain's attempt to regulate internet gambling instead of criminalising
it as US President George W Bush favours. Bush this month signed a law
banning credit card companies from collecting payments for online bets.
Jowell last week criticised the US for attempting to impose a "new
prohibition" against online gaming, saying Bush's measures would prompt
fraud and crime by forcing the industry to work illegally from nations that
do not regulate the Web.

"America should have learned the lessons of prohibition," Jowell told the
Financial Times, adding that the US might "create modern day speakeasies" in
the internet gambling industry.

The world's biggest internet gambling companies lost $7 billion (R52
billion) of market value in a day after the US congress passed legislation
on September 30.

PartyGaming shares have lost three quarters of their value since then.

The EU is pushing countries to scrap measures that protect domestic
companies in gaming.

On October 12, regulators told members such as France and Austria to stop
discriminating against international bookmakers and casinos.

NEWLY appointed Criminal Investigation Department director Datuk Christopher
Wan Soo Kee has vowed to come down hard on gambling syndicates.
Wan said he would suggest to the local authorities to stop issuing new video
arcade licenses to check on illegal gambling problems. "I plan to make this
my priority. I know many video game operators have been modifying their
machines for gambling purposes. " He was speaking after handing over his
duties as State police chief to Datuk Koh Hong Sun. Wan takes over from
Datuk Fauzi Shaari as national CID director and he begins his duties on
Wednesday. He is the highest-ranking non-Malay police officer in the country
now and his appointment also marks the first time a Chinese has assumed the
post. Wan, 55, was formerly with the Special Branch in Bukit Aman and
Malacca police chief before coming to Penang. He said he would use his
experience from his stints as the Malacca and Penang police chief to come up
with crime prevention initiatives for implementation nationwide.

Gambling -- most of it illegal -- has increasingly been thriving in Laredo,
Texas, reported the San Antonio Express-News. Under Texas law, game rooms
that feature machines known as eight-liners can award only up to $5 in
prizes. But many places in Laredo offer up cash prizes of $40 or more. The
Express-News reported that there are 2,423 licensed eight-liner machines in
Laredo. That's one for every 43 Laredo residents over 21. Although police
have reportedly admitted that most places dole out cash prizes,
investigations into the matter have been slowed by a lack of interest or
complaints from city residents. Also, there has been little political
pressure to step up the efforts, the newspaper said. The increase in illegal
gambling is making it harder for law-abiding game rooms. Operators of such
game rooms have complained of the slow investigation efforts.

Some would agree that certain types of gambling activities on Guam is part
of the local culture. Also, during village fiestas gambling activities are
allowed, but has to go through an approval process, just like this weekend's
Sinajana fiesta. But what some may find sort of ironic is that the
vice-mayor of the central island village is part of the group that is in
opposition of Proposal "B", the initiative to allow the use of slot machines
at the Guam Greyhound Raceway Park. The Municipal Planning Council granted
approval for Sinajana to set up certain types of gambling activities,
cockfighting and card games during this weekend's fiesta. But what may be
viewed as ironic is that the village Vice-Mayor Robert Hoffman is also a
member of a group that is in opposition of Prop "B", the initiative that
allows slot machines. "I can understand why it would seem it's almost
ironic," he admitted. "The difference is that the proposal and the gambling
that exists here? There are so many different factors. The ones who are
running it here are Sinajana people. "I had a great big debate with the
Municipal Planning Council to understand this side and that side and saying
that difference is 'this one is a weekend, a few hours', like a family get
together and decided to sit down and play cards, gambling, we'll sit down
and play 21. I know that there is an entertainment portion of it and
gambling side to it, but my biggest objection to Prop "B" is the way its
written, so many unanswered things." Sinajana mayor Roque Blas confirmed
that he doesn't support Prop "B". But if Hoffmann and Blas are against the
initiative, and since they are sort of in a position of village authority
with what takes place in Sinajana, wouldn't they have some say of what may
or may not take place in the village? "Can we say no? We have a Municipal
Planning Council that does that," Hoffmann said. "We meet with them
regularly and it's them who really decide that. It's not just a council made
up of Catholics, or people who are pro or anti anything so it really gives
us a really broad objective view."

Mayor Blas added, "It's a little bit beyond my control. Because this has
always been one of the culture things that eventually, I guess, if it ever
comes to an initiative then it can stop."

While Hofmann and Blas feel that gambling activities during fiestas and
Proposal "B" are completely different animals, both venues are expected to
benefit the community. Said the mayor, "We take some of that and we give it
towards the kids to even host their games and even towards their uniforms
for any kind of sports activities that they get involved into which takes
some of that cost off of our government coffers because our funding is very
limited right now."

Bar owners heard the message over and over at recent liquor license renewal
hearings: Gambling violations will not be tolerated by members of the St.
Joseph County board of the state Alcohol and Tobacco Commission. Neither
will multiple violations. The local board did not deny any permit renewals
Wednesday, but board President Mike Pajakowski and Secretary Curtis Woolley
issued stern warnings. A laundry list of violations, including ones for a
gambling machine and other gambling materials, brought Grant Jones of
Moondog's Pub North, 1516 N. Ironwood Drive, before the board. Woolley told
Grant that a list of violations like those before him makes him wonder if
the bar is operated like the "Wild West." "It's a slap in the face to all
the establishments who abide by the laws and to the board members who
granted you the privilege" of being able to do business, Woolley said. Jones
assured the board there is no more gambling equipment or violations. "We
learned our lesson the first time." Pajakowski said if there were any other
violations, the bar's alcohol permit could be in jeopardy of not being
renewed. An officer in the corporation that owns Jeannie's tavern, 621 S.
Bendix Ave., had to explain to the board why his club lost three gambling
machines and $400 that was seized in November by excise police. Don Larson,
one of the bar's owners, said without the extra revenue, it is harder to
make ends meet at the bar.
The board also admonished Carl Blount of Clay Pub, 52170 Indiana 933, for
failing to attend an earlier hearing to respond to a violation for having
pull tabs, an illegal gambling activity.As Blount was laughing off the
situation, Pajakowski told him sternly to "pay attention." Blount's license
expired Oct. 19 so he was told he would need to get a letter of extension
from the state to purchase alcohol from his supplier. D.L. Austin of Starz
bar, 1505 S. Kendall St., won his license renewal after a two-month delay.

His prior violations included one for an unplugged gambling machine he had
purchased as a present for his mother's 75th birthday and stored in the bar.
She came to the board and verified that Wednesday.After Pajakowski warned
its owner about a gambling violation, the board renewed the liquor license
for MB's Sports Bar & Lounge, 1004 Roosevelt Road, Walkerton.

The liquor license of the American Legion Post 284 at 23571 Grant Road, was
renewed by the board after being remanded from the state commission.

The local board had turned down the renewal when no one from the post
appeared for two hearings required because of a gambling violation.

The polished slot machines fill the room with light and noise: a constant
click-and-whirl as customers press buttons and pull levers, and bells
ringing for winners.
The sound of money carries an almost deafening pitch. "It sticks in your
head if you play here enough," said Tara Kelley, 26, smoking a cigarette
outside Hollywood Slots on Main Street. "I think it's a great sound. Being
here is like being in a different world." One year after Hollywood Slots
opened on Main Street, and three years after state voters approved slot
machines at the commercial harness-racing track, Maine's only slots parlor
is thriving. The property, owned by Penn National Gaming, has netted more
revenue ­ $32 million and counting ­ than analysts, state and city officials
expected. The anticipated rise in police and social service demands have not
materialized. And funding from the slots has given Maine's harness-racing
industry new life. "There really have not been any glitches or drawbacks,"
said Jon Johnson, the general manager who transferred from a casino in
Mississippi. That message of success has a lot riding on it. The political
future of gambling expansion in Maine could very well hinge on Hollywood
Slots, and the permanent facility the Pennsylvania-based company will begin
building next spring. That $90 million project, across the street from the
Bangor Raceway, will be licensed for up to 1,500 slots, three times the
number in the temporary facility operating today.
In 2003, state voters rejected a proposed casino that would have been run by
the Passamaquoddy Tribe and Penobscot Indian Nation in Sanford, but they
authorized "racinos," or slot machines at harness tracks. Gambling promoters
are circulating petitions for citizen initiatives that allow a tribal-run
racino in Washington County and a casino in Oxford County, while gambling
opponents are trying to ban slot machines in Maine.

To gambling opponents, what Hollywood Slots calls success is just an
illusion.

"They can only win when Mainers lose," said Doug Muir of Kittery, spokesman
for No Slots For ME, a political action committee behind the drive to ban
slot machines in Maine. "This is a form of gambling that is too addictive,
it's too risky and it's too costly," Muir said.

A number of studies show slots lead to gambling addiction faster than other
forms of gambling, Muir said. Slots are also connected to higher rates of
suicide, crime and other social costs, he said. In terms of the economy,
Muir said gaming takes money from other sectors, creating a net loss of
jobs.
"There is no product made here," Muir said. "It is just a transfer of money
from citizens' pockets into their pockets."

From the outside, Hollywood Slots still looks like the buffet restaurant it
once was.

Then customers walk into the sparkling lobby, replete with four ATM machines
and a security checkpoint. The interior is dressed up with movie
memorabilia. There is the sledgehammer wielded by Kathy Bates in "Misery,"
and the cape Robert DeNiro wore in "Frankenstein."
Penn National spent $17 million to create two floors of slot machines, a
small restaurant and merchandise shop.
"Our guests are learning which machines they enjoy," said company
spokeswoman Amy Kenney, during a recent tour.
There is usually a line at the door before it opens at 10 a.m. Next week the
business is changing its hours. It will be open from 9 a.m. to 1 a.m.,
instead of 10 a.m. to 2 a.m.

"We don't want to have people lining up out there in the winter," Kenney
said.
On a gray Thursday morning last week, Hollywood Slots was the only busy
place on Main Street. A few hundred cars were parked outside, and by 4 p.m.
the lot was nearly full. Johnson said the average daily attendance is about
2,500, and has topped 5,000. Except for a run of summer tourists, nearly all
of the players are from Maine.

"It's fun, it's easy, all you do is push the button," said Brenda Radley,
24. Instead of coins, the machines pay out paper ticker tape that players
redeem for cash.
Radley and her father drive up once or twice a week from Rockland, about an
hour and a half away. Bill Radley, 63, has gambled in New Jersey,
Connecticut, Nevada and other spots. He would like to see a full casino with
table games in Bangor.

"It's good entertainment, whether you win or lose," said Radley, who used to
work in the bottle redemption business.
Father and daughter usually gamble $20 or $40 apiece, and they don't expect
to walk away as winners. For Brenda Radley, it's not just about the slots.
"Back when he was doing bottle redemption, working seven days a week, we
never had anytime to spend with him," she said. "This is time we can spend
together."
Bill Radley thinks casinos are good for the economy. That's a familiar
sentiment here, where the past is inescapable. From the Hollywood Slots
parking lot you can see the 31-foot statue of folkloric lumberjack Paul
Bunyan, a tribute to the city's days as a lumber capital.

"We need something in this state," Bill Radley said.

Across the street, drinking a beer at Raena's Pub, Shawn Brad is skeptical.
"If it could stay like this, it's enjoyable to a certain extent, it's mostly
old people," Brad said. "But you know it can't."
If the door is opened to full-scale casino gaming, Brad expects drug use,
crime and social deterioration will follow.
Bartender Maria Dorso said she can only judge based on what she has seen so
far: "For the most part they've been a really good neighbor." Police Chief
Don Winslow said the department was called to the property about 75 times
since it opened, mostly to deal with minor accidents in the parking lot, and
the occasional drunken patron.

"I have been in this industry for 30 years, I have never seen the crime and
the problems that people talk about, and I have worked everywhere," said
Johnson, the general manager.

Johnson said his staff is up front with guests about what they can expect
from the experience at Hollywood Slots. They post information for guests who
feel they might have a gambling problem. The state Gambling Control Board
has created a new counseling service, which should start up next year.
"What I always tell them, we pay back 93 percent of the money wagered, which
means that, yes, there is a portion that we keep," Johnson said. "Casinos
are not here because everybody wins. This is really entertainment."

The profile of the average player is a middle- or upper-middle-class woman
who is over 50 years old, Johnson said.
But several players disputed that claim last week.

"A lot of the people who play don't really have the money to be here," said
Tara Kelley, a native of Brewer. "They find money wherever they can, and
they stay here as long as they can."

Net revenues have climbed steadily, from around $2 million last November to
$3.45 million in September.
The money flow works like this: Players have bet about $470 million since
the opening. About $440 million of that has gone back to players. One
percent of the gross, or about $4.7 million so far, has gone to the state
General Fund.

The remaining $26 million or so was net revenue. The company gets 61 percent
of that, and the state disperses 39 percent to various funds. "It is smooth
with a capital 'S,'" said Robert Welch, executive director of the State
Gambling Control Board. The agency reviews financial records, and Welch has
conversations almost daily with Johnson and other managers.

"We have inspectors on the floor seven days a week. This really could be a
battle, and it isn't," Welch said.
Slots revenues have generated more than $4.5 million directly for the
harness racing industry, along with indirect help.
"The horsemen have been the primary beneficiaries," said Fred Nichols,
director of racing at Bangor Raceway and Off Track Betting.
For the season that runs through Nov. 5, purses at this raceway totaled $1.2
million, more than double the $524,600 from last year. There were 44 race
dates this year, 28 last year, Nichols said. Average daily attendance was up
slightly.

How long that prosperity will last, though, remains to be seen. There is the
potential for a ballot question seeking a slots ban, and other
uncertainties.
The five-member state Gambling Control Board has issued a nonbinding
moratorium on any new facilities. The ban does not have any practical
effect, but simply represents the majority opinion of the board.

Board Chairman George McHale of Orrington said Hollywood Slots appears to be
running smoothly now, but more time is needed to evaluate the full impact.

Criticism against state Issue 3 could easily be compiled a la Elizabeth
Barrett Browning. "Let me count the ways ." While proponents dub Issue 3
"Learn & Earn" for its wondrous tuition-generating effect, opponents say
this proposal to allow 31,500 slot machines statewide is a smokescreen that
would make a handful of private racetrack owners and developers very, very
rich. Also, some of the numbers are in dispute. While supporters, for
example, say the measure would yield some $850 million each year for Ohio
college students, the state's own budget and management office estimates
that the annual ca-ching! of slot machines would generate not quite $325
million for tuition. Then, too, there's criticism bubbling up from Columbus,
from folks who say Issue 3 is disproportionately nice to Cleveland - where,
with voter OK later, slot machine operations could blossom into full-scale
gaming tables. Oh, and let's not overlook the much ballyhooed social costs.
You know, "the evils of gambling" and all that - no small consideration, as
I see it. Besides, any time our vote would authorize a new state commission
with the word "integrity" embedded in its name (as in, "Gaming Integrity
Commission"), well, I'm thinking maybe the joke would be on us. We could
keep taking inventory of specific objections to Issue 3, but that skips over
what to my mind is one of the weirder aspects of Learn & Earn, namely: How
long do people have to sit around drinking at some bar before they can
convince themselves that slot-machine gambling equals the future of Ohio
college students? Are we not in The Twilight Zone when we think it makes
any sense whatsoever to use higher education as a pitch for voters to
approve gambling? I try and try to envision how this came about, but all I
can conjure up are conversations between Rod Serling and his doppelganger.
"Man, I sure would like to see Ohio get a slice of those gambling dollars,
Rod!"

"Boy, Rod, so would I! Wonder how we can do it?"

"Hey, Rod, I've got it! Let's make slot machines a constitutional amendment!
But, gosh, how could can we sell it to voters?"

"Oooh, oooh, I know! We'll tell 'em it's 'for the children' - that one works
every time, Rod!"

The premise of Issue 3 is so absurdly specious that, were I the bartender on
the night Rod & Himself stopped in, I'd have cut them off long before they
reached that conclusion.

Alas, no one did.

If you go to the Issue 3 proponents' Web site and read "About Ohio Learn &
Earn," you have to plod through five whole paragraphs and 137 words before
reaching that section's first mention of slot machines.

It's true that Ohio gets an "F" for college affordability.

Getting in position to win a Nextel Cup Series championship hasn't been a
problem for Jimmie Johnson. Sealing the deal, on the other hand, that's a
whole other matter. Since coming into the series as a rookie in 2002,
Johnson has finished the season in the top five in the point standings every
year. Two times he finished series runner-up, including a scant eight points
behind Kurt Busch in the inaugural Chase for the Championship in 2004.
"Looking back at the past few seasons of the chase, we felt we maybe gambled
at the wrong time and tried to develop parts and pieces for the car and
set-ups at the wrong times," Johnson said. "This year I really think we
really stuck to a good plan and developed our stuff at the right time."
Johnson's team has the appearance of a fighter exploding out of the corner
after getting knocked down with a few left hooks in the first two rounds.
After a few bumps in the road early in The Chase, Johnson is back in
position to win a title, 41 points behind leader Matt Kenseth with four
races left, including Sunday's Bass Pro Shops 500 at Atlanta Motor Speedway.
"Obviously, with the slow start we had, I'm happy about it," Johnson said.
"We've been knocking on the door for a championship for five seasons, and
hopefully, this will be the year for us." Johnson will start Sunday's Bass
Pro Shops 500 in third place after rain washed out all of Friday's on-track
activity. The field will line up by points, putting Matt Kenseth and the
rest of The Chase field out front for Sunday's race. Today's on-track action
calls for two Nextel Cup practice sessions, the Crown Royal International
Race of Champions season finale, and the NASCAR Craftsman Truck Series Easy
Car Vehicle Service Contacts 200. The weather forecast for today is
favorable with partly cloudy skies and little chance of rain. Getting in
place to win a title hasn't come easy for Johnson, who entered The Chase in
second place. After damage dropped him to a 39th-place finish in New
Hampshire to start the Chase Johnson found himself in ninth place, well
below his accustomed position of no worse than third up until the start of
The Chase.

After a finish of 13th at Dover improved him to eighth, a chance for a big
points day vanished two weeks later at Talladega where last lap contact
between he, Dale Earnhardt Jr. and Hendrick Motorsports teammate Brian
Vickers sent Johnson to a finish of 24th.

Since then, the No. 48 team has caught fire similar to the early-season
fashion when it won two of the first three races to start the year. A finish
of second at Lowe's Motor Speedway followed by last week's win at
Martinsville moved Johnson up to third in the standings.

"The luck and the way things have gone have really made this an interesting
and crazy chase for all the competitors," Johnson said. "We made good
changes we're we need to be. We were let back into this deal in a weird way
and it's time to go."

At Lowe's, Johnson was beat to the finish line by Kasey Kahne. Kahne's
eighth in The Chase for the Championship, 99 points out of first place.
Before the Nextel Cup trophy is hoisted in Homestead, Kahne expects Johnson
to have a say in who the champion will be.

"He's right there. He can definitely come in and take away," Kahne said. "At
Charlotte we won just off of having a better racecar. He started out with
the lead after the final stop and I passed him and drove away."

Johnson getting back into the heat of The Chase couldn't come at a better
time for he and his team. He ranks fourth among active Nextel Cup drivers
with an average finish of 11.8 at AMS and won the Bass Pro Shops 400 two
years ago.

Atlanta's 1.54-mile quad-oval configuration is very similar to Lowe's Motor
Speedway and the next track on the schedule, Texas Motor Speedway. Johnson's
won five points races at Lowe's in addition to a pair of Nextel All-Star
Challenges.

I don't gamble online. I've seen too many of my friends get so addicted to
poker that they've got no time left for Internet porn. And I'm not going to
let that happen to me. But I didn't expect Congress to pass the Unlawful
Internet Gambling Enforcement Act, treating people who spend all day at
partypoker.com like criminals. Maybe I'm a traditionalist, but I think of
criminals as people who I can't beat up and who do math slower than I do. It
breaks my heart when the greed our nation is famous for gets trumped by the
religious posturing we were founded on. It's a horrible conundrum. Either we
give up the tax receipts on the US$6 billion that Americans spend gambling
online, or we let people do whatever they want with their own money. It's
like making Poland choose between scowling and yelling.
So we've decided to forfeit all that income -- almost enough to let us
invade a very small Middle Eastern country, or at least an emirate -- to
foreign governments. Within 10 years, all the world's great bridges to
nowhere will be on the Isle of Man. It's kind of sweet that our government
wants to protect us from ourselves. It's like it loves us. It has made it
clear that it wants us to stay away from drugs, gambling, prostitutes and
Janet Jackson, all of which it is right about. And I recognize that the
Internet is a particular danger because it makes sin too easy. How can our
economy grow when the machine you work on all day also lets you gamble, buy
OxyContin and watch porn? If moving your factory lever up built a car
engine, and moving it down let you see Little Egypt dance the
hootchy-kootchy, we'd be driving like Fred Flintstone. There's a great sense
of American optimism in all this lawmaking. Sure, prohibition didn't work,
and the drug laws have no effect, but, darn it, we really believe that we're
going to stop the 23 million Americans who waste their money gambling
online. The cutest part is that Congress doesn't see the irony in telling
people not to waste their money. But, of course, capitalism always sneaks
its way into morality. Because of strong lobbies, the new law makes an
exception, allowing Web sites for lotteries and horse racing. Because, as
anyone who's been to a 7-Eleven or an OTB place knows, it's online poker
that sets back the poor. Imagine the economic success Appalachia would be if
not for PlayBaccarat.com.

At a time when giving up free tax revenue seems particularly insane, the
Senate was smart enough to bury the new law in a bill aimed at enhancing
port security. Senators didn't see the irony of linking legislation that
takes away some of our freedoms with legislation about protecting our
remaining freedoms from terrorist attack.

Legislating vice never works, mostly because vice is a lot of fun. The laws
wind up being weakened by so many inconsistencies -- you can gamble on a
boat permanently docked a few feet off the riverbank as long as it pretends
to sail every 15 minutes; you can drink in public as long as it's covered by
a brown bag; you can't clone stem cells but you can clone Kelly LeBrock --
they make us lose respect for the law in general.

So, as more people gamble online, the government will eventually have to
find a way to back down without looking stupid. The obvious solution is to
borrow the Indian casino reparations idea and allow gambling sites to be run
by released Guantanamo Bay prisoners. Not only would the profits erase any
bad feelings, the former detainees would be great at running poker sites.
After all, four years of water-boarding is the perfect training for having
to listen to endless stories about bad beats.

Gamblers may look over their shoulder now, but experts say a new
Internet-gambling ban won't keep bettors from ponying up, just turn them on
to overseas payment services out of the law's reach. "It has put a terrible
scare into people," said I. Nelson Rose, who teaches gambling law at
Whittier Law School. "But it won't by any means wipe out Internet gambling."
The fright swept through the $12 billion industry on the heels of the recent
arrests of two gambling company executives and a new law President Bush
signed Oct. 13 that seeks to ban most online gambling and criminalizes funds
transfers. The law has wiped out billions of dollars in shareholder value of
British companies, leaving the industry's future in doubt as U.S. lawmakers
initially celebrated finding a way to halt bets coming from America. But
serious questions remain about whether the legislation can be effective in
stopping U.S. residents from playing poker or betting on sports.
The Unlawful Internet Gambling Enforcement Act goes after the money, not the
millions of players, which would be nearly impossible to enforce.
It will essentially try to choke off the way Americans fund their gambling
habits, hoping to prevent the transfer of dollars to the popular Internet
sites.
It's also widely understood that the law has online poker in its sights,
identifying it as a game of chance - something the poker companies dispute.
They believe poker is a game of skill and therefore not subject to the new
rules. But they're fearful nonetheless. "Their mission is to kill the
funding of online poker, and that's what this law does," said Mike Sexton,
who hosts the popular World Poker Tour and has won millions as a
professional player. 2,000 gambling sites
The new law comes amid an explosion in online gambling, fueled by the Texas
Hold 'em craze and widespread access to the Internet. In addition, dozens of
Web sites have sprouted up that allow gamblers with credit cards to bet on
any sport they choose, for any amount of money they want.

Industry experts say there are an estimated 2,000 Internet sites that take
bets for sports and poker. American players have fueled Internet gambling,
supplying $6 billion of the $12 billion in revenues generated annually.

"The time has been one of rapid growth," said Sebastian Sinclair, president
of Christiansen Capital Advisors, a gambling consultant. "This industry was
well on its way to becoming mainstream in a great part of the world. Capital
was tripping over itself to fund these companies."

The new law gives the U.S. Treasury and the Federal Reserve, along with the
attorney general, 270 days to establish policies and procedures.

"The regulations are clearly going to prevent banks from doing electronic
fund transfers to gambling sites, but that is no big deal," Rose said.
In some cases, banks simply move the money to payment processors, known as
e-wallets. Non-U.S. payment processors such as the widely used Neteller then
transfer the money to the Internet gambling sites.

The U.S. government has no authority over processors like Neteller that are
operating legally.
Anthony Cabot, a gambling lawyer in Las Vegas, thinks language used in the
bill provides a loophole for the payment processors and the U.S. banks that
want to do business with them.

"Unless you have some fairly draconian measures ... the likelihood of
stopping payment to them is small," Cabot said.

Offshore betting targeted
Much damage has already been done to the offshore sports-betting industry
without the looming regulations.
British BetOnSports PLC folded after its chief executive was arrested in
July by U.S. authorities. David Carruthers faces 22 counts of fraud and
racketeering charges and remains under house arrest in the St. Louis area.

London-based Sportingbet's chairman was detained last month in New York on a
state fugitive warrant charging him with illegal online gambling. He was
eventually freed.

Both arrests sounded serious alarm bells for those running sports wagering
sites that take American bets.

The new legislation has already had a dramatic effect. It supposedly
clarifies the 1961 Wire Act, explicitly outlawing Internet gambling,
including online poker.
It creates new criminal penalties that have rattled investors and
executives - although Rose said it doesn't expand the act, and there's no
indication the Justice Department is about to launch a huge campaign to
enforce the law.

Still, the biggest publicly traded names in Internet gambling on the London
Stock Exchange and AIM, the exchange's global market for growing companies,
could not afford to flout American law. When news broke earlier this month
that Congress has passed the bill, Internet-gambling companies traded on
those exchanges lost a combined $7 billion in market capitalization.

PartyGaming PLC, once the envy of online gambling with its more than $8
billion IPO in 2005, is now trying to figure out how to save its business
model. It runs what was once the world's biggest poker site, PartyPoker, and
has said it will no longer take payments from the U.S., eliminating nearly
80 percent of its revenue and sending its stock plunging.

Another poker company, 888 Holdings PLC, also said it would stop taking U.S.
bets, ensuring its profits will fall dramatically.
Sportingbet and Leisure & Gaming both sold their U.S. operations for a
dollar. Sportingbet said its exit from the U.S. market cost it nearly $400
million.

Gamblers may look over their shoulder now, but experts say a new
Internet-gambling ban won't keep bettors from ponying up, just turn them on
to overseas payment services out of the law's reach. "It has put a terrible
scare into people," said I. Nelson Rose, who teaches gambling law at
Whittier Law School. "But it won't by any means wipe out Internet gambling."
The fright swept through the $12 billion industry on the heels of the recent
arrests of two gambling company executives and a new law President Bush
signed Oct. 13 that seeks to ban most online gambling and criminalizes funds
transfers. The law has wiped out billions of dollars in shareholder value of
British companies, leaving the industry's future in doubt as U.S. lawmakers
initially celebrated finding a way to halt bets coming from America. But
serious questions remain about whether the legislation can be effective in
stopping U.S. residents from playing poker or betting on sports.
The Unlawful Internet Gambling Enforcement Act goes after the money, not the
millions of players, which would be nearly impossible to enforce.
It will essentially try to choke off the way Americans fund their gambling
habits, hoping to prevent the transfer of dollars to the popular Internet
sites.
It's also widely understood that the law has online poker in its sights,
identifying it as a game of chance - something the poker companies dispute.
They believe poker is a game of skill and therefore not subject to the new
rules. But they're fearful nonetheless. "Their mission is to kill the
funding of online poker, and that's what this law does," said Mike Sexton,
who hosts the popular World Poker Tour and has won millions as a
professional player. 2,000 gambling sites
The new law comes amid an explosion in online gambling, fueled by the Texas
Hold 'em craze and widespread access to the Internet. In addition, dozens of
Web sites have sprouted up that allow gamblers with credit cards to bet on
any sport they choose, for any amount of money they want.

Industry experts say there are an estimated 2,000 Internet sites that take
bets for sports and poker. American players have fueled Internet gambling,
supplying $6 billion of the $12 billion in revenues generated annually.

"The time has been one of rapid growth," said Sebastian Sinclair, president
of Christiansen Capital Advisors, a gambling consultant. "This industry was
well on its way to becoming mainstream in a great part of the world. Capital
was tripping over itself to fund these companies."

The new law gives the U.S. Treasury and the Federal Reserve, along with the
attorney general, 270 days to establish policies and procedures.

"The regulations are clearly going to prevent banks from doing electronic
fund transfers to gambling sites, but that is no big deal," Rose said.
In some cases, banks simply move the money to payment processors, known as
e-wallets. Non-U.S. payment processors such as the widely used Neteller then
transfer the money to the Internet gambling sites.

The U.S. government has no authority over processors like Neteller that are
operating legally.
Anthony Cabot, a gambling lawyer in Las Vegas, thinks language used in the
bill provides a loophole for the payment processors and the U.S. banks that
want to do business with them.

"Unless you have some fairly draconian measures ... the likelihood of
stopping payment to them is small," Cabot said.

Offshore betting targeted
Much damage has already been done to the offshore sports-betting industry
without the looming regulations.
British BetOnSports PLC folded after its chief executive was arrested in
July by U.S. authorities. David Carruthers faces 22 counts of fraud and
racketeering charges and remains under house arrest in the St. Louis area.

London-based Sportingbet's chairman was detained last month in New York on a
state fugitive warrant charging him with illegal online gambling. He was
eventually freed.

Both arrests sounded serious alarm bells for those running sports wagering
sites that take American bets.

The new legislation has already had a dramatic effect. It supposedly
clarifies the 1961 Wire Act, explicitly outlawing Internet gambling,
including online poker.
It creates new criminal penalties that have rattled investors and
executives - although Rose said it doesn't expand the act, and there's no
indication the Justice Department is about to launch a huge campaign to
enforce the law.

Still, the biggest publicly traded names in Internet gambling on the London
Stock Exchange and AIM, the exchange's global market for growing companies,
could not afford to flout American law. When news broke earlier this month
that Congress has passed the bill, Internet-gambling companies traded on
those exchanges lost a combined $7 billion in market capitalization.

PartyGaming PLC, once the envy of online gambling with its more than $8
billion IPO in 2005, is now trying to figure out how to save its business
model. It runs what was once the world's biggest poker site, PartyPoker, and
has said it will no longer take payments from the U.S., eliminating nearly
80 percent of its revenue and sending its stock plunging.

Another poker company, 888 Holdings PLC, also said it would stop taking U.S.
bets, ensuring its profits will fall dramatically.
Sportingbet and Leisure & Gaming both sold their U.S. operations for a
dollar. Sportingbet said its exit from the U.S. market cost it nearly $400
million.

Here in THE U.S., it's OK to bet on horses, play Lotto, gamble at Indian
casinos, wager in Atlantic City. And in Las Vegas, it's virtually a
patriotic duty to gamble. In all, you can legally bet in 46 of 50 states,
but not over the Internet. Online gambling is illegal. Although the online
side of the business, while still small, is booming, Las Vegas casinos have
hardly clamored for its legalization. That's partly because they figure that
whenever folks develop a taste for gambling, they will sooner or later look
to Vegas to satisfy their hunger. If the distinction between gambling online
and offline strikes you as hypocritical, you're not alone. In November 2004,
the World Trade Organization ruled that the United States was in violation
of international law by making it a crime for Americans to place bets with
online bookies parked offshore. Its court agreed with the tiny island nation
of Antigua that, with legal gambling so prevalent in the U.S., laws barring
gambling online with offshore casinos was protectionist and, therefore, a
violation of international treaties. Antigua's economy, because it depends
on Internet casinos, was unduly harmed.
Since then, the case has bogged down in post-judgment proceedings to
determine the extent of U.S. compliance with the ruling, which the U.S. can
still appeal.
Aggravating the situation, however, American officials have stepped up
enforcement of existing laws, and Congress passed legislation putting more
obstacles in the way of online bettors. This summer, federal and state
officials arrested two British executives, David Carruthers, chief executive
of BetonSports, and Peter Dicks, chairman of Sportingbet, when they touched
down in the U.S. to change planes. Although Carruthers' and Dicks'
businesses are lawful in their home countries, federal prosectors indicted
Carruthers and BetonSports for taking wagers from U.S. residents. Dicks'
gambling activities offended the sensibilities of Louisiana law.

Following the arrests, Congress passed the Unlawful Internet Gambling
Enforcement Act of 2006. Although the new law doesn't make Internet casinos
or bookies illegal (they already are), it bars banks and credit card
companies from facilitating the transfer of funds to online casinos.

The actions have prompted some online casinos to announce that they will no
longer accept bets from U.S. residents. Although there is some uncertainty
about how the new law will work or how easily it might be evaded, shares of
online casino companies, which are heavily dependent on U.S. wagers, dropped
by as much as 58% on the London Stock Exchange.

Because Congress hasn't moved to shut down other gambling opportunities in
the U.S., attacks on Internet gambling amount to little more than favoring
vice that enriches bookmakers at home.

Casinos in the U.S. traditionally have "fundamentally opposed" online
gambling, said Holly Thomsen, spokeswoman for the American Gaming Assn., the
casino industry's lobbying arm. Without "proper regulations," she asked, who
would protect the children or the "problem gamblers"?

In April, however, the industry group adopted a more neutral stance, saying
the issue deserves further study, which was perhaps not a coincidence,
because MGM Mirage and Harrah's, both members of the American Gaming Assn.,
now say they would like a piece of the action if it were legal.

Online gambling remains a tiny slice of the gaming pie. The gross wagers -
amount bet minus winnings - on legal gambling in the U.S. was $83.7 billion
in 2005, up $4.8 billion, or 6.1%, from 2004, according to Christiansen
Capital Advisors, which tracks the numbers. By contrast, online gambling's
gross revenue was $5.9 billion worldwide, just 7% of the U.S. total, despite
a 42.2% rise from the year before.

All told, the online gaming revenues were just 27% of those of Indian
casinos and one-quarter of those enjoyed by state lotteries. But, of course,
these amounts probably would explode if online betting in the U.S. were
legal and properly regulated. As it is, a 2005 survey commissioned by the
American Gaming Assn. revealed that 4% of Americans gamble online, but 38%
of them said they started last year, and 70% of them reported that they
began betting online in the last two years.

Given such growth, the online share of the gaming market probably will
increase unless law enforcement becomes more effective than anyone imagines.

U.S.-based casino companies have traditionally soft-pedaled their interest
in online gaming, it being illegal and all that. But at least some casinos
would rather participate than see the entire business outlawed.

The casinos say their interest in betting via modem is not because they fear
the competition. Many have wrongly predicted the demise of Las Vegas because
venues for legal gambling - riverboats, lotteries, Indian casinos - have
expanded, said Robert LaFleur, gaming analyst with Susquehanna Financial
Group. But over the years, the conventional wisdom has become "the more
gamblers, the merrier," because they'll wind up eventually in Las Vegas.
"Anything that creates more gamblers is good for brick-and-mortar casinos,"
said Dennis Forst, an analyst for Keybanc Capital Markets.

If online gambling is ever legalized here, the big casino companies would
get into the business and no doubt dominate it with their trusted brands and
their deep-pocketed marketing budgets. Would you rather make a bet with some
crew in the Caribbean, or with Caesars Palace, which you might also visit
from time to time? The American Gaming Assn. survey indicated that 67% of
online gamblers visited a casino in the last 12 months.

Here in THE U.S., it's OK to bet on horses, play Lotto, gamble at Indian
casinos, wager in Atlantic City. And in Las Vegas, it's virtually a
patriotic duty to gamble. In all, you can legally bet in 46 of 50 states,
but not over the Internet. Online gambling is illegal. Although the online
side of the business, while still small, is booming, Las Vegas casinos have
hardly clamored for its legalization. That's partly because they figure that
whenever folks develop a taste for gambling, they will sooner or later look
to Vegas to satisfy their hunger. If the distinction between gambling online
and offline strikes you as hypocritical, you're not alone. In November 2004,
the World Trade Organization ruled that the United States was in violation
of international law by making it a crime for Americans to place bets with
online bookies parked offshore. Its court agreed with the tiny island nation
of Antigua that, with legal gambling so prevalent in the U.S., laws barring
gambling online with offshore casinos was protectionist and, therefore, a
violation of international treaties. Antigua's economy, because it depends
on Internet casinos, was unduly harmed.
Since then, the case has bogged down in post-judgment proceedings to
determine the extent of U.S. compliance with the ruling, which the U.S. can
still appeal.
Aggravating the situation, however, American officials have stepped up
enforcement of existing laws, and Congress passed legislation putting more
obstacles in the way of online bettors. This summer, federal and state
officials arrested two British executives, David Carruthers, chief executive
of BetonSports, and Peter Dicks, chairman of Sportingbet, when they touched
down in the U.S. to change planes. Although Carruthers' and Dicks'
businesses are lawful in their home countries, federal prosectors indicted
Carruthers and BetonSports for taking wagers from U.S. residents. Dicks'
gambling activities offended the sensibilities of Louisiana law.

Following the arrests, Congress passed the Unlawful Internet Gambling
Enforcement Act of 2006. Although the new law doesn't make Internet casinos
or bookies illegal (they already are), it bars banks and credit card
companies from facilitating the transfer of funds to online casinos.

The actions have prompted some online casinos to announce that they will no
longer accept bets from U.S. residents. Although there is some uncertainty
about how the new law will work or how easily it might be evaded, shares of
online casino companies, which are heavily dependent on U.S. wagers, dropped
by as much as 58% on the London Stock Exchange.

Because Congress hasn't moved to shut down other gambling opportunities in
the U.S., attacks on Internet gambling amount to little more than favoring
vice that enriches bookmakers at home.

Casinos in the U.S. traditionally have "fundamentally opposed" online
gambling, said Holly Thomsen, spokeswoman for the American Gaming Assn., the
casino industry's lobbying arm. Without "proper regulations," she asked, who
would protect the children or the "problem gamblers"?

In April, however, the industry group adopted a more neutral stance, saying
the issue deserves further study, which was perhaps not a coincidence,
because MGM Mirage and Harrah's, both members of the American Gaming Assn.,
now say they would like a piece of the action if it were legal.

Online gambling remains a tiny slice of the gaming pie. The gross wagers -
amount bet minus winnings - on legal gambling in the U.S. was $83.7 billion
in 2005, up $4.8 billion, or 6.1%, from 2004, according to Christiansen
Capital Advisors, which tracks the numbers. By contrast, online gambling's
gross revenue was $5.9 billion worldwide, just 7% of the U.S. total, despite
a 42.2% rise from the year before.

All told, the online gaming revenues were just 27% of those of Indian
casinos and one-quarter of those enjoyed by state lotteries. But, of course,
these amounts probably would explode if online betting in the U.S. were
legal and properly regulated. As it is, a 2005 survey commissioned by the
American Gaming Assn. revealed that 4% of Americans gamble online, but 38%
of them said they started last year, and 70% of them reported that they
began betting online in the last two years.

Given such growth, the online share of the gaming market probably will
increase unless law enforcement becomes more effective than anyone imagines.

U.S.-based casino companies have traditionally soft-pedaled their interest
in online gaming, it being illegal and all that. But at least some casinos
would rather participate than see the entire business outlawed.

The casinos say their interest in betting via modem is not because they fear
the competition. Many have wrongly predicted the demise of Las Vegas because
venues for legal gambling - riverboats, lotteries, Indian casinos - have
expanded, said Robert LaFleur, gaming analyst with Susquehanna Financial
Group. But over the years, the conventional wisdom has become "the more
gamblers, the merrier," because they'll wind up eventually in Las Vegas.
"Anything that creates more gamblers is good for brick-and-mortar casinos,"
said Dennis Forst, an analyst for Keybanc Capital Markets.

If online gambling is ever legalized here, the big casino companies would
get into the business and no doubt dominate it with their trusted brands and
their deep-pocketed marketing budgets. Would you rather make a bet with some
crew in the Caribbean, or with Caesars Palace, which you might also visit
from time to time? The American Gaming Assn. survey indicated that 67% of
online gamblers visited a casino in the last 12 months.

Two days after the National Coalition Against Legalized Gambling Regional
Conference occurred here, I saw Seneca Nation President Barry Snyder, Mayor
Byron Brown and Seneca Gaming Corp. officials on public access TV replaying
the Fulton Street sale approval announcement and predicting "development,
waterfront connectedness, millions of tourists" and other such misleading
sound bites. This offensive and private press staging did not present any
opposing views or facts. No public input was offered or allowed. There was
no citizen representation. This came as a result of surreptitious,
behind-closed-door sham "negotiations" over the last two months that
overlooked fact, economic research and obvious outcome in other communities.
By contrast, the educational, open NCALG conference provided solid economic
analysis by experts and research founded on realities. It has been clearly
shown that urban casinos cause harm far in excess of any help to the city.
Again, look at Detroit, Niagara Falls, New York, Louisiana, Turning Stone or
the big casinos in Connecticut - all true losers for these communities.
Please understand that there is real human tragedy for individuals and
families being created in these "entertainment" palaces. Adult gamblers are
modeling the risk of future misery for their children. Buffalo Creek (which
will hopefully never open) in legal documents wrote its stated intention is
to bring in the local population, but now claims "in writing" that it cares
about promoting itself to the region. The Senecas and Brown have no data, no
facts and no proof to support the future benefit to Buffalo. The first
year's $125 million will go to the building trades - Brown's allies - and
yearly thereafter $150 million or more will leave the economy and bring in a
zero-development Niagara-Falls type scene, good only for the Senecas and
gambling industry supporters.

For every dollar generated, $3 will be lost and $12 million to $16 million
in taxes will belong to the sovereign nation, not the city. Five million
dollars for the city from the slot cut is 50 percent less than revenue from
parking enforcement as projected in the 2006-07 budget.

Is anyone in City Hall doing the math or checking the facts? Not one city
official came to the gambling conference. The National Gambling Impact Study
Commission stated that as the money is lost faster, the socioeconomic
negatives increase dramatically. Its final report confirmed that the
gambling industry had created new addicted gamblers, new bankruptcies and
new crime and corruption. The 1999 U.S. Gambling Commission unanimously
called for a moratorium on the expansion of U.S. gambling. Sadly, however,
it has grown into a monster.

Anyone with sense can see the harm coming to Buffalo. Jobs will be lost,
restaurants closed, families devastated, bankruptcies and crime increased.
The casino is a strategy for injustice, not economic development.

Here in THE U.S., it's OK to bet on horses, play Lotto, gamble at Indian
casinos, wager in Atlantic City. And in Las Vegas, it's virtually a
patriotic duty to gamble. In all, you can legally bet in 46 of 50 states,
but not over the Internet. Online gambling is illegal. Although the online
side of the business, while still small, is booming, Las Vegas casinos have
hardly clamored for its legalization. That's partly because they figure that
whenever folks develop a taste for gambling, they will sooner or later look
to Vegas to satisfy their hunger. If the distinction between gambling online
and offline strikes you as hypocritical, you're not alone. In November 2004,
the World Trade Organization ruled that the United States was in violation
of international law by making it a crime for Americans to place bets with
online bookies parked offshore. Its court agreed with the tiny island nation
of Antigua that, with legal gambling so prevalent in the U.S., laws barring
gambling online with offshore casinos was protectionist and, therefore, a
violation of international treaties. Antigua's economy, because it depends
on Internet casinos, was unduly harmed.
Since then, the case has bogged down in post-judgment proceedings to
determine the extent of U.S. compliance with the ruling, which the U.S. can
still appeal.
Aggravating the situation, however, American officials have stepped up
enforcement of existing laws, and Congress passed legislation putting more
obstacles in the way of online bettors. This summer, federal and state
officials arrested two British executives, David Carruthers, chief executive
of BetonSports, and Peter Dicks, chairman of Sportingbet, when they touched
down in the U.S. to change planes. Although Carruthers' and Dicks'
businesses are lawful in their home countries, federal prosectors indicted
Carruthers and BetonSports for taking wagers from U.S. residents. Dicks'
gambling activities offended the sensibilities of Louisiana law.

Following the arrests, Congress passed the Unlawful Internet Gambling
Enforcement Act of 2006. Although the new law doesn't make Internet casinos
or bookies illegal (they already are), it bars banks and credit card
companies from facilitating the transfer of funds to online casinos.

The actions have prompted some online casinos to announce that they will no
longer accept bets from U.S. residents. Although there is some uncertainty
about how the new law will work or how easily it might be evaded, shares of
online casino companies, which are heavily dependent on U.S. wagers, dropped
by as much as 58% on the London Stock Exchange.

Because Congress hasn't moved to shut down other gambling opportunities in
the U.S., attacks on Internet gambling amount to little more than favoring
vice that enriches bookmakers at home.

Casinos in the U.S. traditionally have "fundamentally opposed" online
gambling, said Holly Thomsen, spokeswoman for the American Gaming Assn., the
casino industry's lobbying arm. Without "proper regulations," she asked, who
would protect the children or the "problem gamblers"?

In April, however, the industry group adopted a more neutral stance, saying
the issue deserves further study, which was perhaps not a coincidence,
because MGM Mirage and Harrah's, both members of the American Gaming Assn.,
now say they would like a piece of the action if it were legal.

Online gambling remains a tiny slice of the gaming pie. The gross wagers -
amount bet minus winnings - on legal gambling in the U.S. was $83.7 billion
in 2005, up $4.8 billion, or 6.1%, from 2004, according to Christiansen
Capital Advisors, which tracks the numbers. By contrast, online gambling's
gross revenue was $5.9 billion worldwide, just 7% of the U.S. total, despite
a 42.2% rise from the year before.

All told, the online gaming revenues were just 27% of those of Indian
casinos and one-quarter of those enjoyed by state lotteries. But, of course,
these amounts probably would explode if online betting in the U.S. were
legal and properly regulated. As it is, a 2005 survey commissioned by the
American Gaming Assn. revealed that 4% of Americans gamble online, but 38%
of them said they started last year, and 70% of them reported that they
began betting online in the last two years.

Given such growth, the online share of the gaming market probably will
increase unless law enforcement becomes more effective than anyone imagines.

U.S.-based casino companies have traditionally soft-pedaled their interest
in online gaming, it being illegal and all that. But at least some casinos
would rather participate than see the entire business outlawed.

The casinos say their interest in betting via modem is not because they fear
the competition. Many have wrongly predicted the demise of Las Vegas because
venues for legal gambling - riverboats, lotteries, Indian casinos - have
expanded, said Robert LaFleur, gaming analyst with Susquehanna Financial
Group. But over the years, the conventional wisdom has become "the more
gamblers, the merrier," because they'll wind up eventually in Las Vegas.
"Anything that creates more gamblers is good for brick-and-mortar casinos,"
said Dennis Forst, an analyst for Keybanc Capital Markets.

If online gambling is ever legalized here, the big casino companies would
get into the business and no doubt dominate it with their trusted brands and
their deep-pocketed marketing budgets. Would you rather make a bet with some
crew in the Caribbean, or with Caesars Palace, which you might also visit
from time to time? The American Gaming Assn. survey indicated that 67% of
online gamblers visited a casino in the last 12 months.

Gamblers may look over their shoulder now, but experts say a new
Internet-gambling ban won't keep bettors from ponying up, just turn them on
to overseas payment services out of the law's reach. "It has put a terrible
scare into people," said I. Nelson Rose, who teaches gambling law at
Whittier Law School. "But it won't by any means wipe out Internet gambling."
The fright swept through the $12 billion industry on the heels of the recent
arrests of two gambling company executives and a new law President Bush
signed Oct. 13 that seeks to ban most online gambling and criminalizes funds
transfers. The law has wiped out billions of dollars in shareholder value of
British companies, leaving the industry's future in doubt as U.S. lawmakers
initially celebrated finding a way to halt bets coming from America. But
serious questions remain about whether the legislation can be effective in
stopping U.S. residents from playing poker or betting on sports.
The Unlawful Internet Gambling Enforcement Act goes after the money, not the
millions of players, which would be nearly impossible to enforce.
It will essentially try to choke off the way Americans fund their gambling
habits, hoping to prevent the transfer of dollars to the popular Internet
sites.
It's also widely understood that the law has online poker in its sights,
identifying it as a game of chance - something the poker companies dispute.
They believe poker is a game of skill and therefore not subject to the new
rules. But they're fearful nonetheless. "Their mission is to kill the
funding of online poker, and that's what this law does," said Mike Sexton,
who hosts the popular World Poker Tour and has won millions as a
professional player. 2,000 gambling sites
The new law comes amid an explosion in online gambling, fueled by the Texas
Hold 'em craze and widespread access to the Internet. In addition, dozens of
Web sites have sprouted up that allow gamblers with credit cards to bet on
any sport they choose, for any amount of money they want.

Industry experts say there are an estimated 2,000 Internet sites that take
bets for sports and poker. American players have fueled Internet gambling,
supplying $6 billion of the $12 billion in revenues generated annually.

"The time has been one of rapid growth," said Sebastian Sinclair, president
of Christiansen Capital Advisors, a gambling consultant. "This industry was
well on its way to becoming mainstream in a great part of the world. Capital
was tripping over itself to fund these companies."

The new law gives the U.S. Treasury and the Federal Reserve, along with the
attorney general, 270 days to establish policies and procedures.

"The regulations are clearly going to prevent banks from doing electronic
fund transfers to gambling sites, but that is no big deal," Rose said.
In some cases, banks simply move the money to payment processors, known as
e-wallets. Non-U.S. payment processors such as the widely used Neteller then
transfer the money to the Internet gambling sites.

The U.S. government has no authority over processors like Neteller that are
operating legally.
Anthony Cabot, a gambling lawyer in Las Vegas, thinks language used in the
bill provides a loophole for the payment processors and the U.S. banks that
want to do business with them.

"Unless you have some fairly draconian measures ... the likelihood of
stopping payment to them is small," Cabot said.

Offshore betting targeted
Much damage has already been done to the offshore sports-betting industry
without the looming regulations.
British BetOnSports PLC folded after its chief executive was arrested in
July by U.S. authorities. David Carruthers faces 22 counts of fraud and
racketeering charges and remains under house arrest in the St. Louis area.

London-based Sportingbet's chairman was detained last month in New York on a
state fugitive warrant charging him with illegal online gambling. He was
eventually freed.

Both arrests sounded serious alarm bells for those running sports wagering
sites that take American bets.

The new legislation has already had a dramatic effect. It supposedly
clarifies the 1961 Wire Act, explicitly outlawing Internet gambling,
including online poker.
It creates new criminal penalties that have rattled investors and
executives - although Rose said it doesn't expand the act, and there's no
indication the Justice Department is about to launch a huge campaign to
enforce the law.

Still, the biggest publicly traded names in Internet gambling on the London
Stock Exchange and AIM, the exchange's global market for growing companies,
could not afford to flout American law. When news broke earlier this month
that Congress has passed the bill, Internet-gambling companies traded on
those exchanges lost a combined $7 billion in market capitalization.

PartyGaming PLC, once the envy of online gambling with its more than $8
billion IPO in 2005, is now trying to figure out how to save its business
model. It runs what was once the world's biggest poker site, PartyPoker, and
has said it will no longer take payments from the U.S., eliminating nearly
80 percent of its revenue and sending its stock plunging.

Another poker company, 888 Holdings PLC, also said it would stop taking U.S.
bets, ensuring its profits will fall dramatically.
Sportingbet and Leisure & Gaming both sold their U.S. operations for a
dollar. Sportingbet said its exit from the U.S. market cost it nearly $400
million.

THE biggest bets in Las Vegas take place behind closed doors. In the private
high-rollers' suites, punters bet $1m a hand on blackjack while sipping
$5,000-a- bottle cognac. This month the biggest bet in town is being made
away from the slot machines and roulette wheels. It is being placed on the
boardroom table, not the card table; and the prize is in Britain. What
happens in Vegas is supposed to stay in Vegas; but Chuck Atwood is betting
£300m that his firm, Harrah's Entertainment Inc, the world's biggest casino
operator, can bring a bit of Sin City to the UK. Atwood, vice-chairman of
Harrah's, predicts that its 135p-a-share bid for London Clubs International
(LCI), which operates seven casinos in Britain and is opening five more,
will "close within a month". Harrah's already controls 34% of LCI after the
biggest shareholder, Genting International, the Malaysian gambling group,
agreed to sell its 30% stake to the Las Vegas firm last week.
Atwood expects the other LCI shareholders to follow suit in a matter of
weeks. He knows the bid will make him a hate figure among critics who waged
a furious campaign against the government's 2005 Gambling Act, which will
unwind the strict rules that have governed gaming in Britain for 40 years
when it comes into force next year. Atwood gave an assurance that Harrah's
was "responsible and respectable". Giving his first interview to a British
newspaper, he said that in gambling "as in almost every activity that human
beings engage in, some people do it to excess". But "there is no evidence
that gaming is predatory". He added: "The evidence is that casinos provide a
very rich entertainment option. They don't prey on people. They offer
fulfilling entertainment. There is no horrible social result. The social
result is people get jobs. That is a good outcome. We are a quality
operator." The public campaign against the gambling act forced ministers to
abandon plans for almost a dozen super-casinos and opt instead for one
super-casino, eight large casinos and eight small ones. Despite this,
Atwood, 58, believes Britain is the ideal new market for gambling firms.

"Britons gamble on everything," he said. "Gambling is probably more widely
available (there) than anywhere else in the world. Walk down any high street
and there are betting shops. You can gamble on the internet too.

"Brits gamble but they don't gamble in casinos. One reason is that there is
not much to do in British casinos other than gamble. We want to change that
by creating a nicer and grander experience."

Harrah's £300m bid for LCI is high. It was recently valued at only £230m,
and last year it made a £3.6m pre-tax loss. "There are those who believe
that we are being foolish, but we see value. We think it could grow by leaps
and bounds," Atwood said.

By combining Britons' appetite for gambling with Harrah's casino expertise -
it controls the Caesars Palace, Paris and Flamingo casinos on the Las Vegas
Strip - Atwood believes he can expand the British market fivefold. "About 3%
of people in Britain frequent casinos. I can see that growing to 10% or
15%."

Harrah's wants to export the style and success of modern Vegas casinos to
Britain. In recent years the big operators, notably Harrah's and its arch-
rival MGM Mirage, have used top acts, celebrity chefs, luxury-goods brands
and spas to turn their casinos into upmarket international resorts.

Outside the sandstone walls of Atwood's office at Caesars Palace, Sir Elton
John and Celine Dion fill the 4,000-seat Colosseum theatre; shoppers browse
the latest Dolce & Gabbana and Gucci collections in the Forum mall; and
foodies sit down to a £200-a-head dinner prepared by three-Michelin-star
chef. The big casinos now generate more than half their annual revenue from
non-gambling sources.

Harrah's wants to add new, Vegas-style entertainment to LCI's existing seven
casinos in Britain and its five planned new casinos in London, Nottingham,
Glasgow, Leeds and Blackpool. It will also bid for licences to operate the
17 new casinos allowed under the gambling act.

"As well as gambling, our plan is for an auditorium purpose-built for a
signature show, top-name chefs and branded stores. We believe that we will
offer such a good night out or weekend away that people will come whether
they are gamblers or not," said Atwood.

The firm plans to advertise and use direct marketing for the first time in
the British casino market. Ads are allowed under the new gambling act, which
also allows bigger casinos, unrestricted membership, larger jackpots, more
slot machines and liberalised licensing hours.

Harrah's wants to exploit its popular American Total Rewards loyalty
programme to attract visitors. The scheme - a Tesco Clubcard-style
rewards-for-points programme - tracks customers' gambling and spending and
allows Harrah's to come up with tailor-made special offers. The firm plans
to use the card to offer gamblers discounted trips to its British and Las
Vegas casinos. Executives are rumoured to be in talks with Virgin Atlantic
and BMI - the only airlines to fly direct from Britain to Las Vegas - to
offer gamblers discounted flights.

Harrah's executives were privately furious when British ministers watered
down their deregulation plans. Although the first battle to liberalise fully
was lost, Atwood insists the war is far from over. He predicts that, if
Harrah's UK investment creates jobs in depressed areas, pressure for more
and larger casinos will grow.

"We did not get our first bite. We got our second bite. But the first bite
might still be available," he said.

Harrah's may be the first Las Vegas gambling giant to invest in Britain but
it is not the only foreign operator moving in. Genting is set to open larger
casinos with entertainment and will compete with Harrah's for licences to
run the 17 new casinos. MGM Mirage, which controls the MGM Grand, Mandalay
Bay, Bellagio and Mirage casinos in Las Vegas, is also eyeing up
opportunities in Britain.

For Harrah's, the stakes are higher than simply becoming a lead player in
Britain. The LCI deal is the key to an ambitious expansion strategy. "We see
London Clubs helping us to expand on the continent and beyond. London will
be our European hub," said Atwood.

LCI already owns two casinos in Egypt and one in South Africa, and it acts
as a consultant to a casino in Lebanon. Harrah's will retain all LCI's
overseas operations and open new casinos. It is working independently on a
casino south of Madrid and another in Slovenia.

An alleged maintainer of an illegal gambling outfit codenamed "Ching", who
is a relative of top government officials in Negros Occidental, was
sentenced yesterday to a maximum six-year imprisonment term after he pleaded
guilty for violating Republic Act 9287, also known as the amended
anti-illegal gambling law. Meted such penalty by Kabankalan Regional Trial
Court Judge Henry Arles after having been found guilty beyond reasonable
doubt was Vicente Zayco, alias Nene Pinoy.
Arles also sentenced Zayco's four companions identified as Renato Garcia,
Gene Gomez, Val Sanchez and Randy Jompilla, all bet solicitors of the
illegal gambling outfit "Ching", to a maximum of three years of
imprisonment. The Oct. 20 raid at the residential compound of Zayco, a first
cousin of Vice Governor Isidro Zayco and Kabankalan City Mayor Pedro Zayco,
was conducted by virtue of search warrants issued by Judge Roberto
Chiongson. It yielded P2,553 in alleged cash bets, assorted gambling
paraphernalia, ammunition of various calibers of firearms and an ICOM
hand-held radio. Arles said the accused, assisted by their counsel, Alex
Abastillas, pleaded guilty to the offense, which was done voluntary on their
part, and not through threats or intimidation, induced by any prize or
reward.
Vice Governor Zayco and Mayor Zayco earlier said they are keeping their
hands off the illegal gambling case involving their cousin. Mayor Zayco who
is against any form of illegal numbers game, had also warned Vicente several
times in the past to put a stop to his illegal activities. Supt. Roderick
Alba, Kabankalan police chief, said the court also issued an order placing
the convicted persons under the custody of their counsel, pending approval
of their application for probation.

Two days after the National Coalition Against Legalized Gambling Regional
Conference occurred here, I saw Seneca Nation President Barry Snyder, Mayor
Byron Brown and Seneca Gaming Corp. officials on public access TV replaying
the Fulton Street sale approval announcement and predicting "development,
waterfront connectedness, millions of tourists" and other such misleading
sound bites. This offensive and private press staging did not present any
opposing views or facts. No public input was offered or allowed. There was
no citizen representation. This came as a result of surreptitious,
behind-closed-door sham "negotiations" over the last two months that
overlooked fact, economic research and obvious outcome in other communities.
By contrast, the educational, open NCALG conference provided solid economic
analysis by experts and research founded on realities. It has been clearly
shown that urban casinos cause harm far in excess of any help to the city.
Again, look at Detroit, Niagara Falls, New York, Louisiana, Turning Stone or
the big casinos in Connecticut - all true losers for these communities.
Please understand that there is real human tragedy for individuals and
families being created in these "entertainment" palaces. Adult gamblers are
modeling the risk of future misery for their children. Buffalo Creek (which
will hopefully never open) in legal documents wrote its stated intention is
to bring in the local population, but now claims "in writing" that it cares
about promoting itself to the region. The Senecas and Brown have no data, no
facts and no proof to support the future benefit to Buffalo. The first
year's $125 million will go to the building trades - Brown's allies - and
yearly thereafter $150 million or more will leave the economy and bring in a
zero-development Niagara-Falls type scene, good only for the Senecas and
gambling industry supporters.

For every dollar generated, $3 will be lost and $12 million to $16 million
in taxes will belong to the sovereign nation, not the city. Five million
dollars for the city from the slot cut is 50 percent less than revenue from
parking enforcement as projected in the 2006-07 budget.

Is anyone in City Hall doing the math or checking the facts? Not one city
official came to the gambling conference. The National Gambling Impact Study
Commission stated that as the money is lost faster, the socioeconomic
negatives increase dramatically. Its final report confirmed that the
gambling industry had created new addicted gamblers, new bankruptcies and
new crime and corruption. The 1999 U.S. Gambling Commission unanimously
called for a moratorium on the expansion of U.S. gambling. Sadly, however,
it has grown into a monster.

Anyone with sense can see the harm coming to Buffalo. Jobs will be lost,
restaurants closed, families devastated, bankruptcies and crime increased.
The casino is a strategy for injustice, not economic development.

Britain's culture secretary on Friday compared the United States crackdown
on online gambling to the failed alcohol ban of the Prohibition as she
prepared to host an international summit on Internet gambling next week.
Tessa Jowell warned that the U.S. ban on Internet gambling would make
unregulated offshore sites the "modern equivalent of speakeasies," illegal
bars that opened in 1920s America when alcohol was banned. U.S. Congress
caught the gambling industry by surprise earlier this month when it added to
an unrelated bill a provision that would make it illegal for banks and
credit-card companies to settle payments for online gambling sites. The
decision closed off the most lucrative region in a market worth $15.5
billion this year in "spend" value - the amount gambling companies win from
their clients, or the amount gamblers lose. Several London-based Internet
gambling companies and a handful in Europe and Australia subsequently sold
off or shut down their U.S. operations, losing around 80 per cent of their
combined business in the process. U.S. officials have declined to
participate in Tuesday's gambling summit in London, where lawmakers from 30
countries will discuss ways to regulate the industry, including the
protection of minors and keeping the industry free of crime.

The British government plans next week to seek international support for
legalized, regulated online gambling, emphasizing a trans-Atlantic
difference on the issue after the Bush administration's recent move to
outlaw transactions with Internet gambling services. During a conference
scheduled for Tuesday at the Royal Ascot racecourse, the British government
plans to seek adoption of a broad code of principles on Internet gambling,
according to a person briefed on a communiqué prepared by the British
delegation. Officials from more than 30 countries are expected to attend,
though the U.S. Justice Department has declined to send a representative. In
contrast to the United States, where President George W. Bush this month
signed into law a bill that bans credit card companies and online payment
systems from facilitating Internet bets, Britain last year moved to legalize
online gambling. "We believe that tough regulation is a better approach than
a free-for-all or prohibition," Anthony Wright, a spokesman for Tessa
Jowell, the secretary for culture, media and sport, said Friday. "We will be
looking to secure agreement to the principles for international standards of
regulation." Wright's comments echo remarks attributed to Jowell that were
reported in The Financial Times on Friday. She, too, alluded to the U.S.
prohibition of alcohol from 1920 to 1933, saying the move to ban online
gambling could lead to the creation of "modern-day speakeasies," driving
Internet gambling underground and into the control of criminals. The U.S.
Justice Department did not immediately return a call seeking comment. Some
analysts say the British move to legalize and regulate online gambling
companies could create financial benefits for the government by allowing it
to tax companies that move back to Britain from offshore locations like
Gibraltar and Costa Rica.

But the stock prices of online gambling companies, several of whose shares
are traded in London, fell after congressional passage of the U.S.
legislation. America has been the largest market for these companies, though
several of them have stopped taking bets from U.S. gamblers.

The person briefed on the proposed communiqué, who requested anonymity
because he was not authorized to speak on the issue, said it was modeled on
the principles of the recent British gambling legislation and was aimed at
promoting fairness for gamblers, keeping out crime and making sure children
and vulnerable people were protected.

The proposal apparently does not address one potentially sensitive area,
state control of gambling, over which Britain disagrees with some of its
neighbors. Several of the countries scheduled to attend the conference,
including France and Germany, have recently moved to protect lucrative
state- sponsored gambling monopolies from online competition.

Unregulated internet gambling is simply adding to the growing problem of
addiction, delegates attending the Canadian Association of Suicide
Prevention conference in Toronto were told this week. An estimated 200
compulsive gamblers commit suicide in Canada every year, said Terry Flynn, a
director of spiritual care at the Bellwood Health Services facility in
Toronto. The growth of gambling on the internet, where no regulations exist,
is making the problem worse, Flynn said. "It's hidden. You can lie about it
and tell people you're doing your homework or that you're researching
something, but in fact you're getting into deep trouble," he said.The
ever-increasing options available to gamblers in the North - everything from
card games to the internet - are contributing to the growing problem,
Iqaluit counsellor Sheila Levy told delegates. "They are doing very well
with their jobs and making a lot of money, and yet their children are going
hungry often because the money goes perhaps in one night in gambling," Levy
said.

A growing initiative to unseat Kyl from his comfortable Senate appointment.
Kyl reportedly has ambitions to become the Republican majority leader in the
Senate following Senator Bill Frist's departure Both Republicans played a
major role in ramming the Unlawful Internet Gambling Enforcement Act through
Congress in the closing minutes of the pre-election session, angering
millions of Americans who regard online poker and online gambling as an
entertainment of choice. Reports today suggest that dozens of websites
focusing on Arizona will join the campaign to unseat Kyl for his role in the
attack on online poker and online gamblings' rights whilst his own state
runs diverse forms of online gambling including state lotteries and Horse
racing, which were excluded from the online gambling ban- so Kyl was really
helping Horse racing and banning poker- what and insane bill. online poker
and online gaming sites are urging their Arizona players to participate in
the initiative, with one major operation claiming it has at least 5 000
Phoenix, Arizona online gambling and online poker players on its database
that it will alert to the action. Jim Pederson has a very credible chance of
beating Jon Kyl. We as poker players need to send Jon Kyl a very clear
message that we are strong and we need to be represented as much as his
special interests (lotteries and Horse racing). Please give any amount that
you can. We can make a difference and show Senator Kyl that we won't stand
for his hypocrisy. We as poker players sat by while Jon Kyl used national
security as a political tool to push this legislation through. It won't
happen again.

Smoking. Gambling. A sin tax for the arts. An increase in the minimum wage.
These are among the contentious issues voters here will decide at the ballot
box November 7. Perhaps the most confusing for Ohio voters are statewide
Issues 4 and 5. Both would limit smoking in public places, but to different
degrees. Issue 4 is a constitutional amendment spearheaded by Smoke Less
Ohio, a group supported by the tobacco industry and businesses that cater to
smokers. It would allow smoking in bars, restaurants, bowling alleys and
bingo halls, but ban smoking in almost all other public places. Because it
is a constitutional amendment, it would overturn smoking bans currently in
effect in 21 Ohio cities, including Columbus. Issue 5, sponsored by
SmokeFree Ohio, a campaign of the American Cancer Society, would ban smoking
statewide in all public buildings and workplaces. Exceptions include
family-owned small businesses where all employees are related to the owner
and where enclosed smoking areas are not open to the public. Also exempt
would be outdoor patios, tobacco stores and nonprofit private clubs with no
unaffiliated employees. Nursing homes and hotels also could designate
smoking rooms. If both initiatives pass, Issue 4 would prevail because it
is a constitutional amendment, while Issue 5 is merely a law. Because of the
high stakes, Issue 5 supporters are working hard to explain that voters must
defeat Issue 4. It is not enough to vote for Issue 5. For the SmokeFree
measure to become the law in Ohio, voters must also vote against Issue 4.
While Issue 4 supporters criticize the scientific validity of studies
showing the harmful effects of secondhand smoke, they also say that
well-ventilated areas in bars and restaurants protect non-smokers. But the
latest report this summer from the U.S. Surgeon General says there is no
safe level of secondhand smoke. Furthermore, employees in the hospitality
industry have no choice but to breathe in secondhand smoke. Issue 5
supporters also note that smoking does not simply affect the smoker.
Families and society also bear the costs associated with health care for
smoking-induced illnesses, reduced productivity or death. The economic
issues of banning smoking have been hotly debated. Bar and restaurant owners
say smokers will stop patronizing them, costing jobs in the hospitality
sector. Smokers, they claim, will buy liquor and drink at home where they
can smoke. But studies in cities with bans have either shown that revenues
have not decreased, or that declines in some businesses have been balanced
by gains in others.

Today's minimum wage buys less than at any time in the last 50 years.

Ohio remains one of only 14 states that do not allow casino gambling.

Arts groups are struggling with declining ticket sales and lower donations
in a stagnant economy.

Issue 5 supporters also note that smoking does not simply affect the smoker.
Families and society also bear the costs associated with health care for
smoking-induced illnesses, reduced productivity or death.

The economic issues of banning smoking have been hotly debated. Bar and
restaurant owners say smokers will stop patronizing them, costing jobs in
the hospitality sector. Smokers, they claim, will buy liquor and drink at
home where they can smoke. But studies in cities with bans have either shown
that revenues have not decreased, or that declines in some businesses have
been balanced by gains in others.

Issue 2 would raise Ohio's minimum wage from $5.15 to $6.85 per hour
starting Jan. 1; waiters and others who receive tips would see their base
pay increase from $2.13 to $3.43 an hour.

Last spring, state legislators increased Ohio's minimum wage to the federal
minimum of $5.15. That wage hasn't been changed in nine years; economists
say today's minimum wage buys less than at any time in the last 50 years.

At $5.15 an hour, a full-time employee earns $10,712 annually, nearly $3,000
below the federal poverty level for a family of two. Relatively few Ohioans
earn the minimum; about 300,000 are at that level. But that base wage sets
the floor, in effect keeping hourly earnings low, say labor unions and
religious, neighborhood and civil rights organizations who support Issue 2.

Opponents, including chambers of commerce, retail merchants, restaurateurs
and other businesses, also object to the measure's fine print. They say it
would open payroll records to scrutiny from unions and others, invading
employees' privacy and burdening employers with additional record keeping.

Supporters point to the amendment's language, which specifically forbids
disclosure of an employee's name without that person's permission. The
federal minimum wage already requires such record keeping, they point out.

Critics also object to amending the Ohio Constitution to raise wages.
Instead, they say, the legislature should act to increase the minimum wage.

Surveys show that most people think Ohio's minimum wage is too low, but
opponents of Issue 2 say its annual adjustment for inflation is a bad idea.
While Ohio's minimum wage is now below many other states, several rounds of
inflation could boost labor costs here so high that businesses would choose
to locate or expand elsewhere.

Supporters of Issue 2 emphasize that $5.15 an hour is not a living wage.
Furthermore, better-paid employees are less likely to seek work elsewhere,
which is better for businesses, they point out. Studies show that states
with higher minimum wages have more job growth than those without the more
generous wage protection, proponents say.

Supporters call Issue 3 "Learn and Earn" because the constitutional
amendment would allow 31,500 slot machines at nine sites in Ohio; a portion
of the revenue would go to college scholarships.

Gross annual revenue from slot machines will be $2.8 billion, proponents
estimate. Slots operators would get 55% of any money not won by players.
This 55% will be used to pay employee salaries and benefits, equipment, site
operations, advertising, debt service and taxes. Estimated annual profits
for each site would be about $20 million or $180 million total.

Of the remaining slots revenue, 30% would go for tuition scholarships to
Ohio students attending Ohio colleges. Supporters estimate this at about
$850 million; Ohio Office of Budget and Management estimates $324 million.

Eight percent (about $225 million) would go to economic development and
capital projects, with Cleveland's share of that totaling about $75 million.
Six percent (about $170 million) would increase purses at Ohio racetracks.
One percent ($28 million) would go to gambling addiction services.

Issue 3 would allow slots at Ohio's seven racetracks as well as at two
downtown Cleveland locations: Tower City, which is owned by Forest City
Enterprises Inc., and at Nautica Entertainment Complex, operated by Jeff
Jacobs. In 2010, voters here could expand the four Cleveland-area sites to
offer full casinos with gaming tables. Downstate racetracks would not have
that option.

Ohio gamblers spend over $1 billion annually at casinos in Indiana, West
Virginia and Michigan, estimate supporters, who include many civic and
business leaders. Ohio remains one of only 14 states that do not allow
casino gambling.

Opponents, many of whom are also religious leaders and state officeholders,
emphasize the downside of slots and casinos. Gambling will create more crime
and more addicts, burdening social service agencies and county budgets.
There's a finite amount of entertainment dollars; Issue 3 will just shift
them from theaters and restaurants to slots parlors and casinos.

Revenues from gambling will not solve the educational funding crisis in this
state, opponents say. It will only cloud the issue. However, proponents
counter that Issue 3 forbids the Ohio General Assembly from using Learn and
Earn proceeds to cut educational funding.

Critics point out that most of the profits will go to a handful of wealthy
racetrack owners and slots operators, giving them a constitutionally
mandated monopoly. Proponents counter that the slots parlors will pump
billions into Ohio's economy and create up to 56,000 good-paying jobs with
benefits. Cleveland could see 5,000 new jobs.

Ohio already has a lottery and other forms of gambling such as church bingo
games, proponents note. Thus, it's hypocritical for religious leaders and
others to oppose slots parlors.

This is the third time since 1990 that Ohioans have been asked to vote for a
gambling provision. The last two gambling initiatives were defeated
statewide by wide margins.

Issue 18 would raise the tax on cigarettes to provide funding for arts and
culture in Cuyahoga County. The measure, which lasts for 10 years, would
increase the tax per cigarette 1.5 cents, adding 30 cents to a pack.

Levy supporters estimate the tax will raise $20 million annually, even
assuming a decline in cigarette purchases due to the higher price. The money
would provide operating support for the county's 105 nonprofit arts
institutions such as Great Lakes Theater Festival and the Maltz Museum of
Jewish Heritage. It also will fund artist residencies and innovative
projects by individual artists.

The county arts and culture organizations add over $1 billion annually to
the local economy, supporters say, a larger economic impact than that of
Cleveland's major professional sports teams. The arts groups also employ
3,000 people full-time and generate 7,000 jobs at related businesses.

Arts organizations here are struggling with declining ticket sales and lower
philanthropic donations in a stagnant economy. They've lost support from
major corporations who have departed the area. Furthermore, Cleveland is one
of the few major metropolitan areas with little dedicated funding for the
arts.

Most of the opposition to the measure comes from smokers, who feel they are
being unfairly taxed again to pay for economic development. Excise or
so-called sin taxes helped pay for the Gateway complex and Cleveland Browns
Stadium.

Other opponents, who include small business owners, say the measure will
hurt convenience stores, bars and gas stations. The drop in cigarette sales
will cause them to layoff employees, thus adding to the unemployment rolls.
Retail cigarette sales will drop, further hurting the economy, and tax
revenues will decrease. Smokers will buy cigarettes online and
out-of-county, delivering another blow to state and county tax revenues.

Other detractors point to the hypocrisy of saying Issue 18 will promote
healthy living by reducing cigarette smoking at the same time it capitalizes
on that behavior to finance arts organizations.

Getting much less attention than the other ballot initiatives is Issue 19,
the 2.9-mill, four year, replacement tax for health and human services in
Cuyahoga County. The measure is listed on the ballot as a tax decrease
because the millage drops from 3.0 to 2.9. However, tax bills will increase
if the issue passes because inflation has increased property values.

Homeowners would pay $397 annually on a $100,000 house, rather than the $359
they now pay. The $38 added tax would raise $27.3 million a year.

Among other county programs, the tax helps pay for MetroHealth Medical
Center - its Metro Life Flight, Level One trauma center, and burn unit. The
levy also funds home health care, hot meals and transportation for seniors,
health care for infants and toddlers, foster care for abused children, and
treatment for emotionally disturbed youth.

Former Commonwealth Bank employee Erick Tjandra, 32, was jailed for a
minimum three years on 37 counts of defrauding the bank. Over a 15-month
period Tjandra stole $10.4 million from the bank, $8 million of which he
"poured down the throat of the casino'', District Court Judge Christopher
Armitage said today.
The casino had allowed the bank clerk to play in the high-rollers room alone
against the house, Judge Armitage said. ''(It was) the height of
irresponsibility for the casino to have placed such a vulnerable person in
the situation of gambling in what is called the Kerry Packer Room, against
the house,'' he said. "He was not Kerry Packer, he is not ... an Asian
prince. "He is a humble bank clerk who unfortunately developed a gambling
addiction beyond his means.'' Tjandra was sentenced to five years' jail with
a non-parole period of three years. He will be eligible for release in
October 2009.

The voices talking so loudly against the Unlawful Internet Gambling
Enforcement Act (UIGEA) on forums and blogs across are the internet will be
leaving their keyboards on November 3-4 and will be headed to Washington
D.C. to protest the latest US prohibition. The purpose of the demonstration
will be to gain press coverage from major news organizations such as Fox,
MSNBC, and CNN (who have all promised to attend the event) in order to get
the message out to the general public before they vote. The message they
are trying to get out to voters is that Republicans, led by the soon to be
parting Senator Bill Frist, have begun a modern day prohibition by
deceitfully attaching the ban to an unrelated piece of legislation on the
last day of senate sessions. The fact that they attached the bill to
unrelated legislation about Port Security, an issue that was impossible for
anyone to vote against, angered other politicians about as much as it
angered the 25 million American citizens who participate in online poker.
"What could be a greater invasion of privacy than government telling you
cannot play Internet poker in your own house?" congresswoman Shelley Berkley
said. "This was a breathtaking abuse ... of power." "The ban on Internet
gaming was part of the Republican family values agenda. They passed it to
pound their chests and talk about how they're protecting America's youth,"
Berkley said. "You got a bunch of ideologues running Congress. They're not
interested in anything that has a modicum of common sense; they're only
interested in a very narrow moral position."

Berkley insisted that the protest expressing dissent will surely be heard by
politicians and other Americans before voting time.

Debbie Richardson, the person instrumental in organizing the protest against
the ban, has reported to us that over 250 people have confirmed they will be
attending and that many singular people said they will be bringing groups
along with them.

Poker (for chips only) will be played in the streets as part of the protest.
There have been rumors that celebrities who support poker may show up, and
other speakers are confirmed.

"We think we have enough people who confirmed showing up for the event that
could fill up the square behind the White House," and that many people,
Richardson explained, will get noticed by the press.

"The more people show up for the protest the more interest the press will
show," Richardson said. She also expects a large number of people to attend
who have not confirmed.

The Pennsylvania Legislature was unable to finalize a long-awaited gambling
reform bill Tuesday night after the House amended a number of provisions,
including one it claims was the result of a Senate drafting error. The
gambling reform bill was the second piece of major legislation on the agenda
that lawmakers may be unsuccessful in finishing up before the November
election because of overlooked errors. A negotiated bill on lobbyist
disclosure fell apart after the Senate passed an amendment Monday night that
accidentally used language from an earlier version. What exactly happened on
gambling reform is in dispute. A top Republican Senate aid, Erik Arneson,
said the change that mucked up gambling reform was not a mistake but rather
the result of attempts to address concerns raised by House negotiators. That
Republican aide, as well as a top Democratic aide, hinted that the Senate
might return after all to clean up both bills, after swearing off the idea
when the lobbyist disclosure bill error was discovered. "We will make some
sort of announcement tomorrow," said Christopher Craig, chief counsel to
Philadelphia Democrat Sen. Vince Fumo. On gambling reform, House members
said a provision banning gambling applicants from contributing to state and
local political campaigns left out the two racetracks which haven't been
awarded licenses. They include Presque Isle Downs in Erie and the seventh
outstanding racetrack that the state harness racing commission struck down
for Beaver and Lawrence counties. Those two track licenses are now in court
appeal. In a stunning move, the House voted unanimously to open the bill to
amendments against the advice of House Republican Leader Sam Smith. "At this
point in time, it is in the best interests of the people of Pennsylvania and
this legislative body to put this bill on the governor's desk," Smith said
from the floor. "If we amend this bill tonight there is no question this
bill becomes a sine die session football." By sine die, Smith was referring
to the lame duck legislative session after the November election and before
the two-year legislative term ends.

But members bucked Smith after what some called a heated Republican caucus
session, saying they had a responsibility to give Pennsylvanians a correct
law. Some blasted late-night bill passing.

"We have been too careless in this Legislature over the past few years in
how we go about drafting legislation," said Rep. Robert Freeman, a Democrat
from Northampton County. "We put up with unnecessary midnight sessions. We
put up with sloppy drafting and that is simply wrong."

The first amendment to correct the political contribution provision error
came from a Democrat, Rep. Kevin Blaum from Luzerne County. That amendment
opened the floodgates to three others, which effectively sunk the
Senate-negotiated bill.

Blaum said he couldn't let the bill go to a vote with such a glaring error.

"Nobody talked to us" about what was going in the negotiated bill, Blaum
later said. "And then this mistake was made and we're generously calling it
a mistake. And we had to correct it."

Among the other changes was a removal of exemptions for gambling venues on
local smoking bans, and restoring state power over riparian rights after the
bill handed those rights over to gambling venues.

When asked whether the House was torpedoing a negotiated bill, Rep. Paul
Clymer, a Bucks County Republican, said the changes were important.

"Members are seeing an important opportunity to make corrections to Act 71,"
the original 2004 gambling law, Clymer said. "We feel frustrated that time
and again we wanted to put through this legislation."

But Craig said there was no reason to hold up the entire bill for one
drafting error. He said the error actually came from a House attorney, who
came up with the political contribution language.

Gambling site Bodog has odds up for the Playstation 3 launch. While I'm
intrigued, I think the person setting the odds and deciding on the bets
needs to do a little more homework. The site still has bets up on whether
the price will be changed before launch and whether the console will get
approval by the FDA before launch.
The only really interesting bet was on which game will sell the most copies
on launch day. Bogdog has Madden as the favorite, followed by Need for Speed
Carbon and then Resistance: Fall of Man. Sonic and then F.E.A.R. rounded out
the list, with F.E.A.R. fetching 19 to one odds. What they really need to do
is set odds for PS3, Wii and Xbox 360 console sales in November. That would
be interesting Brian Crecente

PartyGaming Plc, the world's largest online poker company, lost 75 percent
of its revenue when the company shut down its U.S. sites to comply with a
new law enforcing a ban on Internet gambling. That hasn't dented Chief
Executive Officer Mitch Garber's optimism. ``Chaos breeds opportunity and we
will seize that opportunity,'' Garber said on a conference call Oct. 20,
when he laid out the Gibraltar-based company's strategy for international
expansion, particularly in Europe. ``The European Union is run in a way that
favors our business.'' The U.K., Italy and Belgium are opting to regulate
Internet gambling, rather than outlaw it, as players turn increasingly to
the Web. The EU is pushing countries to scrap any measures that protect
domestic companies when those nations open their markets. On Oct. 12,
regulators told members such as France and Austria to stop discriminating
against international bookmakers and casinos. The changes may give U.S.
gamblers more ways to evade the ban on Internet wagers at home, says William
Eadington, a professor at the Institute for the Study of Gambling and
Commercial Gaming at the University of Nevada at Reno. ``A sub-industry in
circumventing the rules will evolve,'' Eadington says, pointing to the
failure of Prohibition, which banned the sale of alcohol in the 1920s.
``American gamblers may find themselves pushed into a market that's in the
hands of Europeans.'' Italy next year will let companies offer online
lotteries, bingo and betting on sports or games of skill. The U.K. will
begin licensing private Internet gaming sites in September. Belgium is
working to change its legislation as well, and private companies are already
allowed to offer sports betting in Austria.

U.S. Revenue

The world's biggest Internet gambling companies lost $7 billion of market
value in a day after Congress passed legislation on Sept. 30 to prevent
credit-card companies from collecting payments for online bets. U.S.
President George W. Bush signed the law on Oct. 13.

PartyGaming stock has fallen 75 percent to 27 pence since the legislation
was approved.

888 Holdings Plc, one of the world's biggest online casinos, gets about half
its revenue from outside the U.S. and has fared better than many of its
rivals. Shares of the company, which is also based in Gibraltar, have
dropped 35 percent to 93.5 pence.

The U.S. accounted for half of the $12 billion Internet gambling market last
year. New York-based gaming consultant Christiansen Capital Advisors LLC
expects the global market to double to $24 billion by 2010. It said it
hadn't revised its outlook to take into account the U.S. measures.

`Regulation, Not Prohibition'

Julian Easthope, an analyst at UBS AG in London, says it's too early to say
which companies will be able to take advantage of opportunities in Europe
because the regulations are still developing. The EU's gambling market is
valued at about $70 billion.

Paul Renney, a partner specialized in the Internet at law firm Addleshaw
Goddard LLP in London, says he expects lobbying to increase to open the EU
market further.

``European countries like the U.K. that take a more enlightened approach of
regulation, not prohibition, stand to gain,'' he says.

There are still pockets of resistance. The leaders of Germany's 16 regions
last week proposed banning all private betting companies, including Internet
and traditional operators, and to extend the government's betting monopoly
to almost all forms of gambling.

Soccer Jerseys

France on Sept. 15 detained the co-CEOs of Vienna-based Bwin Interactive
Entertainment AG for three days on charges of violating gaming laws. A court
in the Paris suburb of Nanterre will decide whether to charge them within a
year, according to the company, which says its Gibraltar license gives it
the right to operate across Europe.

``Money games in France are very strictly regulated,'' French Budget
Minister Jean-Francois Cope told reporters on Sept. 19. ``It's not an
economic activity like any other, and it's out of the question to let it
explode in an unconscious manner.''

The government may jack up fines on international firms that advertise their
services in France from 4,500 euros ($5,655) to five times ad costs,
possibly including sports sponsorships, he said. The French soccer league
has banned Bwin from putting its logo onto AS Monaco's jerseys, while
stopping 888 from backing Toulouse FC, citing the risk of legal proceedings.

The French state's role in controlling the country's $24 billion gambling
market has evolved little since 1539.

French Charlatans

That's when King Francois I established a lottery in Paris to stamp out
``charlatans'' so his subjects didn't ``spend their time, labor, virtues and
necessaries in games of hazard,'' according to the Web site of La Francaise
des Jeux, France's state-controlled lottery.

Challenges to its authority, however, have multiplied.

Paris-based Groupe Partouche SA, operator of the Cannes Palm Beach casino,
in March filed a complaint with the European Commission alleging unfair
competition by La Francaise des Jeux, which is allowed to operate on the
Internet. Partouche is considering going on line in Belgium when the law
changes there.

``We just want to do our job on line as a casino operator,'' says Frederic
Vinzia, head of Partouche Interactive. He estimates there are 2 million
French people who gamble on line. ``It's a tremendous opportunity.''

In May, gambling was excluded from an EU accord to dismantle national
barriers to providing services across the trade bloc.

Falling State Monopolies

PartyGaming's Garber says countries like France and Germany will only be
able to hold out for so long. PartyGaming is developing multilingual Web
sites and putting together marketing campaigns in new markets, Garber said.
He declined to be more specific.

``The gaming and lottery monopolies are the last to fall, and they are
falling and will fall,'' he said. ``You're going to see a lot more tolerance
in Europe.''

Paddy Power Plc, Ireland's largest bookmaker, may open gaming Web sites in
Italy, Spain and Poland to take advantage of the legislative changes, Chief
Executive Officer Patrick Kennedy said in an interview in Dublin on Oct. 24.
The company started a German language service in April.

The European Commission put Italy, Germany, Hungary, the Netherlands,
Sweden, Denmark and Finland on notice in April for letting state lotteries
offer online sports betting, while barring rivals. On Oct. 12, Financial
Services Commissioner Charlie McCreevy targeted France and Italy for
shielding domestic sports bookmakers, and scolded Austria for restricting
advertising by foreign casinos.

Harrah's in London

The actions represent an initial threat, which would be followed by a more
detailed opinion before the commission could file suit at the EU's highest
court in Luxembourg. Poland separately got a final warning before a possible
lawsuit for taxing foreign lottery winnings more than domestic jackpots.

``Internet gaming is here to stay,'' says Andrew Lynch of Schroder
Investment Management, which owns more than 5 percent of Groupe Partouche.
``There's going to be plenty of saber rattling and fighting talk by the
government monopolies, but it's a trend that's going to happen.''

The changes in national gambling laws in Europe are part of efforts to boost
competition in an industry long dominated by state monopolies.

Italy, where online poker will continue to be banned, is increasing the
number of betting outlets and letting bars and restaurants take wagers.

The U.K. legislation allows for 17 new casinos, one of which will be
Europe's first ``mega'' casino, with about 1,250 slot machines. That's
sparked a flurry of acquisitions including the $570 million offer for London
Clubs International Plc by Las Vegas-based Harrah's Entertainment Inc.

`Security and Prestige'

Licensed sports betting companies in the U.K. take Internet wagers under a
1963 law that lets them do business by phone. In 2001, the country scrapped
a tax on gamblers' winnings and replaced it with a 15 percent tax on gaming
companies' gross profits to help U.K. enterprises such as William Hill Plc
compete with overseas rivals and bring offshore companies back inland.

The U.K. Gambling Act approved last year will extend the Internet licenses
from bookmakers to gaming companies. Chancellor of the Exchequer Gordon
Brown may include fiscal incentives in the 2007 budget for offshore
operators to seek the new licenses.

As a co-sponsor of a bill that was signed into law two weeks ago by
President Bush, Jon Kyl, the Republican Senator from Arizona, has worked
hard over the years to abolish online gambling utilizing the "family values"
front. The current law would look to severely cut off some forms of online
gambling via credit card transactions, though the banking sector has already
condemned the law, claiming it would be close to impossible for the banks to
monitor online gambling transactions. Gambling911.com has also learned from
top government sources that President Bush almost didn't sign the internet
gambling legislation. Bush reportedly told key members in his
administration that he did not want to sign off on an "unrelated" internet
gambling provision that arrived to his desk as an attachment to a much more
important port security bill. While hopes were high, the President
ultimately signed off on the entire package though making no mention of the
measure pertaining to online gambling. That measure was spearheaded by
Senator Jon Kyl and forced through Congress on the coat tails of the port
security bill (courtesy of Senate Majority Leader Bill Frist) during the
final Friday late night session before Election Day recess early this month.
Both Frist and Kyl have claimed that online gambling is like "crack cocaine"
that gets in the way of a family's well-being, yet they ensured carve-out
niches for horse racing and state lotteries, something viewed as highly
suspect among the online gambling community. Other politicians likewise
expressed dismay over the attached piece of legislation that appeared
without warning and could not get passed on its own. Some, like Nevada
Representative Shelley Berkley, voiced outrage over the internet gambling
provision's inclusion while Senate Republicans removed other measures from
the "port bill" that would help bolster rail and mass transit security.
Even the original sponsors of the port security bill spoke out against the
internet gambling provision add-on. In the coming days, the online gambling
community is planning a massive protest against Senator Jon Kyl in the state
of Arizona. Dozens of websites focusing on the sector will be publishing a
message alerting Arizona voters and online gambling enthusiasts as to
Senator Kyl's role in trying to abolish internet poker, sports betting an
online casino games while ensuring the protection of his own state lottery.

Many of these sites, including prominent online gambling establishments that
operate outside the United States, will be sending the powerful message to
all of its Arizona customers. One large sports betting firm has disclosed
that based on last year's numbers they had just over 5000 registered users
in the city of Phoenix alone.

"The industry as a whole must take a stand to show how powerful we are and
that politicians with their own self-agendas need to be held accountable for
their actions," said a prominent member of the online gambling community who
is one of many organizing the campaign against Jon Kyl.

It is a campaign that can work. Internet gambling has become a billion
dollar industry that, contrary to popular opinion among some political foes,
fuels the US economy through ad deals, sponsorship events and most notably
works in conjunction with Las Vegas.

"The Vegas casinos once despised our industry. This year they lobbied
heavily to prevent the passage of the internet gambling legislation. It was
once believed that online casinos would negatively affect Las Vegas since
gamblers could now play casino games without leaving the comfort of their
homes. Quite the opposite has occurred. Online gambling has only helped to
fuel interest in Vegas as the ultimate casino gaming experience. It's
really no different than being able to rent movies two or three months after
a film's release. That hasn't stopped the box office from realizing record
breaking numbers year after year."

Over the past few weeks, Jon Kyl has watched a solid lead evaporate.
Democratic challenger Jim Pederson has now closed within 6 percentage points
of Kyl.

"The online gambling community will narrow that gap even further and anyone
who underestimates our influence is in for quite a surprise," predicts the
prominent industry representative. "Nine percent of Arizona voters said
they were undecided and we believe many of these are individuals who love
gambling online and will be inclined to vote against anyone looking to take
away their rights."

The effort on behalf of the internet gambling sector also looks to address
concerns over prohibition that stretches beyond the gaming landscape.

Some lobbyists pushing to legalize electronic gambling machines are finding
a more receptive audience in eastern Indiana where authorities raided more
than 20 taverns accused of violating the law. Indiana Licensed Beverage
Association officials drew about 40 bar and restaurant owners to a meeting
Tuesday. It was one of a series of public meetings around the state to
persuade lawmakers that they should legalize video gambling when the General
Assembly convenes in January. The group's president, Don Marquardt, says
enforcing the law in taverns is driving the video gambling machines into
other venues such as convenience stores, where state excise police lack
authority.

Rev. Frank Dei, who made the disclosure said the consumption of alcohol and
drugs was threatening not only the health and education of the youth, but
also their productivity. The Rev, Minister's observations are borne out on a
regular basis by reports of students and young people engaging in binge
drinking. Just last week, eighteen final-year pupils of Adankwame Basic
School who were allegedly found drunk and engaged in gambling on the school
premises were suspended by the school authorities. They included six girls,
who also reportedly stole large quantity of bread from a nearby grocery in
the company of 12 boys who also engaged in gambling. Mr. John Yidanbla
Tayari, Headteacher of the school told a meeting arranged by the
Atwima-Nwabiagya District Education directorate aimed at finding solutions
to the reported acts of indiscipline at Adankwame. The meeting was attended
by the local School Management Committee (SMC), Parent-Teacher Association
(PTA), unit committee members, chiefs, teachers and other opinion leaders.
Although the culprits' parents had been invited to the meeting, they did not
show up. Mr. Richard Owusu-Agyemang, the District's Community Participation
Co-ordinator, condemned the acts of the pupils and the refusal of their
parents to attend the meeting. He said it was the responsibility of parents
to inculcate moral values and discipline in their children and that the
boycott of the meeting by the parents was not only a mark of disrespect to
the school authorities but also an endorsement of the pupils' indiscipline
acts. He warned that the directorate will not tolerate indiscipline in the
School and urged the chiefs, SMCs and PTAs to help in addressing the
situation.

The unanimous vote kept the bill from going to Gov. Ed Rendell. It also
continued a volley between chambers that has lasted for much of the past
year over how to fix problems identified by critics of the state's
2-year-old gambling law, with one chamber often dropping pet provisions
written by the other. House Majority Leader Sam Smith, R-Jefferson, said he
sympathized with colleagues who were dissatisfied with the Senate's version,
but warned that further revisions could scuttle passage of a final bill
before the legislative session ends Nov. 30. "There's a limit to how many
times we can bounce this ball back and forth across this building," Smith
said. "If we amend this bill, this bill then will be sitting in the Senate
in the lame-duck session, and at that juncture, all bets are off ... as to
whether or not we will actually be able to get a very solid reform bill in
front of this governor this session." Senate leaders were reviewing their
options and expected to announce a plan on Wednesday, said Erik Arneson,
chief of staff to Senate Majority Leader David J. Brightbill, R-Lebanon.
Christopher Craig, a lawyer for Sen. Vincent Fumo, D-Philadelphia, said one
possibility would be "to come back in before Election Day to put together
another version" of the bill. The Senate passed its version of the
gambling-law revisions during a marathon session that stretched from Monday
to early Tuesday as members rushed to complete major business and adjourned
until after the Nov. 7 election. With just two weeks remaining, legislators
were eager to return to their districts to campaign in a volatile election
year. Both houses have agreed to changes that would require the state
Attorney General's Office to form a gambling-crimes unit, wipe out a
requirement that slot-machine manufacturers sell through an in-state
distributor, and delete language in the current law that allows public
officials to directly own up to 1 percent of a gambling interest.

But they have disagreed over many other provisions. The version approved by
the House includes provisions not endorsed by the Senate, such as banning
campaign contributions from applicants for horse racetrack licenses and
requiring casinos to comply with local ordinances banning indoor smoking.

The House version also allows the Legislature, rather than the state, to
decide whether to transfer state-owned riverbed property rights to casinos.

Rep. Kevin Blaum, D-Luzerne, called the absence of a ban on campaign
contributions a "serious, serious flaw."

"If this bill ever did go to the governor's desk and obtained his signature,
it would be open season on unlimited campaign contributions from all those
applicants," Blaum said.

The Senate has consistently supported broad campaign-contribution
prohibitions, and its version of the bill does not allow any gambling
license applicants or licensees to make such contributions, Arneson said.

"It is beyond unfortunate that a nonexistent problem was used as the stated
reason to amend a bill that was ready to be sent to the governor and
included absolutely vital reforms to the gambling law," Arneson said in a
statement.

The House did not change a provision of the Senate bill that would force
casino developers to follow local zoning procedures and allow zoning appeals
to go to the state Supreme Court.

The unanimous vote kept the bill from going to Gov. Ed Rendell. It also
continued a volley between chambers that has lasted for much of the past
year over how to fix problems identified by critics of the state's
2-year-old gambling law, with one chamber often dropping pet provisions
written by the other. House Majority Leader Sam Smith, R-Jefferson, said he
sympathized with colleagues who were dissatisfied with the Senate's version,
but warned that further revisions could scuttle passage of a final bill
before the legislative session ends Nov. 30. "There's a limit to how many
times we can bounce this ball back and forth across this building," Smith
said. "If we amend this bill, this bill then will be sitting in the Senate
in the lame-duck session, and at that juncture, all bets are off ... as to
whether or not we will actually be able to get a very solid reform bill in
front of this governor this session." Senate leaders were reviewing their
options and expected to announce a plan on Wednesday, said Erik Arneson,
chief of staff to Senate Majority Leader David J. Brightbill, R-Lebanon.
Christopher Craig, a lawyer for Sen. Vincent Fumo, D-Philadelphia, said one
possibility would be "to come back in before Election Day to put together
another version" of the bill. The Senate passed its version of the
gambling-law revisions during a marathon session that stretched from Monday
to early Tuesday as members rushed to complete major business and adjourned
until after the Nov. 7 election. With just two weeks remaining, legislators
were eager to return to their districts to campaign in a volatile election
year. Both houses have agreed to changes that would require the state
Attorney General's Office to form a gambling-crimes unit, wipe out a
requirement that slot-machine manufacturers sell through an in-state
distributor, and delete language in the current law that allows public
officials to directly own up to 1 percent of a gambling interest.

But they have disagreed over many other provisions. The version approved by
the House includes provisions not endorsed by the Senate, such as banning
campaign contributions from applicants for horse racetrack licenses and
requiring casinos to comply with local ordinances banning indoor smoking.

The House version also allows the Legislature, rather than the state, to
decide whether to transfer state-owned riverbed property rights to casinos.

Rep. Kevin Blaum, D-Luzerne, called the absence of a ban on campaign
contributions a "serious, serious flaw."

"If this bill ever did go to the governor's desk and obtained his signature,
it would be open season on unlimited campaign contributions from all those
applicants," Blaum said.

The Senate has consistently supported broad campaign-contribution
prohibitions, and its version of the bill does not allow any gambling
license applicants or licensees to make such contributions, Arneson said.

"It is beyond unfortunate that a nonexistent problem was used as the stated
reason to amend a bill that was ready to be sent to the governor and
included absolutely vital reforms to the gambling law," Arneson said in a
statement.

The House did not change a provision of the Senate bill that would force
casino developers to follow local zoning procedures and allow zoning appeals
to go to the state Supreme Court.

Alabama's Supreme Court chief justice race is boiling, with incumbent
Drayton Nabers Jr. accusing challenger Sue Bell Cobb of taking gambling
money, and Cobb claiming Nabers was forced to pull a false ad. The nation's
most expensive state Supreme Court race is getting more expensive. Both
sides in the tight race plan more TV ads for the final two weeks before the
Nov. 7 election. So far, Cobb and Nabers have spent almost $2 million on TV
ads, according to the Brennan Center in New York, which tracks ad spending
in court races nationwide. The candidates promise clean campaigns but accuse
each other of violating the pledges. "The negative ads are going to
continue," said Larry Powell, professor of communications at the University
of Alabama at Birmingham and a former political consultant. "The only
question is: Are they going to continue right up to Election Day?" Tuesday,
Cobb renewed her call for Nabers to sign a State Bar of Alabama committee
agreement on ethical campaigning. She also said she was disgusted by Nabers'
television ads. "The people of Alabama are sick of this and we are, too,"
said her campaign manager, Sabrina Lofton. "We will continue our message of
qualifications and experience, because that's what this race should be all
about."

Nabers' campaign responded by accusing Cobb of violating judicial ethics in
her own TV ads by lying about her opponent. Nabers issued his own pledge to
run an ethical campaign but reserved the right to respond to attacks.

"It is the height of hypocrisy to talk about campaign pledges when they are
knowingly running ads that are untruthful," said Nabers' campaign manager,
Clay Ryan. "We consistently offer hard evidence in our campaign ads. I have
yet to see that from Judge Cobb's campaign."

The man said to be Shanghai's "top gangster" has been sentenced to death for
drug trafficking and other crimes. The Shanghai No. 2 Intermediate Court
found Li Bin, 40, guilty of leading a criminal organization, trafficking in
drugs, organizing attacks and illegally possessing weapons, the Shanghai
Daily reported. It said that Li's wife and 18 members of his gang were
sentenced to prison terms ranging from 15 months to life. Li, who dubbed
himself the city's "top gangster," had spent 15 years in prison when he was
released from jail in 2001 and took over an entertainment center in
Shanghai's suburb of Baoshan, where he operated a gambling and "drug taking"
den, the report said. It said Li's gang took in nearly 3 million yuan
(US$380,000;?304,000) in online gambling proceeds, in addition to his
profits from dealing in illicit drugs.

Rev. Frank Dei, who made the disclosure said the consumption of alcohol and
drugs was threatening not only the health and education of the youth, but
also their productivity. The Rev, Minister's observations are borne out on a
regular basis by reports of students and young people engaging in binge
drinking. Just last week, eighteen final-year pupils of Adankwame Basic
School who were allegedly found drunk and engaged in gambling on the school
premises were suspended by the school authorities. They included six girls,
who also reportedly stole large quantity of bread from a nearby grocery in
the company of 12 boys who also engaged in gambling. Mr. John Yidanbla
Tayari, Headteacher of the school told a meeting arranged by the
Atwima-Nwabiagya District Education directorate aimed at finding solutions
to the reported acts of indiscipline at Adankwame. The meeting was attended
by the local School Management Committee (SMC), Parent-Teacher Association
(PTA), unit committee members, chiefs, teachers and other opinion leaders.
Although the culprits' parents had been invited to the meeting, they did not
show up. Mr. Richard Owusu-Agyemang, the District's Community Participation
Co-ordinator, condemned the acts of the pupils and the refusal of their
parents to attend the meeting. He said it was the responsibility of parents
to inculcate moral values and discipline in their children and that the
boycott of the meeting by the parents was not only a mark of disrespect to
the school authorities but also an endorsement of the pupils' indiscipline
acts. He warned that the directorate will not tolerate indiscipline in the
School and urged the chiefs, SMCs and PTAs to help in addressing the
situation

Lobbyists pushing to legalize electronic gambling machines are finding a
more receptive audience in eastern Indiana after authorities raided more
than 20 taverns accused of violating the law. Indiana Licensed Beverage
Association officials drew about 40 bar and restaurant owners to a meeting
Tuesday. It was one of a series of public meetings around the state to
persuade lawmakers that they should legalize video gambling when the General
Assembly convenes in January. "We don't feel like it's good public policy to
enforce the law only on selected taxpayers," said Don Marquardt, president
of the Indianapolis-based trade group. Enforcing the law in taverns is
driving the video gambling machines into other venues such as convenience
stores, where state excise police lack authority, he said. The trade group
used to have a difficult time finding support for legalized gambling in the
Muncie and Anderson area. "Not everyone has been behind it," Marquardt said.
"(They said) 'Why legalize when illegally we're doing great?'" Then came the
raids last month in which authorities shut down 23 taverns in Madison,
Delaware and Henry counties after an investigation into what police said was
a gambling ring operated by John Neal, a former state Teamsters chief. Neal,
69, of rural Yorktown, remains in jail under a $2 million cash bond. The
legalization proposal would impose taxes - which the state currently doesn't
collect on the illegal machines - and an annual fee of $500 to $1,000.
Counties would split the revenues with the state. Dale Vold, of the Yorktown
American Legion, said he was not sure whether the annual fee in the proposal
made sense for his organization. "I'm trying to figure it out," he said. "We
really don't make very much, and if they want an exorbitant fee, we're not
going to pay to do it."

Gamblers may look over their shoulder now, but experts say a new Internet
gambling ban won't keep bettors from ponying up, just turn them on to
overseas payment services out of the law's reach. "It has put a terrible
scare into people," said I. Nelson Rose, who teaches gambling law at
Whittier Law School. "But it won't by any means wipe out Internet gambling."
The fright swept through the $12 billion industry on the heels of the recent
arrests of two gambling company executives and a new law President Bush
signed Oct. 13 that seeks to ban most online gambling and criminalizes funds
transfers. The law has wiped out billions of dollars in shareholder value of
British companies, leaving the industry's future in doubt as U.S. lawmakers
initially trumpeted they had found a way to halt bets coming from America.
But serious questions remain about whether the legislation can be effective
in stopping U.S. residents from playing poker or betting on sports. The
"Unlawful Internet Gambling Enforcement Act" goes after the money, not the
millions of players, which would be nearly impossible to enforce. It will
essentially try to choke off the way Americans fund their gambling habits,
hoping to prevent the transfer of dollars to the popular Internet sites.
It's also widely understood that the law has online poker in its gun sights,
identifying it as a game of chance something the poker companies dispute.
They believe poker is a game of skill and therefore not subject to the new
rules. But they're fearful nonetheless.
"Their mission is to kill the funding of online poker, and that's what this
law does," said Mike Sexton, who hosts the popular World Poker Tour and has
won millions as a professional player.

The new law comes amid an explosion in online gambling, fueled by the Texas
Hold 'em craze and widespread access to the Internet. In addition, dozens of
Web sites have sprouted up that allow any gambler with a credit card to bet
on any sport they choose, for any amount of money they want.

Congress has passed a provision outlawing payments to Internet gambling
sites by banks and credit card companies. Congress approved a bill to
bolster port security Sept. 30, and attached to this "must-pass" bill is a
special provision that would make it illegal for credit card companies and
banks to transfer funds to online gambling companies. The law has been
described as a "must-pass" after the controversy over a Dubai-based company
controlling some of the country's major ports. Internet gambling has long
been a target of conservatives and, in particular, Republican Majority
Leader Bill Frist of Tennessee. The House passed a similar provision earlier
this year, but the measure stalled in the Senate where Frist supported it.
The bill is currently awaiting President George W. Bush's signature. Bush is
not expected to veto the measure. "I think this is just a smokescreen
because they're afraid of the backlash," senior Jason Rose said. "Instead of
just coming out and passing a law that makes it illegal for anyone under 21
to gamble, they stick it on this port bill because they're scared." In fact,
Internet gambling has been a target of Congressional conservatives for some
time now. Similar measures have been proposed and passed but have always hit
roadblocks in the past. As of late July this year, the House passed a
provision that would have banned online gambling, but the Senate rejected
it. While the bill would make it more difficult for people to gamble online,
there are ways around the restrictions imposed by the bill. Credit card
companies and banks are banned from making direct payments to gambling Web
sites, but services such as the popular NETeller are not expected to be
impacted as of now. The company provides a money transfer service.

It is doubtful that the United States will ever be successful in outlawing
Internet gambling, especially under pressure from the World Trade
Organization (WTO). The WTO has instructed the United States to refrain from
blocking players in the country to use the mostly Antigua-based gambling
sites, located around the Dominican Republic and Puerto Rico.

Most of the companies associated with the industry are based off shore and
thus are exempt from U.S. regulations and laws. This includes both gambling
Web sites and money transfer sites, causing the new legislation to have a
minimum impact on the online gambling business.

"Why should NETeller comply with U.S. regulations?" professor I. Nelson
Rose, author and a leading expert on gambling law, asked. "The U.S. and
state Attorneys General can get court orders preventing ISPs [Internet
Service Providers] from hosting sites that transfer money, but NETeller is
not hosted by a U.S. server. Foreign nations are not usually required to
enforce U.S. injunctions."

It seems that while the bill will make it harder for more casual gamblers to
place their bets online, the majority of more seasoned players will remain
unaffected and any who so desire can still gamble by signing up for one of
these money transfer sites.

The United Sioux Tribes held a special meeting on Thursday to discuss
frustrations with state negotiations over tribal gaming compacts in which a
national media campaign against the state was considered. "I don't think
people across the country are gonna like what the governor is doing in this
state, and I think this should go nationwide," John Peebles, the tribe's
attorney, said during the meeting at the Ramkota. Rounds was invited to
attend the meeting through personal invitation and through a recent
statewide media campaign including a newspaper ad stating, "Governor Rounds,
we've listened to you, why aren't you listening to us? It's time to talk
face to face." Rounds declined the invitation. Currently, the Flandreau
Santee Sioux Tribe's gaming compact with the state is expired, and,
according to tribal attorneys, Rounds and his representatives refuse to
negotiate another compact, which was the premise for this special meeting.
The gaming compact would have automatically renewed if the tribe had not
asked to negotiate a new agreement, which includes 500 new gaming machines
to be used to bring in revenue for other developments including a new
resort, hotel and family recreation center. According to the governor's
press secretary, Mark Johnston, the governor has said he would be willing to
look at a compact if presented with one. Peebles said that during
negotiations that took place in May, the governor was asked to sign a
compact but refused. While considering its options, the tribes had discussed
banding together in opposition to video lottery in response to the state's
actions.

"But they will remain neutral on video lottery. They didn't want to get into
anybody's business," said Clarence Skye, executive director of the United
Sioux Tribes. "But they do want the legislature to say either by resolution
or proclamation that they support these expansions. The governor has refused
to meet with them, he claims he has taken care of that through his
negotiators, and that's not true."

Skye said he received a letter from Rounds' office saying the governor and
his designated compact representatives would not attend Thursday's meeting.

Previous negotiations between these representatives and the tribes have not
gone well.

Those in attendance at today's meeting were outraged by a comment made on
Sept. 20 by John Guhin, a representative from the attorney general's office.

According to Skye, Guhin remarked that the "Indian people of South Dakota
are not citizens of the state."

Guhin said that statement was false.

Peebles said during Thursday's meeting he is less than impressed with the
state's reasons for its unwillingness to negotiate a new contract.

"We are constantly being told by the state that South Dakota is a state of
limited gaming, but we are actually at the top of the list in regard to the
number of gaming machines here," Peebles said. "South Dakota was found to be
third in the nation based on an analysis of lowest population per gaming
position and we were only after Nevada and Montana."

Fred Assam, another tribal attorney, said it is a state statute that
declares public policy will be to preserve free enterprise.

"But if you don't have the capital, which for the tribes is acquired through
gaming machines, you won't have the ability to pay off the debt to develop,
therefore it limits tribal government's ability to expand and build quality
facilities. So their ability to get financing resources and develop
economically is directly related to these short term compacts with the
state," said Peebles. "All we want to do is go to the bank and borrow the
money to build and then pay back the loan, just like everybody else does.
What gives here?"

One tribal representative, Robert Cournoyer, chairman of the Yankton Sioux
Tribe said dealings with the state have been "archaic" and wondered if
economic development was "just for white people".

A year-long investigation into suspicions that a Lafayette was conducting
illegal gambling has ended with the arrest of its owner and manager. State
troopers arrived at Jim's Lounge yesterday with a search warrant and at
least two arrest warrants. Trooper Willie Williams says owner Patti Matthieu
and manager Norma Joubert were arrested on one count each of illegal
gambling. Williams said when investigators arrived they found a game of
bourrDe (Boo-Ray) under way with about 20 participants. All of the players
were held and identified but none arrested. Williams says the problem was
that the house was taking a cut of the pot. The game itself is legal to
play. Trooper say there were three tables inside of the lounge and the games
were being played at least three days a week and sometimes four or five
times. Williams says for each five dollar ante, the house made ten dollars
and for each ten dollar ante the house brought in 80 dollars.

Kansas Gov. Kathleen Sebelius said Thursday that she's flattered to be
considered a viable vice presidential candidate in two years, but for now
she's satisfied focusing on her re-election campaign before the state votes
on Nov. 7. "I'm just focused on the next 19 days," Sebelius said Thursday.
"I think there are incredible opportunities in this state. I am so excited
after having the chance (to) patch together a system that was broken. I've
been so honored to serve as governor and it's always complimentary to have
nice things said about us nationally, but it's really about a great team of
people who have done a lot of work." Sebelius visited with members of the
Kansas City Kansan's editorial staff on Thursday, one of several stops for
her in the Kansas City area, including a ribbon cutting at a new warehouse
at Nebraska Furniture Mart Thursday morning. Speculation about Sebelius
being considered a vice presidential candidate on the Democratic ticket in
2008 and beyond has been heating up nationally as Sebelius rakes in
accolades for her work as governor. But before deciding whether to step onto
the national stage, Sebelius is working to defeat State Sen. Jim Barnett,
her Republican challenger in the gubernatorial race. Sebelius said Thursday
that her opponent is too pessimistic when it comes to the state's economic
outlook. "I get frustrated with his presentation that Kansas is a difficult
place to do business and has a bad economic situation," she said. "First, I
don't think it's accurate. Second, I think it's the worst thing to do as an
ambassador from Kansas. I like to talk about the reality of what's happened
in the last four years and the progress we have made."

On the local front, Sebelius said the state could help Wyandotte County with
an important economic issue: training an available workforce in the eastern
part of the county for available jobs in the west.

"There are definitely training dollars in place," she said, "but what we've
tried to do, and it's been successful in other areas, is try to reorganize a
workforce training program. It puts together community colleges and the
business community with the Department of Commerce. If there are training
needs not being met, we're happy that the Kansas First project is available
to put people at the table and say, 'Where are they missing skills? Who do
we need? How do we recruit them?'"

Sebelius said she "absolutely" still supports the addition of slot machines
at The Woodlands race track in Kansas City, Kan., and hopes someday to see
it become a reality - even though the state legislature has voted the issue
down over a dozen times.

"We have gotten very close," she said. "I tend to be optimistic. I hope
(legislators) continue to hear from their constituents, because when I
travel around the state the input is pretty strong."

She also supports other forms of gambling in the state, including possibly
placing one of two "destination" casinos in Wyandotte County.

"It doesn't make any sense to me that we are shipping hundreds of millions
of dollars to Missouri, and now to Oklahoma, or carting it to Las Vegas,"
she said. "Kansans like to gamble. What we have is all the issues dealing
with gambling but none of the revenue, so I am looking for a legislative
breakthrough that would allow local communities to have a chance to vote."

Sebelius says states need to work together to find solutions for illegal
immigration. She also said employers have a responsibility to follow the
law.

"Some employers intentionally hire illegal workers to beat the competition,
and frankly, that's one of the areas the state can really do something
about," she said. "I think we need to take that seriously. It's unfair to
competition and unfair to workers here in the workforce.

"I think we need a national comprehensive discussion, whether it's talking
about what we're doing at the border or those 14 million who are already
here and who have families here. We need a comprehensive solution. That
isn't
something we can deal with state by state."

When the Kansas Supreme Court ruled earlier this year on the state's
education funding package, some local urban school districts were
disappointed with the ruling. Sebelius said Thursday that local schools
weren't the only ones disappointed, but she also said funding could continue
to get better in the future.

"I don't think there's any question, whether it's the KCK School District,
or Sedgwick County or Shawnee Mission, that they are light years ahead of
where they were," she said.

In Thursday's visit, Sebelius also spoke about the State Board of Education,
embryonic stem cell research, the keys to continued economic growth and
other issues.

The state's slot machine venues have found a way to bypass the state's
prohibition on casino-style table games. They are about to introduce video
gambling that recreates the experience of playing blackjack or poker around
a table. The multi-player machines arrived this week at Delaware Park, Dover
Downs and Midway Slots at Harrington Raceway. They are expected to be put
into service in a few days. The new games allow up to six people to play at
the same time while seated in a semi-circle. The state's Lottery office says
the games enhance the social aspect of gambling, allowing players to
interact.

Four months into the financial year, Sky City Entertainment Group has
forecast flat profits in FY07. The projected profit range of $100-$110
million, essentially flat on the 2006 results, has been affected by weaker
trading conditions, gambling losses and a stronger New Zealand dollar
affecting tax payments. Weaker trading conditions have dragged revenues down
at the Auckland gaming and entertainment complex. The Auckland casino has
also been unlucky on VIP commission table games. The year to date, after
tax results from these games is $9.1 million below what would normally be
expected. The recent strengthening of the New Zealand dollar against the
Australian dollar has the potential, if sustained, to increase the company's
base tax rate for FY07 by up to two percentage points. The projected profit
range for FY07 assumes that a 30 percent tax rate will apply and that VIP
commission play outcomes will return to normal patterns.

Congress has passed a provision outlawing payments to Internet gambling
sites by banks and credit card companies. Congress approved a bill to
bolster port security Sept. 30, and attached to this "must-pass" bill is a
special provision that would make it illegal for credit card companies and
banks to transfer funds to online gambling companies. The law has been
described as a "must-pass" after the controversy over a Dubai-based company
controlling some of the country's major ports. Internet gambling has long
been a target of conservatives and, in particular, Republican Majority
Leader Bill Frist of Tennessee. The House passed a similar provision earlier
this year, but the measure stalled in the Senate where Frist supported it.
The bill is currently awaiting President George W. Bush's signature. Bush is
not expected to veto the measure. "I think this is just a smokescreen
because they're afraid of the backlash," senior Jason Rose said. "Instead of
just coming out and passing a law that makes it illegal for anyone under 21
to gamble, they stick it on this port bill because they're scared." In fact,
Internet gambling has been a target of Congressional conservatives for some
time now. Similar measures have been proposed and passed but have always hit
roadblocks in the past. As of late July this year, the House passed a
provision that would have banned online gambling, but the Senate rejected
it. While the bill would make it more difficult for people to gamble online,
there are ways around the restrictions imposed by the bill. Credit card
companies and banks are banned from making direct payments to gambling Web
sites, but services such as the popular NETeller are not expected to be
impacted as of now. The company provides a money transfer service.

It is doubtful that the United States will ever be successful in outlawing
Internet gambling, especially under pressure from the World Trade
Organization (WTO). The WTO has instructed the United States to refrain from
blocking players in the country to use the mostly Antigua-based gambling
sites, located around the Dominican Republic and Puerto Rico.

Most of the companies associated with the industry are based off shore and
thus are exempt from U.S. regulations and laws. This includes both gambling
Web sites and money transfer sites, causing the new legislation to have a
minimum impact on the online gambling business.

"Why should NETeller comply with U.S. regulations?" professor I. Nelson
Rose, author and a leading expert on gambling law, asked. "The U.S. and
state Attorneys General can get court orders preventing ISPs [Internet
Service Providers] from hosting sites that transfer money, but NETeller is
not hosted by a U.S. server. Foreign nations are not usually required to
enforce U.S. injunctions."

It seems that while the bill will make it harder for more casual gamblers to
place their bets online, the majority of more seasoned players will remain
unaffected and any who so desire can still gamble by signing up for one of
these money transfer sites.

The below quote is from a Gonegambling.com newsletter written by John Abbott, sounds like a really good idea but polititions are so full of themselves I doubt they will even consider it."I believe in free trade and that governments should keep their noses out of what people want to do in the privacy of their own homes. Governments should also keep their greedy interfering little paws off the Internet. Having made my stance clear, I also have to say that I'm a realist and what I have just said I would like to see happen, ain't gotta chance. So, being a realist, I have to make the most of what I have to work with. This brings me to my second suggestion. Incidentally, my second suggestion was much less controversial and generally accepted by most members in chat as being a good idea. As I see it, the real problem the government has with Internet gambling is that they can't get their hands in the cookie jar. They want their share of the money but can't work out how to get it. For years I have been saying that governments of all nations should be licensing, regulating and taxing Internet casinos. Far from forcing the casino business underground, governments should be embracing it and profiting from it. As a business person, I see it as being completely irresponsible and immoral of governments to not profit from something that a large percentage of the population wants to do. How bizarre is this, instead of profiting from Internet casinos and using that money to combat problem gambling or fund schools or hospitals, the government in the U.S. is going to use tax payer money trying to enforce a stupid and pointless law. Anyway, with the thought in mind that the government is stuck on how to get money out of Internet gambling, and probably don't know where to start in licensing or regulating the Internet casino industry, I made the following suggestion to our members...I suggested that the government should license people who want to gamble at Internet casinos. Let's see, how about a yearly license fee of $50 per person? 30,000,000 potential ( U.S.) online gamblers x $50 each is a fair chunk of change. Gamblers could buy their yearly license online and be issued with a receipt number. That receipt number would be required by reputable Internet casinos before the player was permitted to play with them. I'm sure that many reputable Internet casinos would do what was needed to comply with government policy just to get back a share of the U.S market.

Face it guys, the government already has the ability to trace what you have been doing online, so dodging the license fee is not really an option, especially if it is kept at a reasonable amount like only $50. And if you needed your receipt number to deposit with casinos anyway, you wouldn't get far by not paying the license fee. As an added incentive to have online gamblers pay for a license, the government could make any winnings from your gambling exempt from tax. OK. Now I have moved into the realms of fantasy. -snicker-

So what have we come up with?

#1. The government gets its hands into the cookie jar of Internet gambling and gains a massive influx of cash. With casinos requiring a receipt number, and gamblers paying the license fee online, it would require one man and a dog to oversee the licensing business. You couldn't run a business any cheaper. If the government is sincere about helping problem gamblers, they can use all the money received to do so. -snicker- As if that would happen. Of course this license fee idea is not restricted to the U.S. It could apply to any country on earth who doesn't want the problems and hassles of regulating their own own Internet casinos, but does want to profit from their citizens who do want to gamble at Internet casinos.

#2. Internet gamblers are able to gamble at any approved casino from the comfort of their own home. They can gamble knowing that they are playing within the law because they are licensed to do so. In fact, and this thought just came to me, if a Social Security number was required when paying for your license, wouldn't that be proof of identity and rule out any under age gamblers? Huh! What about that? And because you had to provide a Social Security number when buying your license, it stands to reason that your payment receipt number would be clear proof of identity for the Internet casinos and rule out much of the fraud they have to deal with. Casinos would of course be able to automatically confirm license numbers by linking back to the government run license payment site in each country.

#3. Internet casinos would be able to run their chosen businesses as they saw fit and most of all they would be able to plan for the future. They would have stability and no fear of changes to laws under cover of darkness. Internet casinos would also have to treat players properly or risk being taken off the approved government list if enough complaints were issued by players. Once removed from the government approved list, the casino would not be able to check receipt numbers which would open them up to the risk of fraud again. It would also result in an instant decline in players from that country.

So there's my thoughts on what governments of all countries could and probably should be doing when it comes to Internet casinos. Take it for what it's worth, but don't email me complaining that you are from the U.S and already pay enough taxes and would object to paying a license fee. If that's your attitude, then you don't want this problem solved. For a yearly payment of just $50 I have laid out a plan that can make all your troubles go away. You could even get back to the good old days when you could use a credit card to make your deposits and didn't have to find a company like Neteller as a go-between."

St. Thomas' Episcopal Church doesn't tally the same kind of numbers as some taverns or clubs through the sale of tip jars.
But its modest profit still allows the Hancock church to reach out to those in need. St. Thomas' sold $3,365 in tip jars in fiscal year 2006, resulting in a profit of $778. That was among the lowest profit on a lengthy list of establishments, clubs and organizations that sell tip jars. Tip jars are part of the church's occasional basket bingo events. The church uses some of the money for outreach programs such as Christmas for Others, which includes a party and gifts for less fortunate families, said the Rev. Allan Weatherholt, the church's rector. "It really does help the fundraising effort," Weatherholt said. "It's obviously very helpful to the church's income." For the county as a whole, tip jar gambling remains a thriving business. Clubs, taverns, liquor stores and nonprofit groups sold $72.9 million in tip jars in fiscal year 2006, resulting in a gross profit of $12.4 million. In fiscal year 2005, $71 million in tip jars was sold with a gross profit of $12.5 million.
The amount the clubs, businesses and nonprofits keep ends up being less than the gross profit, because state law requires a contribution to the county's gaming fund. The groups and businesses must also pay for the jars. Nonprofits contribute 15 percent of the gross profit to the gaming fund, and establishments such as taverns and liquor stores contribute 50 percent, Gaming Director James B. Hovis said. The county distributes the gaming fund to local nonprofit groups. In fiscal year 2006, the amount distributed was $2.88 million. Of that amount, half went to the Washington County Volunteer Fire and Rescue Association, and the remaining money went to 83 charitable organizations. The county is required by state law to give half of the gaming fund to the Fire and Rescue Association. Hovis said the gaming fund was down 4 percent compared with last fiscal year, when the Gaming Commission distributed a little more than $3 million.

The slight downturn could be a result of a higher cost of living, he said.

Since the county's gaming program began in 1995, the Gaming Commission has distributed more than $31.5 million to charitable organizations, Hovis said.

Without tip jars, the Williamsport Moose Lodge 2462 would have a hard time making ends meet, Administrator Mike Little said.

The lodge sold $837,906 in tip jars in fiscal year 2006, resulting in a gross profit of $93,201.

Of that, the club paid 15 percent to the county's Gaming Fund and was allowed to keep what remained.

The lodge uses the money for repairs and other expenses.

"It helps us run the lodge," Little said. "If we didn't sell these, we wouldn't make it."

Sportingbet has warned that the US is encouraging the creation of a black market through its online betting ban, after announcing it is taking a hit of £210m on the sale of its business Stateside. Announcing its annual results this morning, the UK-based firm said its profits had risen by 75% to £71.5m, but that next year's conditions will be very different following the legislation's approval by president Bush last week. Of the £303.3m in gross profit Sportingbet generated in the year to the end of July, £196.7m came from US-based users, which the firm said made up 56% of its customer base. Last Friday the company sold its US operations to an Antiguan company for just $1. It now says it is focusing on Europe and the rest of the world. Nigel Payne, Sportingbet's executive director, said there was "little sign" that governments would embrace its call for international online gambling rules. "The Board has continued to lobby for the adoption of consistent and transparent policies promoting the benefit of proper regulation. "However this year has seen a fragmentation of the Group's efforts, with many governments compromising this policy for various motives, be they fiscal protectionism or political gain." Passed through Congress in September, the US' ban requires banks, credit card companies and other 'financial transaction providers' to block internet bet payments. Sportingbet said the act defines 'unlawful internet gambling' as that which is 'unlawful under any applicable Federal or State law in the State or Tribal lands in which the bet or wager is initiated, received or otherwise made'.

The company said this definition was "somewhat ambiguous", adding that the legislation would "serve only to drive the industry underground and compromise the 'social responsibility' objective that is stated as the driving force behind the legislation."

It also said that following the closure of its Paradise Poker business to US customers, its remaining customers may also migrate to 'black market' services.

"Following the significant fall in total customers now able to play at Paradise Poker, this revenue may potentially be at risk if significant numbers of these customers now seek larger, more liquid "black market" poker rooms. The Group will have a better idea of whether this will have a material impact or not as the year unfolds."

Beyond the exceptional costs of £200m associated with its exit from the US, Sportingbet said it would have to pay out £10m for restructuring, including possible redundancies among its workforce of 350 staff. It previously had 850 employees.

E-wallet company Neteller issued a statement announcing a modification in their policy toward Unlawful Internet Gambling Enforcement Act (UIGEA). The company, which processes a significant amount of the online poker, and online gambling transactions from the U.S. indicated they are going to abide by the rules of the act, but will continue to do business as usual until the rules of the act are written by the Treasury Department. The Treasury Department has a 270 day window to issue the rules by which the financial providers must adhere to. "NETELLER, a company registered outside the US, will comply with the Act and its related regulations as if it were subject to the Act's jurisdiction. This action is intended to ensure that the  Company is able to continue to operate with the support of its principal commercial partners and to protect its shareholders, business partners, employees and reputation." The company said in its statement. However, the company also said it will continue to conduct business as usual with U.S. customers for the 270 day window, or until the rules are clearly defined. "In the interim, US-resident customers are able to use the NETELLER service as normal. The funds of US-resident customers are held in trust accounts and will be available for withdrawal, on demand. The ability to withdraw funds will exist regardless of the customer's location or ability to transfer to any site." The rules in the UGIEA are not yet clear as to what responsibilities non-U.S. based companies like Neteller would have. However, if the company views itself as a U.S. financial institution for the purposes of this act, one would assume the company would have to stop taking transactions from U.S. based customers that direct toward online gambling companies.

If, as it turns out Neteller would stop doing business with U.S. customers, it could have a devastating impact in the short term on the players abilities to fund accounts. Certainly, solutions will pop up to give players options to fund online gambling accounts, but many of these new solutions may not have the financial stability and reputation of a publicly traded company like Neteller.

Some in the gaming community see this as a natural action, with Neteller simply announcing they are going to comply with any rules before they actually have to be bound by the statement, in an effort to not fly in the face of U.S. authorities.

Stay tuned to PokerNews.com for more updates on the legislation, and reaction from the companies and people affected by this pending law.

Speaker Boris Gryzlov has announced that the State Duma is set to consider the first reading of a new bill that would push the bulk of Russia's gambling halls into four Las Vegas-style "colonies." Gryzlov, reacting to President Vladimir Putin's initiative and subsequent suggestion that his gambling bill be approved as soon as possible and without obstruction, on 17 October predicted that the Duma would overwhelmingly approve the measure. The third and final reading, Gryzlov predicted, could come as soon as November. During the course of an October 4 meeting with the heads of Duma factions in which he outlined the lower house of parliament's top priorities, Putin pulled no punches in criticizing the country's gambling industry. Equating Russia's gaming addiction with the serious "material and moral damage" inflicted by alcoholism, Putin said severe measures were in order. To this end, he presented the lawmakers with his new bill. It calls for the federal government to reimpose state regulation over gambling, and to sweep small-time casinos and slot machines from the streets of Russian cities. Instead, the gambling industry would be concentrated by 2009 into four regional gaming colonies -- two in European Russia, one in Siberia, and one in the Far East. His bill, however, does make a provision for another type of gaming zone that would allow regional and municipal authorities to oversee smaller gambling centers on their territory, albeit under very restricted and specific conditions.

Many observers linked the timing of Putin's initiative to Russia's political crisis with Georgia. This argument followed on the shuttering of four large casinos in Moscow with ties to ethnic Georgians.
 
But a more likely scenario is that Putin merely saw the opportunity to use the Georgian crisis to his advantage. In regaining state oversight of the gambling sector, he could take control one of the most rapidly growing and problematic sectors of the Russian economy. In addition, the Kremlin could also benefit by using the growing antigambling movement as a populist platform ahead of the 2007-08 parliamentary elections.

Gambling in Russia was relatively underdeveloped in the 1990s, when the country was making the transition to a market economy and the majority of its citizens were too poor to take an interest in games of chance. But the situation changed radically by 2002, as rising oil revenues began to trickle down to ordinary Russians. This phenomenon coincided with the state's relinquishing of control over gambling to the State Sports and Tourism Committee and to regional and municipal governments.
 
In anticipation of huge tax revenues, local authorities issued gambling licenses very liberally and ushered in a period of exponential growth. Some estimates have placed the number of slot machines in Russia today at 400,000 or even 500,000, compared to 70,000 one-armed bandits in 2003. Combined, the major U.S. gambling centers of Las Vegas and Atlantic City have only about 280,000.
 
Slot machines are everywhere in Russia -- they are a common sight in railroad stations, grocery stores, clinics, at bus stops, and community centers. As for more traditional settings, Russia's 5,000 casinos are more than double the number found in the United States.
 
Moscow accounts for the lion's share of the country's $6 billion gambling business, boasting 56 casinos and 5,000 slot halls with some 56,000 slot machines. Another 9,000 slot machines can be found on the streets. In the wake of Putin's initiative, Mayor Yury Luzhkov publicly touted Moscow's plans to have just 540 casinos and gambling centers in operation by the end of the year.
 
Gambling is also pervasive in the provinces. Channel One television reported on October 8 that there are more than 2,000 gambling centers in Vologda Oblast's Cherepovets -- a city of just 300,000. On a smaller scale, Volga Oblast's Krasnoye has 10 slot halls to serve its 9,000 residents.

Ontario is looking to quash Internet gambling by introducing a bill today that will ban such Web sites from advertising, a move legal experts say oversteps the province's authority. Gerry Phillips, Minister of Government Services, will table a bill of amendments to Ontario's Consumer Protection Act, including a section aimed at banning media organizations from running ads by gambling Web sites. The primary driver behind the legislation is the dramatic rise in Internet gambling addiction among teenagers, according to ministry spokesman Paul de Zara. A recent survey by the Responsible Gambling Council found that addiction among people aged 18 to 24 rose 400% between 2001 and 2005. "The addiction rates for children are pretty startling," Mr. de Zara said. The legislation is only targeting illegal sites -- namely those that take money bets -- and will exclude "for-fun" sites. Mr. de Zara said all Web sites that take money bets from Canadians are illegal under the Criminal Code because the provinces have exclusive authority over all forms of gambling. "You can't advertise something that is illegal," he said. "We don't let drug dealers advertise crack houses." Mr. de Zara said the government's secondary motivation was to stem the outflow of gambling money from the coffers of provincially approved, taxed and regulated organizations to Web sites that are generally not based in Canada. The legislation is based on a similar private member's bill introduced by MPP Jeff Leal this year, which was supported by Woodbine Racetrack, and follows a major U.S. crackdown on Internet gambling last month. The U.S. Congress passed a bill banning financial institutions and credit card companies from taking payments from U.S.-based bettors, effectively crippling the industry there. Legal experts say the U.S. and Ontario actions are similar in that neither government has made Internet gambling illegal outright, but both have put a chill on the industry through indirect moves against it. John Tuzyk, a partner at Blake, Cassels & Graydon specializing in gaming law, said Criminal Code violations are a federal matter, and Ontario's attempt to regulate online gambling through the Consumer Protection Act will add to what is already a legal grey area.

"It begs the question about whether the activity itself is illegal," he said. "They're kind of implying it's illegal, but to be convicted of breaching the [Consumer Protection Act] they would still have to show that Internet gaming is illegal, which has not been definitively established in Canada yet."

Danielle Bush, a partner at McCarthy Tetrault, which represents several large media companies, said the legislation would introduce uncertainty for those firms and put an unfair onus on them to decide which ads may or may not be illegal. She also objected to the government's stated moral purpose.

"They're overstepping their bounds somewhat," she said. "You simply can no longer say that gaming and gambling are an evil that should be eradicated. You can't take that position and continue to offer the services yourself."

Even though President Bush has signed a law to curb Internet gambling, investors in the handful of U.S.-listed Internet gambling companies may not want to fold their hands just yet. "There is growth in this industry even without the US," said Blackmont Capital technology analyst Wojtek Nowak. "The drive into broadband Internet in Asia and Europe still makes this an interesting sector." Investors fled Nasdaq-listed companies such as Cryptologic, a Canadian maker of software used by Internet gambling sites, and GigaMedia, a Taiwan maker of gambling software, after Congress passed the Unlawful Internet Gambling Enforcement Act September 30. The legislation signed into law by Bush on Friday makes it illegal for U.S. banks and
credit card companies to settle transactions for patrons of Internet gambling sites. Most publicly traded companies that operate online gambling sites immediately announced plans to abandon the U.S. market to focus on other regions. "That is where growth will have to come from," Nowak said, naming also Eastern Europe and South America as regions for potential growth. Online gambling is expected to expand to a us$ 15 billion industry this year from us$ 12 billion in 2005, according to DesJardins Securities analyst David Shore, who cited statistics from Global Betting and Gaming Consultants. While the US market accounts for half the Internet gambling market, online betting equaled less than 4 percent of the estimated us$ 260 billion global land-based gambling market, Shore said. Analysts assume the preponderance of American bettors online has more to do with easy high-speed Internet access - which enables the fast transmissions needed to load data from the flashy sites - than a lack of gambling culture in the rest of the world. The United States has 36 percent of all broadband connections in the 30 member countries of Organization for Economic Cooperation and Development, according to an OECD report released Friday. But Europe, in particular is catching up. In Asia, Korea and Japan have high rates of broadband penetration, but China, the largest nation by population, lags.

As the rest of the world continues to improve Internet access, Nowak said, the online gambling sites will meet with a larger audience. "The Internet is a good medium for gambling," he said. "It assures privacy and you can conduct it from the comfort of your home."

Besides, gambling is generally illegal in China, for example, and Japan only allows bets on a few types of activities, such as horse racing. In Europe, instead of banning Internet gambling, some countries are trying to regulate and tax the industry. Austria and Italy have taken steps to allow domestic online gambling. And the European Commission has indicated that private online gambling sites cannot have less access to bettors than the state-run lottery monopolies that generate billions in tax revenue for most European countries.

Among them are U.S.-listed Cryptologic. With enactment of the law, the company lost about us$ 30 million in revenue in the United States, or a quarter of its total, which it will seek to replace in Europe and Asia. Nowak said that could take up to five years. "It's going to grow at 20 percent a year, but that's a lot to recover," he said, and added: "Crypto is growing nicely in Europe and that market is going to expand."

PUBLISHING & Broadcasting Ltd executives spent Monday putting the finishing touches to plans to spin off the company's media assets, but executive chairman James Packer was not orchestrating proceedings from his Park Street headquarters. Mr Packer was on the Singaporean resort island of Sentosa helping present his consortium's bid to build a $US3.5 billion ($4.7 billion) casino/resort complex on the very spot on which his makeshift office was standing. Physically and metaphorically Mr Packer was in the new world of gambling that PBL is building for itself overseas, while plans were being finalised at home to spin off what his father, the late Kerry Packer, once regarded as the family's crown jewels. Mr Packer has already secured wins in Macau that will completely transform the company even if it loses out to one of the two rivals in contention to build Singapore's second casino resort. PBL, and its Asian partner Melco International, have three casino/resort properties under development in Macau and funding requirements are estimated to be $US3 billion. Just last week PBL transferred the $US900 million licence it acquired early this year to its joint venture with Melco. The licence allows the partners to build and operate as many casinos in Macau as they like, giving them free rein in a market that is expected to overtake Las Vegas this year in terms of gambling revenues. The above figures give some idea of why PBL might need to spin off its media business and build a war chest. But given plans to float part of the Melco venture on the Nasdaq stock exchange for $US1 billion some time next year - and that the venture has been successful at financing the current projects with large amounts of non-recourse bank debt - the media spin-off might indicate there is more in the wings. Broker UBS said yesterday it expected PBL would actively pursue opportunities in other countries that were relaxing their regulatory environment and allowing casinos for the first time. Japan, Thailand, Vietnam and Taiwan are considered to be the most attractive among them.

"A sale of the more mature media assets would give PBL the flexibility to pursue these other options," said UBS analysts Nola Hodgson and Simon Smiles.

"However, if this is the primary motivating factor, we would expect there must be some additional larger-sized opportunities for PBL, as we believe that the group's current balance sheet is comfortably strong enough to fund the already announced plans," they said.

A roster of 130 "electronic games of skill" — with names such as Sizzling 7 's, Double Black Tie and White Hot Aces — met with Arkansas Racing Commission approval Monday for installation at the state's two pari-mutuel racetracks. The gambling games join seven others the commission accepted last month, for a total authorization of 137 variations of video poker, blackjack and Lock 'n Roll at the Oaklawn Park thoroughbred racetrack in Hot Springs and the Southland Park greyhound venue in West Memphis. Delivery of some machines will begin as early as this week. Both tracks plan grand openings for their "games of skill" Nov. 18, representatives of Southland and Oaklawn told commissioners during a conference-call meeting in Little Rock. As a prerequisite to gaining the commission's OK, the gambling games passed muster with New Jersey-based Gaming Laboratories International Inc., the consultant hired by the state to ensure that the devices conform to state regulations.
Most of the machines offer video poker or blackjack. But one, PokerPro Electronic Poker Game, simulates a table game of poker in which each player is dealt electronic cards on a video monitor. Lock ' n Roll is similar to video-poker games: After the machine's cylinders spin once, players can lock in one or two images before spinning again, said Danny Walker, administrator of the office of field audit for the electronic games of skill section of the Arkansas Department of Finance and Administration. "They use different images — they may use numbers or they may use symbols — and the basis of the game is to match as many symbols as you can across the line you are playing, with the more items being better," Walker said.

Southland is undergoing a $ 40 million remodeling and renovation at the nearly 50-year-old track to make room for the new games. The track also added a nightclub and a buffet, Barry Baldwin, president of Southland Park greyhound track, said in a telephone interview after the meeting.

The track plans to install 819 electronic gambling machines and has already hired 244 new employees to help service the new gambling attraction, Baldwin said. The track will likely have a "soft opening" a week or so before the grand opening — or earlier if staff training is complete — to make sure everything is functioning properly, he said.

"It is much more in-depth training than anything we imagined," Baldwin said. "But it's looking good."

Oaklawn has submitted a proposal for 125 devices, with plans to add more machines as space becomes available after the 2007 live thoroughbredracing season, scheduled for Jan. 19-April 14.

Oaklawn also plans a "soft opening," a few weeks before the Nov. 18 grand opening, said Bobby Geiger, director of wagering and simulcast at the track.

A state law, Act 1151 of 2005, authorized special elections in Hot Springs and West Memphis on whether Southland and Oaklawn could seek Racing Commission approval for adding "electronic games of skill." Voters in both cities gave the tracks the go-ahead in elections last November.

Both the state law and Racing Commission regulations define the new gambling games as those "played through any electronic device or machine that afford [s ] an opportunity for the exercise of skill or judgment where the outcome is not completely controlled by chance alone."

Some residents of the tracks' home counties, Crittenden and Garland, filed postelection lawsuits challenging the constitutionality of Act 1151. The Family Council Action Committee, a Little Rock-based anti-gambling group, supported the plaintiffs. The committee contends that "electronic games of skill" are slot machines and that the racetracks will become casinos after installing them.

Circuit judges in both counties rejected the lawsuits. The decision in Garland County was appealed to the Arkansas Supreme Court.

After the machines arrive, the microchips that operate the games will be sent to the Finance and Administration Department's games of skill section, Racing Commission manager Shelby McCook said.

State employees will deliver the microchips to the tracks, where representatives from Gaming Laboratories International and the game makers will install the chips in the machines, after which they will be tested to make sure they are operating properly, McCook said.

Commission regulations require that at least 83 percent of what is wagered in the new machines be paid back to gamblers, but both tracks expect their devices will be programmed to return more than 90 percent to be competitive with casinos in neighboring states.

The tracks will get 65 percent of what's left after payout. The remaining distribution of this "net wagering revenue" will be as follows: 18 percent to the state, 14 percent to prize purses, 1. 5 percent to the city in which the track is located, 0. 5 percent to the home county and 1 percent to the Racing Commission for promotion of thoroughbred or greyhound breeding.

According to reports the bill, passed in congress on Friday, bans internet gamblers from using credit cards, checks and electronic fund transfers to settle their wagers in the US, and is part of a larger bill aimed at bolstering US security.
Aljazeera, a news agency, said US analysts believe the industry is one of the most lucrative online markets in the world which is a blow to the growing online gambling industry. The reports revealed that Sportingbet PLC and Leisure & Gaming PLC both sold their US operations for $1 hours before the law was passed.  "World Gaming PLC directors resigned, leaving the company in the hands of administrators. Rival Leisure & Gaming has followed suit, selling its US operation to a new firm set up by its chief executive". "PartyGaming PLC, the world's largest gambling company, said it had suspended all real money gaming activities to customers in the US".  "Empire Online PLC said it would focus on gaming outside the US, while 888 Holdings PLC said it was considering its options," said Aljazeera. According to the media the loss of US business is crippling - US residents account for half a market that is estimated to be worth $15.5 billion this year in "spend" value, according to the Betting Research Unit at Nottingham Business School. "The spend value is the amount gambling companies win from their clients - or the amount gamblers lose - and is much less than revenue because most of the revenue is recycled to gamblers in the form of winnings," reported Aljazeera. Analysts said the industry is now moving in two directions. On one side are the London-based companies which are ending their US bases.

The other is private offshore companies which find it easier to reach US customers through third parties and which are keeping their US businesses.

One such company, Costa Rica-based, Canadian-licenced VegasPoker247, expressed its confidence when it said that it would be able to continue offering online games for money.

"All players' funds are completely secure and we are exploring every available depositing option with our existing payment processors," the company was quoted.

Although US residents account for more than half of the business of online casinos, no major companies are based there because the US has, since 1961, prohibited using telephone transmissions to bet across state lines.

Gambling promoters are putting at least $13 million on the line to see if Ohio voters will welcome slot machines on Nov. 7, the third proposal since 1990 to expand gambling. Voters that year and in 1996 refused almost 2-to-1 to allow casino gambling in some Ohio cities. Backers are optimistic they will fare better this year. Despite the opposition of statewide officeholders and the two candidates for governor, they point to the money that's left the state since casinos opened in Indiana and Michigan and slots debuted in West Virginia since the mid-1990s. Two other issues on the statewide ballot would regulate where people could smoke, and one would raise the state's minimum wage by $1.70 to $6.85 an hour. A fifth issue would stop changes in Ohio's workers' compensation law from taking effect, but it was in a court battle to stay on the ballot. Passage of state Issue 3 would place up to 31,000 slot machines at Ohio's seven horse-racing tracks and two free-standing parlors in downtown Cleveland. Its primary backers are the racetrack owners and the two Cleveland developers who would build the parlors. They estimate they would take in $1.5 billion each year. The rest of the money would go to college scholarships, local governments and gambling addiction services. Proponents say the gambling also would bring 17,000 permanent jobs and 20,000 construction jobs to the state. Opponents say passage of the issue would lead to deterioration of the neighborhoods surrounding the parlors and ruin the families of thousands of Ohioans who would become addicted to gambling. Backers say opponents are being hypocritical in trying to keep gambling in check while the state lottery - authorized by voters in 1973 - and charity bingo and casino games are permitted.

"A lot of the arguments have been from politicians who proposed Mega Millions (multi-state lottery). That was (Gov.) Bob Taft, yet he opposes our proposal," said Linda Siefkas, spokeswoman for Ohio Learn and Earn, the coalition of track owners and developers.

As with the lottery and the 1990 and 1996 proposals, the lure for voters is education. Issue 3 backers are promising $850 million a year in scholarships for Ohio high-schoolers who go to in-state colleges.

The Ohio Office of Budget and Management said the slots backers' projections are too high. The office said the state could support only one-third as many machines, raising $324 million annually for scholarships.

Gambling revenues are unpredictable because of fluctuating employment rates, the economy and other outside factors, said David Zanotti, president of the conservative Ohio Roundtable who also fought the earlier gambling proposals.

"If you link gambling to vital services, you're going to be disappointed," Zanotti said. "The problem still is the numbers."

Passage also would help others trying to expand gambling in Ohio, especially the Eastern Shawnee, an American Indian tribe that is negotiating land deals in several communities to build casinos if it ever should get state and federal approval to do so. By opening slots parlors, Ohio's status as a state that permits gambling would be elevated above its current lottery-and-bingo category to one that permits casino-style games.

Siefkas argues that passage of Issue 3 wouldn't give Indian tribes more flexibility to set up casinos - they could do it now if they had land and were recognized by the government, she said. Issue 3 simply expands the definition of what's allowed in Ohio to include slot machines.

The backers say they're ready to spend at least $13 million on the campaign. Zanotti said the opponents are shooting for $3 million, but noted that his side won twice before despite being badly outspent.

In 1996, would-be casino developers spent more than $8 million, while opponents spent just over $1 million.

Voters also will be asked to settle the contentious issue of smoking in public buildings. Issue 5 would ban smoking in nearly all buildings outside the home, while Issue 4 would exempt bars, bowling alleys, bingo halls and racetracks and would allow restaurants to set aside enclosed spaces for smokers. Those venues still would be allowed to ban smoking if they wished.

If voters approve both issues, the less restrictive issue would be prevail because it changes the Ohio Constitution, while Issue 5 simply changes state law.

The minimum wage increase and the slots proposal also would amend the constitution, meaning more ballot issues would be required to undo them.

Issue 2 would raise Ohio's minimum wage from $5.15 an hour to $6.85. Backers - largely unions - say the increase would give a lift to Ohio's working poor. Opponents - mostly business groups - say it would place a burden on small business struggling to become profitable.

We have no intention of stopping any of our US customers. The bill passed
does not make it illegal for you to bet or for us to accept bets, so it will
be business as usual. The vast majority of all deposits processed by our
company are processed through non US payment processors. It is currently
unclear how these payment processors, based outside the United States, with
no assets, presence or employees in the US, would be affected by this bill.
We wish to reassure our members that at this time, XXL Club Casino continues
to operate normally and we remain committed to delivering the best quality
and state of its class services that our players expect from us. Please feel
free to contact support at any time if you should require assistance
regarding any matter.

As reported by Trinidad and Tobago's Newsday: "Prime Minister Patrick
Manning yesterday told protesting private members clubs and casino workers
that Government stands firm on its opposition against casinos and
casino-type establishments and the local gaming industry will be
restructured so it complies with the law. "Prior to speaking with Manning,
the club owners said Government should take any information it had about
gaming establishments being involved in money laundering, to the police.
"Under the watchful eyes of the police, nearly 1,000 private members clubs
and casino workers assembled outside Whitehall around 9 am to protest
Manning's anti-gambling statements in his October 4 Budget presentation in
Parliament. "Many of them, wearing 'PNM voter' shirts shouted chants of 'no
work, no vote' as they demanded an audience with Manning and for Government
to protect their jobs. The Prime Minister arrived at Whitehall around noon
and briefly met with the workers..."

Federal Reserve Chairman Ben Bernanke said Monday that bank regulators
should search for ways to reduce regulatory burdens imposed on the financial
system in the government's efforts to battle terrorist financing and money
laundering. There are some who believe Bernanke's comments apply to a
recently signed bill that would hold banking institutions responsible for
monitoring and prohibiting online gambling transactions. The banking sector
has already expressed disappointment with the new law, insisting there is no
way they can implement such a system without allocating billions of dollars,
and even that may not be enough to make monitoring full proof. Experts point
out that few if any online gambling enterprises - all of which operate
outside the US - identify their businesses to banking institutions as online
gambling establishments. Some routinely chance corporate names while
utilizing third party processors based in numerous other countries.
"Deterring and identifying misuse of the financial system, as important as
that is, should not be so onerous that it stifles innovation ... or reduces
the international competitiveness of U.S. banks," Bernanke said in remarks
prepared for the annual conventions of two banking groups. He said the
central bank was determined to work to streamline the reporting processes
required by the Bank Secrecy Act "without diminishing the value to law
enforcement of the information produced."

The Bank Secrecy Act, passed in 1970, is the government's main tool in the
fight against money laundering by drug traffickers and other criminals.
Since the 2001 terrorist attacks, it has been increasingly used to halt the
flow of financing to terrorist organizations.

Bernanke delivered his comments by satellite to separate conventions of the
American Bankers Association in Phoenix and America's Community Bankers in
San Diego.

"We are ever mindful that banks and their customers bear a large share of
the costs of regulation," Bernanke said. "Minimizing the regulatory burden
on banks is very important."

In his remarks, he made no mention of the current state of the economy or
what the Fed might do when officials meet on interest rates next week.

Bernanke said it was important for the banking industry to have the
opportunity to get feedback from regulators on the usefulness of their
reports on suspicious activity as well as guidance on ways to better
identify the most significant risks.

"Efforts to further increase feedback would help banks allocate their
compliance resources more efficiently while complying with the act and
preventing misuse of the financial system," Bernanke said.

He said it was also important for banks to have effective channels to voice
their concerns about burdens imposed by the secrecy law or the lack of
clarity in the regulations they are supposed to enforce.

Bernanke said the Fed was also exploring ways to reduce regulatory burdens
in the implementation of new rules on capital requirements and in the
Community Reinvestment Act, which seeks to boost lending in poor
neighborhoods.

AUSTRALIAN online gaming company Betcorp has suspended its United States
operations after the enactment there of restrictions that effectively ban
some forms of internet betting. Melbourne-based Betcorp said it had
suspended its US operations after the Unlawful Internet Gambling Enforcement
Act of 2006 was signed into law by US President George Bush. The act makes
it illegal for US banks and credit card companies either to take payments
from or make payments to online gambling sites. Betcorp said it had
"suspended the accounts of United States residents with immediate effect",
in response to the enactment of the new gambling regulations. "The group
continues to trade with residents of 87 other countries in which it has
customers," the company said. The company is also listed on the London Stock
Exchange's small cap AIM exchange, and is set to delist from the Australian
exchange this month in order to concentrate on its British operations.
Betcorp said it was "unable to sell its US operations prior to the act
coming into force", given that both the ASX listing rules and AIM's rules
require that any such transaction be conditional upon shareholder approval.
Last month, Betcorp decided to stop accepting telephone bets from US
customers, citing regulatory uncertainty.

Even though President Bush has signed a law to curb Internet gambling,
investors in the handful of U.S.-listed Internet gambling companies may not
want to fold their hands just yet. "There is growth in this industry even
without the United States," said Blackmont Capital technology analyst Wojtek
Nowak. "The drive into broadband Internet in Asia and Europe still makes
this an interesting sector." Investors fled Nasdaq-listed companies such as
Cryptologic Inc., a Canadian maker of software used by Internet gambling
sites, and GigaMedia, a Taiwan maker of gambling software, after Congress
passed the Unlawful Internet Gambling Enforcement Act Sept. 30. The
legislation signed into law by Bush on Friday makes it illegal for U.S.
banks and credit card companies to settle transactions for patrons of
Internet gambling sites. Most publicly traded companies that operate online
gambling sites immediately announced plans to abandon the U.S. market to
focus on other regions. "That is where growth will have to come from," Nowak
said, naming also Eastern Europe and South America as regions for potential
growth. Online gambling is expected to expand to a $15 billion industry this
year from $12 billion in 2005, according to DesJardins Securities analyst
David Shore, who cited statistics from Global Betting and Gaming
Consultants. While the U.S. market accounts for half the Internet gambling
market, online betting equaled less than 4 percent of the estimated $260
billion global land-based gambling market, Shore said.

Analysts assume the preponderance of American bettors online has more to do
with easy high-speed Internet access -- which enables the fast transmissions
needed to load data from the flashy sites -- than a lack of gambling culture
in the rest of the world.

The United States has 36 percent of all broadband connections in the 30
member countries of Organization for Economic Cooperation and Development,
according to an OECD report released Friday. But Europe, in particular is
catching up. "The strongest per-capita subscriber growth comes from Denmark,
Australia and Norway," the report said.

In Asia, Korea and Japan have high rates of broadband penetration, but
China, the largest nation by population, lags.

"The difficulty with China is that a fragmented financial system has kept
operators away," Nowak said. "But in general, software companies are looking
to Asia as potential growth market."

As the rest of the world continues to improve Internet access, Nowak said,
the online gambling sites will meet with a larger audience.

"The Internet is a good medium for gambling," he said. "It assures privacy
and you can conduct it from the comfort of your home."

That is not to say there will not be other hurdles. Gambling is generally
illegal in China, for example, and Japan only allows bets on a few types of
activities, such as horse racing. In China and other developing nations,
cash is still king, so although gambling is part of the culture, some
bettors may be wary of paying online.

In Europe, instead of banning Internet gambling, some countries are trying
to regulate and tax the industry. Austria and Italy have taken steps to
allow domestic online gambling. And the European Commission has indicated
that private online gambling sites cannot have less access to bettors than
the state-run lottery monopolies that generate billions in tax revenue for
most European countries.

"They are taking the opposite approach in Europe and it's going to be an
opportunity for growth for the companies that have activities there,"
DesJardins' Shore said.

Among them are U.S.-listed Cryptologic. With enactment of the law, the
company lost about $30 million in revenue in the United States, or a quarter
of its total, which it will seek to replace in Europe and Asia. Nowak said
that could take up to five years. "It's going to grow at 20 percent a year,
but that's a lot to recover," he said.

Shore expects the company to struggle for a year before recovering. "They're
losing a lot of revenue, but so far haven't said how they will reduce costs,
so profits are going to suffer," he said. "Crypto is growing nicely in
Europe and that market is going to expand."

GigaMedia, whose shares are listed on the Nasdaq, recovered most of its
share-price losses after the company assured investors it generates no
revenue in the United States. From its beginning, GigaMedia shunned the U.S.
market for Asia and Europe because it worried legislators would outlaw the
sector.

"I would argue that those companies that expunged their U.S. exposure are
now lower-risk investments," Nowak said.

Brisbane-based online gambling company Global Approach's share price has
slid a further 7% today despite assuring investors it is renewing its focus
on European and Asian markets. The share price has slipped 60% since
September 11 to 4 cents, and a $2.1 million net profit projection for 2007
is "unlikely to be achieved".
The company has now announced a major corporate restructure, with directors
taking "sizeable salary cuts" to offset new US laws. The laws prohibit the
processing of transactions from US customers. Global Approach is also
considering merger and acquisition options. According to Global managing
director James Canning-Ure, the US market makes up to 50% of net gaming
revenues. "We plan to offset any potential revenue loss by continuing our
expansion into the European and Asian markets," Canning-Ure says.
"Fortunately our company's global approach means we have not relied upon the
US market and therefore continue to have excellent growth prospects going
forward. The company has recently launched a Japanese-language site, as well
as a UK-focused casino brand.

Online gambling companies PartyGaming and 888 have both been demoted on
prestigious FTSE stock indexes in the UK, following the unexpected passing
through the Senate of a US bill which aims to make it illegal for US banking
institutions to process transactions to online gambling companies. President
Bush signed the bill into law on Friday, and publicly-listed companies
PartyGaming and 888 immediately blocked wagering from US residents. When the
bill was unexpectedly passed through the US Senate after it was attached to
the unrelated Ports Security Bill, shares of publicly traded online gambling
companies nose-dived. PartyGaming has lost around 75% of its value following
the news, with 888 losing around 50% of its value. As a result, PartyGaming
dropped off the FTSE 100 list into the FTSE 250 Index. As a result, 888 was
relegated from the FTSE 250 onto the FTSE Small Cap Index. Many online
gambling companies will continue to provide betting services to US
residents, as the new law does not make online gambling illegal - it simply
aims to make it more difficult to fund player accounts.
Moral reasons were cited by proponents of the bill, but it is largely
believed that the US government was worried that much of the online gambling
industry was based overseas, and wanted to restrict the flow of US funds
over their border. Industry analysts expect the new law will largely be
ineffective, as US banking institutions may strain under the weight of
regulation, and may not be able to fully prevent the funding of accounts
through checks and wire transfers.

Antigua-based World Gaming, the online gambling group, has gone into
administration, just before a law that would bar it operating in the US was
due to be passed. The company had its shares suspended on the Alternative
Investment Market and four of its top directors, including chief financial
officer David Naismith, and chief executive Daniel Moran, have resigned. US
business made up the 'overwhelming majority' of revenues, the firm said. The
new bill, signed by President Bush on Friday, effectively makes it illegal
to accept bets from US customers. World Gaming - which traded under sites
including sportsbetting.com and betonusa.com - is the first betting firm to
collapse as a result of the law.

A "one-stop shop" treating problem gamblers in Sydney is reporting a 50 per
cent success rate. Run by The Salvation Army in cooperation with the
Fairfield RSL club in Sydney's south-west, The Sydney Problem Gambling
Centre opened in October last year. In its first annual report, published
today, the centre said it had answered 400 telephone inquiries and conducted
561 counselling sessions. "Of those who continue with counselling, (the
centre) has reported a 50 per cent success rate in radically altering the
behaviour of the problem gambler,'' the report said. Gerard Byrne, from the
centre, said its success was attributable to the rare concentration of a
range of services in the one location. "We are offering what we see as a
one-stop shop for people with a gambling problem,'' Mr Byrne said.
"We have gambling intervention workers, or counsellors. We also have
therapists there to provide intervention for depression and anxiety, and to
provide family counselling. "We have a financial counselling service and
located next door to us is a Salvation Army church and community service
centre providing welfare and social assistance. "Added to that, our
telephone help service line diverts to the Salvo Careline for out of hours
support. So in a sense we are there 24/7.'' Problem gamblers from as far
away as Queensland and Wagga Wagga have taken the even-money odds to saving
themselves and their families from the devastating effects of problem
gambling. The typical problem gambler in counselling at the centre is a man
aged between 36 and 46, who is hooked on poker machines and abuses alcohol.
A pioneer in the treatment of problem gamblers in Las Vegas, Rob Hunter, has
been recruited by the Fairfield RSL club to consult on the centre and train
the club's staff on intervention. The coincidence of problem gambling and
alcohol abuse among 80 per cent of all people counselled at the Sydney
centre was higher than at his Las Vegas centre, Dr Hunter said, but not
unexpected.

"The biology of problem gambling is very similar to alcoholism,'' he said.

"They are both chronic and progressive disorders. Both meet the medical
criteria for what constitutes an illness.

"And the pay-off for both is not so much excitement but a numbness, they
like the anaesthetic effect.''

Twenty per cent of all clients assessed by the centre admitted to suicidal
thoughts.

Problem gambling affects more than 1.5 million people around Australia,
including gamblers and their families, and in NSW it's on the rise.

Macau's gaming industry chalked up yet more record takings in the second
quarter of the year, racking up 12.9 bln patacas, government figures showed.
Census Department statistics showed that gambling receipts outstripped all
other forms of income, as they rose 11 pct year on year in the three months.
By comparison total exports amounted to 5.6 bln patacas. With annual
gambling receipts expected to near 7 bln usd, the city is already believed
to have overtaken the earning power of the Las Vegas Strip casinos. Such
growth -- in excess of 25 pct last year -- had been fuelled by a sudden
surge in tourist arrivals since travel restrictions were lowered in the
Chinese mainland. That has been matched by a massive increase in overseas
investment following changes in 2001 to rules governing the foreign
ownership of casino licences, which until then had been monopolised by
tycoon Stanley Ho. As a result some 25 bln usd has been committed to
building some 20 new hotel-casino complexes over the next few years in
anticipation of tourist arrivals in excess of 20 million.

Superstitious or not, Friday the 13th was bad luck for the New York Mets.
Their late collapse in Game 2 gave the St. Louis Cardinals a 9-6 win and
guaranteed that the NLCS would go at least five games, a scenario New York
was hoping to avoid. Manager Willie Randolph now has no choice but to hand
the ball for tonight's Game 5 to veteran Tom Glavine, who also started Game
1 of the series. The 40-year-old left-hander will pitch on only three days
rest because of last Tuesday`s rainout. MLB officials were subsequently
forced to schedule games on five straight days. Glavine has been outstanding
in his last three starts stemming back to the regular season. He`s pitched
19 consecutive scoreless innings and allowed only 11 hits over that span.
Glavine is the crutch propping up the Mets` rotation after they lost Pedro
Martinez and Orlando Hernandez prior to the postseason. "He`s done that for
us all year," Randolph told reporters. "Tommy wants the ball in a big spot,
and as far as I`m concerned, you always feel real confident when you give
him the ball." Sportsbooks echo Randolph`s confidence in Glavine as they
prepare to set the line for Monday's Game 5. Oddsmakers are looking at
pitchers' playoff performances so far as the biggest factor for any moves in
favor of the Mets. "Rest won`t really come into play for this line as
Glavine looks at the top of his game thus far in the playoffs," say
bookmakers for Bodog.com. "Although he's older than the rest of the bullpen,
it`s also important to remember a lot of veterans have experience deep in
the playoffs and that is often more of an edge than the fatigue that
everyone is experiencing." Glavine has made 34 postseason appearances for a
record of 14-15 with a career playoff ERA of 3.23, but he struggled in his
last postseason start on limited rest. Glavine allowed seven earned runs in
less than three innings for the Atlanta Braves in Game 4 of the 2002 NLDS
against the San Francisco Giants.

"I`ll worry about this game," Glavine said before Game 1, "and worry about
Game 5 if and when I get into that situation and make whatever adjustments I
have to make. I`ve done it before. I know what to expect. I know how to
prepare for that next start."

New York may need another lengthy performance from their newly-appointed ace
after the Mets` bullpen showed signs of fatigue in Game 2. Their relievers
gave up five earned runs, including three off usually 'lights-out' closer
Billy Wagner.

"This is more the collapse of Wagner than the bullpen for the Mets," say
Bodog.com's bookmakers. "Although (Guillermo) Mota gave up two runs, the
Mets were still holding a 6-5 lead before Wagner stepped onto the mound.
This was especially out of character for Wagner, so don`t expect a trend out
of this."

Wagner allowed a home run, two doubles and a single in the ninth leading to
the Mets` sticky situation for Game 5. Wagner told reporters he felt
confident with his pitches but it seemed that the Cardinals batters just hit
everything.

With questions surrounding his bullpen and the thinning rotation, Glavine is
facing a situation that he has never seen in his long 20-year major league
career.

"I`ve never had a postseason where I haven`t been surrounded by a pitching
staff with three or four guys who could be a number one starter," Glavine
told Newsday. "But it doesn`t change the way I go about things. My game is
my game and that doesn`t change because I don`t have Pedro or Orlando
[Hernandez], or Maddux or Smoltz for that matter."

The Unlawful Internet Gambling Enforcement Act of 2006 amends Chapter 53 of
title 31, United States Code, by adding at the end the following:
"SUBCHAPTER IV PROHIBITION ON FUNDING OF UNLAWFUL INTERNET GAMBLING".
Chapter 53 deals with Monetary transactions and is designed to; "increase
the strength of United States measures to prevent, detect, and prosecute
international money laundering and the financing of terrorism...(and) to
provide a clear national mandate for subjecting to special scrutiny those
foreign jurisdictions, financial institutions operating outside of the
United States, and classes of international transactions or types of
accounts that pose particular, identifiable opportunities for criminal abuse
." The Act makes unlawful the receipt by a gambling business of proceeds or
monies in connection with unlawful internet gambling. It represents the
first piece of Federal legislation to explicitly deal with online gambling,
and it makes clear the US government's intention to stop the flow of funds
from Americans to online gaming operators through criminal sanction. Under
the Act "Restricted transaction" is taken to mean any transmittal of money
involved with unlawful Internet gambling, whilst a "bet" is construed as
including;

"the staking or risking by any person of something of value upon the outcome
of a contest of others, a sporting event, or a game subject to chance, upon
an agreement or understanding that the person or another person will receive
something of value in the event of a certain outcome (and) any instruction
or information pertaining to the establishment or movement of funds by the
bettor or customer in, to, or from an account with the business of betting
or wagering."

The term 'financial transaction provider' means a creditor, credit card
issuer, financial institution, operator of a terminal at which an electronic
fund transfer may be initiated, money transmitting business, or
international, national, regional, or local payment network utilized to
effect a credit transaction, electronic fund transfer, stored value product
transaction, or money transmitting service, or a participant in such
network, or other participant in a designated payment system.

In response to the passing of the Act Sportingbet and Leisure & Gaming sold
off their US facing business for $1. PartyGaming, 888 and Betcorp all ceased
taking bets from US citizens, whilst World Gaming went into administration.
The collapse of the sector and the rapid sell off of company assets, without
shareholder approval, was unprecedented in the corporate history of the UK.

Nonetheless, a number of concerns have taken a decision to stay in the
US-facing online gambling market, including a number of publicly quoted
companies.

International All Sports Ltd
International All Sports Ltd (IAS) was formed in July 1995 by leading
Australian bookmaker Mark Read, with seed capital provided by a small group
of investors, including three leading Melbourne based bookmakers. The
company was listed on the Australian Stock Exchange on 6 August 1999. On 6
August 2004 International All Sports Limited merged with fellow Australian
bookmaker Canbet Limited, under the terms of which, Canbet shareholders
received 1 IAS share for every 25 Canbet shares they held. The Northern
Territory Racing Commission subsequently awarded a sports bookmaking licence
to Canbet, allowing the company to operate a 24/7 internet and telephone
race and sports betting service.

In response to the passing of the Act the company issued the following
statement to the Australian Stock Exchange;

"The Board of International All Sports Limited is disappointed that the USA
Government is passing laws to circumvent its commitment under the General
Agreement of Trade and Services to the World Trade Organisation to allow
free international trade in an effort to protect USA gaming companies that
operate in the USA. The Board notes that USA horse racing has been exempted
from the legislation and as such would not affect the business of
IASbet.com. The financial effect on Canbet, the international brand of IAS
that operates out of the United Kingdom is not expected to have any
financial effect as to the operating profit of the group. The Board has
taken legal advice and will continue to take further advice with the
objective of understanding the regulations and procedures which have yet to
be completed."

Gamingking PLC, a provider of online gambling services, said Monday that
Nicholas Watkins resigned as chief executive. Watkins is the latest
executive of a British online gambling company to resign his role after
Congress introduced legislation to ban Internet gambling in the United
States. Sportingbet PLC Chairman Peter Dicks resigned last month after being
detained at New York's JFK Airport for illegal online gambling. A judge
later cleared Dicks to return to London after New York Gov. George Pataki
declined to sign a warrant extraditing him to Louisiana where the arrest
warrant was issued. The directors of World Gaming PLC resigned on Friday,
leaving the company in the hands of administrators. Watkins' resignation
takes effect Oct. 31.

Barry Metcalf won't give odds on his chances of winning a state Senate seat
Nov. 7. But the Republican thinks his strong opposition to expanded gambling
provides him "a great shot" of defeating Democratic incumbent Ed Worley.
Metcalf, who lost to Worley by 1,901 votes for the 34th Senate district seat
four years ago, has tried to make gambling the hot-button issue of the
campaign in the district made up of Madison, Rockcastle and Lincoln
counties. Democrats have a majority in Madison and Lincoln counties, while
Republicans control Rockcastle. "This election is a referendum on casino
gambling," said Metcalf, who hopes to return to the Senate. He was in the
chamber from 1994 through 1999 and has plastered on his Lexus a sign for
this fall's campaign that reads, "Re-elect Barry Metcalf State Senator." "If
Ed Worley gets elected in November, this state will soon have casino
gambling," Metcalf said. "If he does not, Kentuckians won't have to mess
with it." Worley, the Senate Democratic floor leader, compares Metcalf's
constant barrage on gambling to "a yapping dog." He says he thinks voters
will re-elect him to a third four-year term because of his "ability to
produce for the district in two areas: education and funding local
projects." Worley, who has been in the legislature eight years and has
served as minority leader for four, points to education funding he has
supported in the legislature, especially $113 million for facilities at
Eastern Kentucky University in Richmond since 2000. His campaign ads also
tout hundreds of millions in projects he has garnered for his district.
"I'm proud of what I have done for my district," he said.

Worley, former city manager for Richmond, has never been on a general
election ballot for the state Senate without facing a Metcalf. In 1998, he
beat Garrard County's Mark Metcalf, Barry's younger brother, who now is a
federal immigration judge in Miami Beach.

Worley accuses Barry Metcalf of misrepresenting his views on expanded
gambling.

"He's painting me as a primary force behind it," said Worley, who advocates
for allowing Kentuckians to vote on a constitutional amendment that would
allow casinos.

Metcalf has been passing out to media in the district copies of newspaper
reports that record Worley's concern in recent years that Kentucky is losing
millions to Indiana's gambling boats. Metcalf says the reports are "proof
that Worley will work to bring casinos to Kentucky."

Worley calls Metcalf's attempts "ridiculous" and says he "would not lobby
anyone to vote one way or another on the issue. I'd respect each person's
vote."

Asked how he would vote on casino gambling if the General Assembly ever
should put the measure on a statewide ballot, Worley said, "I'd have one
vote. I'd cast that vote in privacy."

Metcalf said he will "never support casino gambling.

"It's immoral. It's for losers. It will make a huge number of people
poorer," he said. "It will cause many social problems for the entire state
while only benefiting a handful who will make a bundle off of it."

Although opposed to casino gambling, Metcalf said he would not work to ban
horse racing, bingo or the Kentucky lottery.

Though some prominent Republicans were cool toward Metcalf's 2002 campaign
because he had challenged Jim Bunning for the U.S. Senate, Metcalf is
getting help from them this year.

"I think some in the party who were upset with Barry is old news," said
Senate Minority Leader Dan Kelly, R-Springfield, who recently attended a
fund-raiser for Metcalf.

Metcalf also is trying to gain political advantage by talking about a recent
court case involving Worley.

Last month, a federal judge dismissed a civil racketeering case against
Worley and his business partner Allen Grant Jr. U.S. District Judge Joseph
Hood said that Earl Estes, Worley's former business partner, could not prove
that there was a "pattern of racketeering activity" in the sale of seven
parcels of land at the intersection of Ky. 52 and the Eastern Bypass in
Richmond.

Hood said the allegations in the case were outside the jurisdiction of the
federal court, but said Estes could pursue his claims of fraud in state
court. The case has since been refiled in state court.

In his order, Hood did not address any of the questions about the land
transactions that have been in dispute, including whether to admit as
evidence a secretly taped conversation that Estes' attorney says shows that
Worley lied in an April deposition.

Estes sued Worley, Grant and WG&T Builders, which is owned by Worley and
Grant, in U.S. District Court in Lexington in January. He alleged that
Worley and Grant committed fraud when they induced Estes to sell seven
parcels of property that the three men jointly owned in Madison County for
substantially less than fair market value. Worley and Grant have denied any
wrongdoing.

"This is a property dispute that Barry is trying to paint as a scandal,"
Worley said.

If he is re-elected in November, Worley said, he will run again for Senate
minority leader in January's legislative leadership races.

"I've been gettin' it done for my district," he said. "I want to continue
that."

Metcalf said Worley should not tout projects he has brought to the district,
since many were paid for with $4 billion in debt the legislature has
approved in the last two years.

"What Worley does not tell you is that he has put this spending on a credit
card and voters get the bill for the next 20 years," Metcalf said.

The port security bill that President Bush signed Friday included a
provision severely restricting internet gambling. The law forbids American
banks and credit card companies from processing online bets. It's been tough
to enforce, but lawmakers say the new provision will take a big chunk out of
the soaring Internet gambling industry. Americans account for half the
online gambling market. The National Football League was among those backing
the measure, while some banking groups lobbied against it. Some
international online gaming companies began folding up their U.S. operations
after the president signed the measure.

I was talking to God the other day and I told him I knew he wanted me to win
the lottery and use most of the winnings to help others (after I paid for my
car and house and vacation). I told him I would buy a lottery ticket and how
much I won was up to him. So I bought 20 tickets. Guess how much I won?
Zero, nada! I guess he was busy with something else. So I'm out $20. Can I
deduct that as a gambling loss? Today, we'll talk about that. It seems that
a number of people in El Paso have consistently lost money gambling, and
some of them have lost much more than their spouses know about. No surprise
there, until tax season. Seems that at the end of each year the casinos send
a notice to the IRS reciting how much you won -- but not how much you lost.
The IRS computer checks that information when you file your return. If there
is no match, you may get audited. So how do you report gambling proceeds?
Let's look at these issues. This raises two questions: How much can I deduct
and how do I prove it?

Unfortunately, you can deduct gambling losses only to the extent of your
gambling income. You can not deduct any more than what you won. Federal tax
law does not allow you to treat gambling as a business that generates
losses.

This means that even if you spend all of your salary on craps, you can not
deduct those losses except to offset your winnings. I think that is
unfortunate. I know several people who are professional gamblers. They view
it as a business, and some are quite successful and have made a great deal
of money gambling. For them this rule works an injustice.

For example, if they make money in one year, they pay taxes. If they lose
money the next, they can't carry back the loss against last year's gambling
income -- as could a business.

Anyway, the rule is clear. Gambling losses can only offset gambling income
in the same year.

How does one prove gambling losses? Under the federal tax law, we have the
burden to prove the amount of these losses by maintaining proper records.

The IRS wants us to keep a diary containing information such as where and on
what date we gambled, the kinds of bets we made, how much we lost, any
witnesses, etc.

Further, the IRS wants us to keep documents supporting these losses, such as
wagering tickets, canceled checks and credit card receipts. If you gamble
out of town, the IRS likes to see airline tickets and hotel receipts.

If we don't keep good records, we will be taxed on our gross receipts -- as
reported by the casino -- and not our gross income (after deducting our
losses).

So there you have it. If you're going to gamble, do it for fun and
entertainment and keep records. Otherwise, you get nada!

Every state with sanctioned casinos has a program in force to allow citizens
to self-exclude themselves if they feel gambling is or has become a problem
for them.
Stiff criminal penalties are enforced in a majority of cases for people who
break their self-imposed curfews by entering a casino illegally. Casinos in
their advertising and via in-house signage and literature distribution must
inform customers who are at risk of gambling addiction of the organizations
to call for assistance. The state of Missouri, however, utilizes a law that
is unique among gaming states. It enforces an automated loss-limit tracking
system that restricts the amount of out-of-pocket money a gambler may lose
during any one session to $500. The system has been in place ever since
riverboat gambling began there in 1994, and in spite of periodic pressure
applied to the state legislature to lift the restriction, it remains in
force at all 11 of the casino destinations in the "Show Me" state. Iowa, the
first state to legalize riverboat gambling, enforced a loss limit in the
beginning but quickly withdrew it when droves of gamblers began crossing the
border for the opportunity to bet as much as they wanted at the newly opened
casinos in Illinois. Even though the casino barges and riverboats in
Missouri are permanently docked, each day is still broken down into what is
known as "phantom excursions" of two hours in duration. No gambler on a
Missouri riverboat can lose more money out-of-pocket than $500 during any
single excursion. Every gambler must have his player's card swiped before he
enters a Missouri casino. This process activates the system that will
monitor how much they bet. Unless you use that card when you play the slots
or buy in at a table game, you can't gamble.

The restriction is controversial, even among officials who regulate gaming
in the state. For example, Clarence Greeno, Missouri's Gaming Enforcement
Manager, told me: "I think the loss limit puts us at a competitive
disadvantage with neighboring states and prevents Missouri from becoming an
entertainment destination."

The $500 loss limit affects slot play to a degree but it especially impacts
the revenue-generating powers of the table games where single bet maximums
are measured in the tens and even hundreds of thousands of dollars elsewhere
around the country.

The gambling industry in Missouri is no small-time operation. Many of the
nation's major companies, including Harrah's Entertainment, Ameristar, Isle
of Capri and Argosy have made huge capital investments in high-quality
casino hotel complexes in the St. Louis and Kansas City regions.

There's no doubt the state could generate much more revenue and the gaming
companies more profit if the loss limit didn't exist, but Greeno hinted that
at this point it's a matter of principle more than anything.

"Legislators vote the conscious of their constituents," he said, "and
there's a strong feeling in this state that voters feel the loss limit helps
protect people from losing too much money."

Greeno acknowledged that gambling addiction is no less of a problem in
Missouri than it is in other states in spite of the loss limit, saying
"pathological gamblers have a problem regardless of how much money they can
bet."

Even with the restriction, Missouri has more than 10,000 people on the
state's self-exclusion list, which under present regulations bans such a
person from entering a casino for life and subjects violators to criminal
arrest for trespassing.

Fraud study links gambling and fraud "Gambling is increasingly a major
motivator for serious fraud," says John Stansfield, CEO of the Problem
Gambling Foundation of New Zealand (PGF). "Since the last KPMG Fraud Survey
in 2004, there has been a 60% increase in the amount of New Zealand fraud
that was motivated by gambling. The 2004 study found that gambling was the
highest motivator for serious fraud, and I would expect that trend to
continue in 2006," says Mr Stansfield. "We are hearing of more and more
fraud in New Zealand organizations. Studies such as the 2006 KPMG Fraud
Survey and the 2006 BDO Not-For-Profit Fraud Survey both identify gambling
as a motivator for fraud, which shows just how much gambling costs New
Zealand organizations," he says. "We believe that the figures really are
higher than reported, as a significant number of gamblers are not caught, so
the crimes don't get discovered. In other cases, the crime is discovered but
the link to gambling wasn't," says Stansfield. "Gambling crime is growing at
an alarming rate, and gambling is the reason for the most serious property
fraud in a number of cases." Some recent examples of fraud in New Zealand
organizations include: Catering manager stole $6872 from his employer for
gambling (Christchurch, September 2006)

Man defrauded friend out of $101,000 by lying so that he could gamble
(Hamilton, July 2006)

WINZ case manager fraudulently accessed $102,475 by inventing a client so
that he could gamble the money (Christchurch, July 2006) Man with a history
of fraud, defrauded second employer of $5761 for gambling (Christchurch,
July 2006) Woman committed benefit fraud of $11,000 for gambling (Nelson,
July 2006)

I am a pathological gambler. You may not recognize me as such, but I may be
your co-worker, teammate, close relative or dear friend. My doctor has
diagnosed my problem based on the following criteria set by the American
Psychiatric Association. Preoccupation: I am preoccupied with gambling,
reliving past gambling experiences, planning my next gambling venture, or
thinking of ways to get money with which to gamble. Tolerance: I need to
gamble with increasing amounts of money in order to achieve the excitement I
desire. Escape: I gamble as a way to escape from my problems or relieving
unpleasant moods of helplessness, guilt, anxiety or depression. Chasing:
After losing money gambling, I often return another day in order to get
even, but I end up only chasing my losses. Lying: I lie to my family,
friends, therapists and others to conceal the extent of my involvement with
gambling. Loss of control: I have made repeated efforts to control, cut back
or stop my gambling, but without success. Illegal acts: I have committed
illegal acts of forgery, fraud, theft and embezzlement in order to finance
my gambling. Risked significant relationships: I have jeopardized or lost a
significant relationship, job, educational or career opportunity because of
my gambling. Bailout: I must now rely on others to provide money to relieve
my desperate financial situation caused by my gambling. I understand that
there are at least 1,200 pathological gamblers like me, and as many as 2,500
problem gamblers on Guam today. I know it's because we already have gambling
like bingo, lotteries, cockfighting, poker games, pachinko and greyhound
racing. Each one of us on average is $70,000 in debt, has stolen $130,000
and will cost our island taxpayers $10,000 to $30,000 each year in
socioeconomic costs.
A majority of us wish we were dead; two-thirds of us have thought of
committing suicide; half of us have made suicide plans; one-fifth of us will
make an attempt, and, sadly 1 percent of us will commit suicide. More than
half of us have been divorced, one-fifth of us will file for bankruptcy, and
one-sixth of us will end up in jail.

I never wanted to be a pathological gambler. I was introduced to gambling as
a youth, and after that first "win" had increasing legal and illegal
opportunities to gamble. Then I got hooked on more dangerous forms of
gambling, like poker machines, and obviously I am unable to control this
addiction.

I hear there is a proposal to bring slot machine gambling to Guam Greyhound.
If this occurs, it will double the number of pathological and problem
gamblers like me.

While mapping plans for a multimillion-dollar expansion, Caesars casino
executives have begun laying groundwork for the local government in Harrison
County to share some of the project's costs. Caesars general manager Ed
Garruto approached Harrison commissioners last summer about having the
county pay several million dollars toward the improvements. The payments
likely would come from about $10 million in profit-sharing money that
Caesars pays the county each year under its development agreement. So far,
$68.8 million from the casino has gone to create the Harrison County
Community Foundation endowment, providing grants and scholarships to
nonprofit groups, and a smaller "community fund" that boosts county
operating money. No dollar figure has been put on the expansion beyond a $40
million first phase to re-brand Caesars as a Horseshoe Casino, or on how
much Caesars wants from the county. But casino executives have estimated the
benefits of the investment - the commissioners said they were told - to be
an anticipated $150 million increase in annual gambling revenue.
Commissioner James Goldman said it's too soon to say whether a partial
rebate to Caesars would mean less profit-sharing money, given the projected
increase in gambling. "What he (Garruto) said is ... `We'd like for you to
help us do that expansion because you're going to benefit from it, just like
we are,'" Goldman said.
Clark Hardsaw, who owns the Longbottom and Hardsaw feed and fertilizer store
in southern Harrison, said he wouldn't support a rebate of casino money.
"I just don't understand why we need to pay a business to stay in business,"
Hardsaw said. "I can't see why the commissioners would want to do this."
Garruto was out of town late last week and did not respond to questions sent
to him via e-mail. But commissioners said he pointed out that similar
partnerships have been forged by Casino Aztar at Evansville and Argosy
Casino near suburban Cincinnati, where the cities have committed a total of
$60 million toward improvements.

Harrison leaders said they have made no commitment.

Two commissioners said in interviews last week that they initially were
lukewarm to Garruto's proposal for fear the Indiana General Assembly could
reduce the amount of casino tax money paid to Harrison and other casino
communities in the next few years.

Hoosier lawmakers early last year considered reducing Harrison's annual
casino tax revenue to $4million from the current $23 million - then backed
off the proposal.

The scare over losing the money hasn't subsided.

Goldman said the commissioners are worried about locking the county into a
significant rebate for Caesars' improvements when they can't say whether the
legislature will slash its tax revenues.

"Our initial reaction (to Garruto) was, `How much is the state giving?'"
Goldman recalled.

After the Nov. 7 election, county leaders might get a better sense of
whether legislative leaders are still bent on reducing tax payments to
Harrison and other communities with casinos, Goldman said.

"I really expect until the election comes around you won't see anything
signed by us," he said.

Garruto recently sent the commissioners a copy of an Indiana casino trade
group's newsletter with an article on Casino Aztar's improvement plans - and
a note attached saying that Evansville had committed $10 million toward the
project.

Until last year, Caesars Entertainment Inc. owned the $400 million gambling
complex in Harrison, about 12 miles downstream from Louisville. It was
acquired last year by Harrah's Entertainment Inc.

Harrah's has since told state gambling regulators it intends to spend more
than $40 million to re-brand its 93,000 square feet of gaming space and
170,000-square-foot pavilion as a Horseshoe Casino.

A company executive also told The Courier-Journal in June that it expected
to complete plans by early next year for a second phase of improvements to
enlarge Caesars' existing 503-room hotel or build a second hotel tower.

Garruto told the commissioners that those plans include creating an upscale
steakhouse to replace Portico Restaurant and enlarging a concert and live
entertainment area, Commissioner Jim Heitkemper said.

Harrah's has said the expansion is proceeding, despite published reports
this month that the company was the target of a $15.1 billion buyout offer.

Regardless of who owns Caesars, such expansions are a big trend in Indiana,
said Ernest Yelton, the Indiana Gaming Commission executive director.

"There's so many projects in Indiana. ... It seems as though the entire
industry" is revamping outdated facilities all at once after a decade in
business, Yelton said.

Lawrenceburg Mayor Bill Cunningham said predictions that Argosy Casino would
face tougher competition for gamblers' dollars in coming years motivated
officials in his city to agree to rebates of up to $5 million annually for
10 years to help Argosy pay for its $350 million investment.

The city had a vested interest in backing Argosy's bid to stave off new
competition if Kentucky and Ohio legalize casinos or slot machines at
racetracks, he said of the June 2004 Argosy agreement.

"We're concerned about what's going on in other states, too," Cunningham
said.

At the same time, Lawrenceburg stands to benefit from additional jobs and
gambling revenue, he said. The Argosy expansion "is going to put another
1,000 jobs here, and this is going to put another $350 million on the tax
base. We felt very comfortable with it."

Lawrenceburg, located four miles from Cincinnati's Northern Kentucky
suburbs, has the richest deal of all 10 Hoosier communities with a casino.
The city receives more than $30 million a year from Argosy's profit sharing
and $20 million or more annually in gambling tax revenues.

The willingness of Lawrenceburg officials to share the cost of Argosy's
project has set "the standard" in the state, Yelton said.

"The good people of Lawrenceburg thought it was a good idea," he said. "I
wouldn't want to question that."

Caesars' pitch didn't surprise Gary Davis, president of the Harrison County
Council. Once officials in Evansville and Lawrenceburg agreed to bear some
of the costs, he thought it was a foregone conclusion that Caesars
eventually would raise the possibility.

In contrast to the United States government's criminalisation of online
gambling, the South African government is legalising the industry in an
attempt to regulate and control it. Online gambling - said to be worth
millions -- is currently illegal in South Africa, but the Department of
Trade and Industry has given a draft amendment Bill (which will allow for
the licensing of online casinos in South Africa) to the Cabinet for
approval. The draft Bill will be available for public viewing by the end of
October, said Brian Muthwa, director of legislative drafting for the
department. He said that hopefully the new law will be passed by the end of
the first quarter of 2007. The draft Bill is based on a report conducted by
the National Gambling Board (NGB), which stated that there is a need to
license and regulate online gambling in South Africa. Control systems to
identify problem gambling, money laundering or any other criminal activities
will be provided for in the regulations.
"Because there is no effective legislation existing, it was decided to
outlaw internet or interactive gambling until effective regulation had been
put in place," said Astrid Ludin, deputy director general of the consumer
and corporate regulation division in the department. "We do not believe
outlawing will stop [interactive] gambling, therefore it is better to
regulate it," said Ludin. Online gambling makes up about 5% of the global
gambling industry and is estimated to be valued at $22,7-billion, according
to Christiansen Capital Advisers, a US-based service that provides gambling
and entertainment industry analysis. Brick-and-mortar casinos in South
Africa paid R2,1-billion in gaming taxes and VAT in 2005, of which the
government received 37%.

So why wouldn't the South African government want to legalise online
gambling if it means obtaining taxes from such a wealthy and growing sector
of the gambling industry.

Chief executive officer of the NGB, Thibedi Majake, agreed, saying the
legalisation of online gambling would mean a new revenue source for the
government in the form of taxes and levies.

The South African law against online gambling prohibits "any natural or
juristic person from offering or engaging in interactive gambling unless
authorised by the Act or any other law in force within the Republic".

"Our interpretation of the Act is that any person who is gambling online
through [internet casinos] is contravening the Act and should be dealt with
accordingly," said Ludin.

But legal or not, a thriving online gambling industry already exists in
South Africa and they're not exactly hiding. It's almost impossible to miss
the flashy pop-up casino advertisements that occupy so much space on local
sites like the Mail & Guardian Online, News24, iol and Ananzi.

Piggs Peak Casino, Silversands Casino and African Palace, three popular
online gambling websites that cater for South Africans, spent over R10-
million on online advertising in 2005/06.

Silversands Casino spent R5-million to advertise their internet games
online, according to Rina Erasmus, a consultant for Nielson Media Research.

Piggs Peak spent R4,9-million, while African Palace spent R800 000,
according to Nielson Media Research.

The marketing director of African Palace, who wished to remain anonymous,
said African Palace had spent about R3,6-million on online advertising.

He said the online gambling industry in South Africa is growing rapidly.
"It's only set to get bigger. It will grow tenfold in the next five years
... there wouldn't be a company spending millions on advertising if it
wasn't worth it," he said.

The three internet casinos (which operate from other countries like
Swaziland, Cyprus and The Netherlands, and over which South African law has
no control) were reluctant to tell the M&G online the number of members they
had because it would give confidential information to their competitors.

Despite the amount of money they manage to spend on advertising, Piggs Peak
and Silversands insisted that the industry was small.

"Online gambling is not a huge industry in South Africa because people have
limited access to the internet and worldwide, land casinos are always more
popular," said Wendy Graaf, marketing manager for Piggs Peak (which has been
an online casino for eight years).

Although she wouldn't say how many gambling members belonged to Piggs Peak
internet casino, she said it wasn't even a fraction of a million.

Marsha du Preez, marketing manager of Silversands, also said Silversands did
not have thousands of members in South Africa. "It's more like hundreds."

Although a South African online gambler is "contravening the Act" by using
internet casinos like Piggs Peak, Silversands or African Palace, nothing is
being done to arrest online gamblers because it is impossible to arrest
gamblers in the privacy of their own homes, said Majake.

Peter Collins, executive director of the National Responsible Gambling
Programme in South Africa, said that even if "people are gambling with
offshore companies the police won't raid their houses at 3am and try to stop
them".

He also said that the new US Bill, which wiped out $7-billion from a
$12-billion industry, would not stop online gambling in America.

"Making online gambling illegal in the US will do exactly what prohibition
has done in cases of prostitution ... it would go on underground, it would
be controlled by organised crime instead of a regulated body."

It's also illegal in South Africa to advertise internet casinos "above the
line", which means on television, radio and in print. Online advertising is
legal because there are no geographical jurisdictions on the internet.

But once online gambling is legalised, so will the advertising. The manner
and form of interactive-gambling advertising will be prescribed "to protect
society against the over-stimulation of gambling", said Muthwa.

The legalisation of internet casinos may have negative consequences, said Du
Preez. "If it is legalised then any Joe Soap could open up a casino and
sometimes that's not always such a good thing," she said.

Newly licensed South African internet casinos will mean trouble for Piggs
Peak, Silversands and African Palace.

Majake said new South African online casinos will take their cue from the
brick-and-mortar casinos where there is "a culture of integrity".

Graaf said it would be costly to move operations from Swaziland to South
Africa, so whether or not online gambling is legalised in South Africa, it
makes no difference to Piggs Peak.

But while online casinos that offer games such as blackjack, poker, roulette
and online slots might only be legalised this year, online sports betting
has been legal for two years.

In fact, the situation for an online sports better in South Africa is the
exact opposite to that of an online poker player. It's illegal for South
Africans to place sports bets on overseas websites.

Hilton Hasson, website manager of Betting World (a South African-based
sports betting website), said that bookmakers pay R100-million in tax a year
to the South African government.

Hasson said that they would also benefit if interactive gambling was
legalised because other international betting websites offer poker, which
they plan to offer once it is legalised.

My day at the casino
The soft sound of a piano lingers somewhere in the background, there's the
subdued murmur of the hopeful crowds drowned out by the butterflies in my
stomach as a voice says: "No more bets please". Then it's the whirl of the
roulette wheel and all I can hear are my prayers for success. and the
printer in the office.

Once you log onto Piggs Pig internet casino, an online gambling forum based
in Swaziland, your computer screen is turned into a virtual Vegas.

The screen becomes a sea of bright colours, flashy displays, and lame
African music which makes your fingers twitch, and gives you that same
pleasurable guilty feeling as when you drive into Sun City or Monte Casino.

It takes about seven minutes to download the casino to your computer, which
is free. Once you've done that, you can either open an account -- using a
credit card, internet transfer or bank deposit -- or you can "practice play"
(with fake money).

It sounds like a casino, it virtually looks like a casino and it's just as
difficult to drag yourself away from the virtual poker table or the Triple
Magic slot machine. It doesn't make annoying Nintendo-like noises if you
lose and it makes uplifting noises when you win. You can even hear money
dropping when you win on the slot machine.

There's only one tiny but enormous difference; there's a clock.

Unlike in brick-and-mortar casinos where clocks are nowhere to be seen, on
the top right of your screen is your computer clock. But I swear the clock
ticks faster because when I started playing roulette it was 10am and after
five minutes of testing it out my boss asked me if two hours wasn't enough
time to get the information I needed.

You can also choose which gambling chips you want to use on table games,
whether it's R1 or R100.

But the very best, if not disturbing part of online gambling, is that no-one
can hear you scream, swear and curse, unless you're gambling from the
office.

Internet gambling has made it possible to distract yourself wherever you are
as long as you have an internet connection and a computer. You can be at
home, at work, at the airport, in a café or in a park and you'll still have
access to a 17-inch casino.

At 32 years old, Bill Kearney was a self-made millionaire who had overcome
the limits of his ninth-grade education to own a thriving business. At 33,
his life began to disintegrate. He was a compulsive gambler who was well on
his way to losing his wealth, his drapery manufacturing business in
Philadelphia and his marriage. "I was using every means possible of getting
money to gamble, except robbing a bank," Kearney said. Kearney's spectacular
self-implosion was caused by his lust for the blackjack tables. In the early
1980s, he began gambling at Atlantic City casinos and racked up more than $2
million in losses in only four years. Kearney blames only himself for his
downfall, but wonders whether he could have avoided financial ruin if the
casinos would have sent him a simple statement each month listing his
winnings and losses. Now he is working with Pennsylvania lawmakers on
legislation that would require the Keystone State's new slot parlors to
issue monthly, credit card-like statements showing gamblers how much they
have spent. "This whole crusade that I'm doing with the statements is to
prevent other people from destroying their lives," said Kearney, now 55 and
a mortgage broker in Philadelphia. Kearney, who has since stopped gambling,
said compulsive gamblers may be too far gone to be helped by monthly
statements. But the statements would serve as a wake-up call to casino
novices who are at risk of betting over their heads, he maintained. "This is
for the virgins, the sheep who never gambled before," Kearney said. "They're
the ones who are going to be slaughtered."
Facing intense opposition from casinos, the legislation has stalled in the
Pennsylvania Legislature and seems a longshot for final approval, but the
very idea of monthly gambling statements is shaking the gaming industry.

"You can understand why the casinos are against it," said Frances Gizzi, a
clinical social worker who counsels compulsive gamblers at her private
practice in Red Bank, Monmouth County. "If you're keeping your gambling in
check, the casinos don't want that. It would prevent them from making
money."

Atlantic City casino operators, hoping the proposal will die in
Pennsylvania, are not saying much about the gambling statements while the
issue is being debated by Pennsylvania lawmakers.

"If it ever comes to pass or is ever discussed here, then we'll comment on
it. But it's a Pennsylvania issue. It's not a New Jersey issue," said Joseph
A. Corbo Jr., president of the Casino Association of New Jersey, a trade
group representing Atlantic City's gaming industry.

Robert M. Pickus, executive vice president and general counsel for Trump
Entertainment Resorts Inc., argued that monthly gambling statements are
unnecessary and would be too intrusive - a type of "Big Brother."

"To some degree, in my mind, I would equate these statements to a bar owner
mailing out statements to patrons about how many drinks they've had," Pickus
said.

Trump Entertainment, owner of three Atlantic City casinos, is competing for
a license to operate one of two slot parlors that have been approved for
Philadelphia under Pennsylvania's 2004 gaming law. Overall, there will be 14
slot parlors and racetrack casinos throughout Pennsylvania, with the first
site preparing to open Nov. 14 near Wilkes-Barre.

Trump Entertainment has been negotiating with neighborhood groups for
community benefits that would make its proposed Philadelphia slots parlor
more palatable. In earlier drafts of the proposed agreement, Trump had
consented to sending out gambling statements to customers on a quarterly
basis. Pickus said the proposal was later dropped at the request of
neighborhood groups after the negotiations focused on other issues.

Kearney said the gaming industry fears the monthly statements because they
would create a paper trail allowing gamblers and their families to sue the
casinos for gambling losses.

Nationwide, the full extent of the compulsive gambling problem is anyone's
guess. The American Gaming Association, the casino industry's national
lobbying group, estimates compulsive gamblers represent about 1 percent of
the customers. The New Jersey Council on Compulsive Gambling says 5 percent
is the figure for Atlantic City's casinos, with another 10 percent to 15
percent of the gamblers in danger of becoming addicts.

States and some casino companies have programs to help compulsive gamblers
kick their habit. In New Jersey, for instance, gamblers may voluntarily
place themselves on a "self-exclusion list" that bans them from entering
casinos. More than 500 people have signed up for the program, according to
the New Jersey Casino Control Commission.

"New Jersey is very concerned about the issue of compulsive gambling,"
commission spokesman Daniel Heneghan said. "We want to see everyone who
comes here to the casinos to gamble responsibly. We think the programs we
have to help people who have a gambling problem are indeed helping them. And
we're always open to suggestions for better, more efficient and more
effective ways of doing that."

Atlantic City casinos must include a toll-free number - 1-800-GAMBLER - in
their advertising to direct people to a 24-hour hot line run by the New
Jersey Council on Compulsive Gambling. Each year, the first $600,000 in
fines that are imposed by the Casino Control Commission on the casinos for
gaming violations go to finance the Council on Compulsive Gambling, Heneghan
said.

When Kearney talks of his compulsive gambling, he stresses that he is a
reformed compulsive casino gambler. He says he did not succumb to other
forms of gambling - the blackjack tables were his vice.

Now, nearly 20 years after beating his addiction, Kearney is fighting the
powerful casinos to get legislation passed in Pennsylvania for the monthly
gambling statements.

Betonsports Plc., the British Internet bookmaker indicted in the U.S. for
illegal gambling, has reached a preliminary deal with prosecutors to end a
civil suit seeking to ban the company from doing business in the U.S. U.S.
District Judge Carol Jackson in St. Louis granted the parties one week to
complete what Assistant U.S. Attorney Michael Fagan said was a 21-page
accord resolving a civil suit filed against the company in July by the
Justice Department. ``My impression is there are no substantive
disagreements,'' Fagan told Jackson today. A temporary order barring
Betonsports from doing business in the U.S. has been in place since July 17.
Neither side disclosed terms of the preliminary agreement in court. On July
17, prosecutors also unsealed a 22-count indictment charging Betonsports
founder Gary Kaplan, former Chief Executive Officer David Carruthers and
nine others with racketeering and violating federal interstate gambling
laws. In 2003, the company's Web site, Betonsports.com, had 100,000 active
players who placed 33 million wagers worth more than $1.6 billion, the U.S.
has said. Carruthers, 48, was arrested in July as he changed planes at a
Texas airport. He pleaded not guilty and is currently under house arrest in
St. Louis. Kaplan is still at large. Six other defendants have pleaded
innocent. President George W. Bush on Friday signed legislation making it
illegal for credit card companies to collect payments for transactions with
online gambling sites. Gambling on the Internet has become a $12
billion-a-year business that's growing rapidly offshore.
Betonsports attorney Jeffrey Demerath told Jackson today that difficulty in
assembling the company's board of directors for a review of the proposal was
the primary obstacle to completing the accord.

``We received it Thursday afternoon,'' Demerath told the judge. ``We just
haven't had the time to get everyone together.''

Outside the courtroom, Demerath declined to comment on the status of the
criminal case against Betonsports. He doesn't represent the individual
defendants.

Gambling has been a big part of this area's history, at least since the days
when 19th century landholder Don Guillermo Castro lost most of his 22,000
rural acres - including today's downtown Hayward - gambling. All that
remains today of the city's high-stakes past is the Palace Card Club, a
downtown poker den that some consider a beloved institution and others wish
would disappear. This week, the card room's fate will be placed in the hands
of the Hayward City Council. The council must decide Tuesday night - its
second consecutive hearing on the subject - if it will abide by or amend a
longstanding city law that says the club must close down when its owner,
79-year-old Katherine Bousson, dies. Bousson remains healthy and active, but
she is planning her estate and wants to hand over the business to her three
children. Does the card room, which Bousson has run for many decades,
interfere with the city's hopes for a trendier, family-friendly future? Or
can it fit in comfortably with neighboring downtown businesses, enhancing
the district as a destination for entertainment? "I think there's room in
Hayward for a club like that," said Alameda County Sheriff Charles Plummer,
a Hayward resident who famously "cleaned up" the city's troublesome gambling
and red-light district as city police chief in the late 1970s and early
1980s. Plummer was speaking at a meeting Tuesday during which the council
was supposed to vote on the issue. Instead, Mayor Mike Sweeney used his
prerogative to table the vote for a week. The matter of the Palace Card Club
has raised enough concern, Sweeney explained, that more merchants and
residents should be able to weigh in.
Julie McKillop, owner of Neumanali, an upscale restaurant and wine bar on B
Street, said she has mixed feelings about the presence of a club she called
the "last vestige of a bygone era."

Her restaurant has been touted as one of the flagship examples of downtown's
burgeoning revitalization since it opened in 2004, but McKillop believes
that success depends on the surroundings.

"The current revitalization is very fragile," McKillop said at Tuesday's
meeting. "It's still a daily struggle for most of us."

Gambling was officially allowed in Hayward in 1950, and Bousson took over
the club upon the death of her husband. She fought to keep it in operation
as the city tried to curtail gambling about 25 years ago. Her efforts to
keep it open succeeded, but on condition that the business close when she
sold it or died.

All of the council members except Sweeney have spoken favorably about
allowing Bousson to transfer her permit to her children.

"Hayward's downtown doesn't need to be G-rated and close down at 9 p.m. at
night," said Councilman Kevin Dowling.

The Palace Card Club is open 24 hours every day.

"Entertainment is diverse," said Councilwoman Doris Rodriquez. "There is
room in the downtown, there is room in the city, for a variety of
entertainment."

When about a half-dozen gambling clubs lined Mission Boulevard in the 1970s,
owned by proprietors with nicknames like "Jimmy the Hat," city officials at
the time said they feared it would bring organized crime into downtown.

At the time, Plummer said, there was also a porn theater and 12 massage
parlors, 11 of which he said were houses of prostitution.

Plummer said Bousson's club survived the city's purge of unwanted businesses
because she was "a tough woman. Smart. Cooperative. Not a woman you could
push around, but she was gung-ho."

He required her to bring in all her financial books, and, "We had no
problems with her card club at all," he said.

The last major crime associated with the club happened when a patron was
killed after leaving the club in summer 2005. The case remains unsolved.

City Manager Jesus Armas said he does not believe the club has been of great
concern to the Police Department.

The post-crackdown value of web gambling companies in the US now have their
answer - $1 a pop. Sportingbet pre-empted expected broad restrictions on
gambling sites in the Unlawful Internet Gambling Enforcement Act by selling
its US operations for the price of a one-drink tip to an American bartender.
It also discharged $13.2 million worth of liabilities in anticipation of
George W. signing off the act today to protect citizens' morals' and
domestic gaming American businesses. "We are saddened to have to dispose of
such a fantastic business as a result of political actions in the US
Congress," said Sportingbet chief executive designate Andy McIver in a
statement. You bet, except in the US, that they're sad about this because a
ton of the company's value has just gone down the river courtesy of meddling
intermediaries keen to protect the morals of citizens. The exits of
Sportingbet and others from the US market is the final hand being dealt in a
session that started with the arrest of BetOnSports chief executive David
Carruthers in a US airport in July and led directly to participants losing
billions of dollars in value.

STEVE Bracks's keenly awaited pokies policy was effectively stillborn on the
eve of its planned release earlier this year, when Opposition Leader Ted
Baillieu grasped the initiative with a pledge to cut 5500 machines. It's not
that Baillieu's policy was without flaws; for one thing it was uncosted. It
also allowed for the removal in 2012 of idle poker machines gathering dust
in the corners of gaming dens while more damaging machines remained in
service. But it meant the Government had to sit on its policy in case it
seemed inconsequential incomparison. Finally this week Bracks and Gaming
Minister John Pandazopoulos wheeled out their policy to extend regional caps
on poker machine numbers. And inconsequential it was. There were some minor
new curbs on an industry that rips more than $2.5 billion from the pockets
of Victorians each year. The Government got serious at last about ATMs in
gambling venues, restricting them to dispensing $400 a day per person. And
the maximum bet was reduced from $10 to $5. But according to former pokies
addict and People Power candidate Gabi Byrne, this still allows a gambler to
lose $120 a minute. The great shame about the policy is that it makes clear
that while the Bracks Government has grasped the significance of problem
gambling - there's a large boost for treatment services - it's not willing
to take the hard decisions that will seriously reduce the effect of poker
machines in the state. The much vaunted extension of the regional caps -
designed to force pokies from poorer areas into wealthier ones - was
underwhelming when the number of machines involved, 540, was less than
one-third of that recommended by the Government's backbench committee. And
the machines were being moved rather than being taken out of service. It's
clear that revenue concerns were behind this decision, but the Premier and
Pandazopoulos played dumb when asked about the effect of both options on the
budget. They refused to say exactly what repercussions the policy would have
on the $1 billion the state takes from taxes on poker machines each year,
even though it's a near certainty they would have been given a detailed
briefing on this.

That the central elements of both parties' policies are uncosted - although
external estimates put the cost of the Liberal plan at $200million a year -
doesn't augur well for sensible policy formation in the coming election.
Labor has drafted its pokies policy against a backdrop of bulging government
coffers. Treasurer John Brumby recently revealed the surplus to June this
year was expected to be $825 million, almost double the previous estimate in
May.

If the Government cannot reduce the prevalence of this pernicious form of
gambling and reduce our reliance on pokies taxes in a period of economic
sunshine, when will it be able to?

To describe poker machines as entertainment that adds some value to people's
lives defies credibility. Even though anyone can grasp the mathematical
reality that if you play pokies long enough you will lose - any wins or
jackpots are simply a temporary deviation from the eventual loss - people
continue to play the machines.

And too often those who play them are those who can least afford to, so they
have become a form of taxation on the needy.

Sadly, it's an arrangement the Government seems perfectly comfortable
maintaining. There was no talk from the Government this week of changing
this situation and finding alternative and more equitable sources of
revenue. There were lots of nice words in the policy documents about the
dangers of problem gambling and an apparent recognition of the knock-on
effects in terms of crime, welfare dependence and absenteeism, as well as
the human cost of broken families, marriages and lives.

The European Commission is targeting PMU and Francaise des Jeux to end what
is alleged to be a monopoly on Internet gambling in France, a report says.
The controversy has grown with the surge of online gambling on the
continent. The EU may still allow France to keep its monopoly under certain
conditions such as exempting national lotteries from such control. The
French national lottery is currently organized by FDJ, which also has
implemented Euromillions, giving it a share of foreign markets, Paris link
reports. It is the foreign market issue that has irked the EU whose
commissioners don't like France allowing itself in foreign markets while not
permitting competition at home, said the report. Similarly, online horse
race betting with foreign-based sites in France is seen as resulting from
PMU's control. The report said France may either be forced to open up its
market to competition in exchange for a license and taxes, or ban online
gambling altogether.

Gaming group Empire Online said on Friday it will terminate its business in
the United States immediately ahead of a ban on Internet gambling which will
have a "material" adverse impact on its future earnings. The group added
that around 65 percent of its revenue is currently generated from U.S.-based
customers, and it was one of a number of UK gaming groups such as
PartyGaming Plc to end their gaming activities in the U.S. The moves came as
U.S. President George W. Bush prepared to sign into law legislation to
enforce the prohibition of Internet gaming. "The company's margins will also
be affected by the loss of this revenue due to operational gearing and the
higher gross margin generated from the USA business," the group said in a
statement. The gaming group added it was confident it will continue to
generate positive earnings before interest, tax, depreciation and
amortisation for 2007, and it reaffirmed its intention to pay an interim
dividend of 1.7 cents per share.

As widely anticipated, President Bush this morning signed a bill whose
principal purpose is to tighten security measures for the nation's sea
ports. But attached to that bill at the very last minute -- in order to
prevent Democrats running for re-election next month from stopping it -- was
a federal ban on banking institutions knowingly transferring funds to
businesses or individuals that may conduct gambling operations in states and
areas where gambling is prohibited. It isn't an outright gambling ban, or
"prohibition," but for several of the world's online gambling casino
operators -- most of whom, curiously, reside outside the US -- it may as
well have been. One key reason is that the law now mandates that banks work
out some type of transaction security system within the next nine months,
that can electronically block funds transfers to institutions on a
blacklist. Even though this list may include certain online casino operators
in this specific case, the technology could very well be extended in the
future to apply to any kind of suspect organization, including potential
organized crime or terrorist sources. During this week alone, five more
British-based firms -- Leisure & Gaming plc., FireOne, Fairground Gaming
Holdings, Sporting Bet, and BetCorp -- announced their exit from the US
gaming market. Previously, the transaction ban was a bill unto itself,
though it had been held up by significant opposition. A successful strategy
late last month by Senate Majority Leader Bill Frist succeeded in getting
the bill attached to a terrorism security bill that no one wants to be seen
as openly opposing, at least this close to an election. Ironically
yesterday, in a clear indication that, these days in the gaming business,
you can't win for losing, the European Commission announced it is opening an
inquiry into whether member nations are restricting access to their Internet
gaming markets. Under EU law, it is actually illegal for a licensed business
based in one nation not to conduct operations openly and fairly with other
nations, even if that business is gambling.

Some of these European operations are state-owned, such as national
lotteries, some of whose business is conducted online. If a European-based
gambling firm or agency wanted to conduct online business legally under the
new US law, it would need to implement the electronic protections yet to be
devised, which would protect them from transacting with someone within a US
state or territory where gambling is prohibited.

Under EU law, a member nation cannot prohibit or restrict citizens' access
to any form of gambling, if at the same time that nation runs or sponsors
its own lottery. France is one such state, and is one of the major centers
for Internet-based gambling in Europe. Yet French authorities recently
arrested executives of a Monaco-based gambling firm after they set foot in
French territory, ostensibly for "violation of French gambling laws."

In the name of eradicating state-held gambling monopolies, such as those
that EU commissioners claim exist in France and six other nations, lawmakers
are pushing for new regulations which would mandate that state-owned and
private gambling firms (those that remain) cannot withhold service to their
customers based on where they're located.

Online gambling companies based in Britain began folding the cards on their
U.S. operations Friday as President George W. Bush signed a bill banning
Internet gambling there. The closure of the most lucrative market in the
world is a severe blow to the nascent online gambling industry. At least one
company collapsed from the high costs of exiting the United States and
others were damaged. The North American market accounted for the vast
majority of earnings of Internet gambling companies based in London, which
were caught by surprise two weeks ago when the U.S. Congress passed the
Unlawful Internet Gambling Enforcement Act, making it illegal for banks and
credit card companies to settle payments to online gambling sites. Shares in
gambling companies sank rapidly after that announcement and Bush provided
the final blow Friday when he signed the measure into law as part of a bill
aimed at improving port security. Sportingbet and Leisure & Gaming both sold
their U.S. operations for a token $1 Friday. In selling its operations to
Jazette Enterprises of Antigua, Sportingbet offloaded $13.2 million of debt.

Meanwhile, World Gaming directors resigned, leaving the company in the hands
of administrators. PartyGaming, the world's largest gambling company, said
it had suspended all real-money gambling activities to customers in the
United States. Empire Online said it would focus on gambling outside the
United States, while 888 Holdings said it was considering its options.

The loss of U.S. business will be hard felt. U.S. residents account for half
a market that is estimated to be worth $15.5 billion this year in "spend"
value, according to the Betting Research Unit at Nottingham Business School.
The spend value is the amount gambling companies win from their customers -
or the amount gamblers lose - and is much less than revenue because most of
the revenue is recycled to gamblers in the form of winnings.

Analysts said the industry was now cleaving in two. On one side are the
London companies that are pulling out of U.S. operations. On the other are
private offshore companies located in the Caribbean, like Jazette,

Britain's Sportingbet and Leisure & Gaming both pulled out of the United
States ahead of a ban on Internet gambling on Friday, each selling their
U.S. operations to private investors for $1. Smaller rival World Gaming
meanwhile said it was impossible to continue in business and called in
administrators. All three companies were rushing to complete the deals
before President George W. Bush signed a bill to prohibit Internet gambling
into law on Friday. Sector leader PartyGaming and 888 have already
announced their exits from the United States. "We are saddened to have to
dispose of such a fantastic business as a result of political actions in the
U.S. Congress," Sportingbet Chief Executive designate Andy McIver said on
Friday. Sportingbet said it received $1 for the U.S. operations and had
discharged liabilities of $13.2 million and avoided closure costs of $14
million. Leisure & Gaming Chief Executive Alistair Assheton led a management
buyout of his group's U.S. operations for $1, rather than close them down
and fire 300 staff. The exit from the United States comes after Republican
legislators delivered a heavy blow to Internet gambling this month when
Congress unexpectedly approved a bill to enforce prohibition of online
gaming. Sportingbet's volatile shares rose by 5 percent in early trading
before falling 12 percent to 57 pence by 1406 GMT, valuing the group at
almost 240 million pounds ($447 million) -- less than a sixth of its value
of 1.6 billion pounds in July before the start of the U.S. clampdown on
Internet gaming.

In the recent movie "Thank You for Smoking," a tobacco lobbyist comes under
fire for working to protect people's right to smoke. A similar movie could
be made about gambling and the villain would be Representative Bob
Goodlatte. The Virginia Republican has been fighting to enact legislation on
Internet gambling for some time, and he can now finally claim a good deal of
success with the passage of HR 4954, a port security bill with an
anti-Internet gambling attachment. Goodlatte's Unlawful Internet Gambling
Enforcement Act (UIGEA) is set to make it illegal for American banks and
financial institutions to process online gambling payments from the United
States. "The passage of this legislation is a step in the right direction in
the fight against online gambling and will help to cut off the money supply
to these illegal outfits," Goodlatte said. It is true enough that the
legislation makes banks suffer the wrath that Goodlatte feels towards the
online gaming industry, but a key question remains. Will tightening the rope
around bankers' necks will really stop online gambling? Following passage of
UIGEA, gaming companies took a beating. PartyGaming, the world's largest
online gaming company, fell out of the FTSE 100 while World Gaming suspended
dealings in its shares due to "uncertainty over its ability to continue
trading." Most of the world's online gaming firms are not located in the
U.S. due to government hostility, but now it appears that even those based
in London and elsewhere are subject to America's dominance in a global
economy.

That's only the short term. In the long term, people who want to gamble
online will find ways to do it, even if it means they have to visit shady
spots on the Web. Government policies that push innocent consumers into
potentially dangerous black markets are misguided and harmful. Goodlatte's
bill should also shame his supporters because it hypocritically exempts
large parts of America's gambling industry, including government-run
lotteries.

We won't be among the mourners when and if President Bush signs a bill to
ban Internet gambling that passed Congress in the early hours of Sept. 30.
The Web has opened up many marvelous horizons: easy, affordable global
communication, fingertip access to a virtually infinite storehouse of
knowledge, and the ability to shop for merchandise in the world's biggest
department store. But there's also a downside to the Internet, as Rep. Jim
Leach, R-Iowa, one of the sponsors of the legislation noted. The problem is
particularly acute for young people who tend to be on the Internet
frequently. "Never before has it been so easy to lose so much money so
quickly at such a young age," he said. The ban, attached to a port security
bill that Bush is expected to sign today, bans most forms of Internet
gambling and makes it illegal for credit card companies and banks to make
payments to those who operate online gambling sites. The legislation exempts
state-run lotteries and the horse-racing industry.

The beleaguered online gambling industry is bracing itself for a wave of
company collapses and redundancies, after World Gaming collapsed into
administration today. It is the first company to crash, following the shock
decision of the US senate to outlaw online gaming last month. President
George Bush is expected to sign the legislation into force later today. All
the online gambling companies are racing to close or sell their US
operations by the time he signs. 888 emerged today as the latest to be
looking for a suitor. Asked if the company would go private, chief executive
John Anderson told Dow Jones: "I think that's got to be looked at." He said
all options are being considered, including opportunities to expand the
business in Europe. Yesterday, Sportingbet sold its US sports betting and
casino business for a nominal $1. The secured creditors of World Gaming,
understood to be Barclays Bank, pulled the plug on World Gaming earlier this
morning and called in administrators UHY Hacker Young. The administrator has
issued a statement saying: "The secured creditor has subsequently concluded
that it is reasonably likely that administration will achieve a better
result for the Company's creditors than would be likely if the Company were
to be wound up." All the directors have resigned. The company has operations
in Antiqua, Vancouver, London but it is not clear how many employees will
lose their jobs. Gibraltar is likely to be particularly hard hit by the US
crackdown. One in ten adults of the island works for the online gambling and
betting industry.

Officially, the bill President George W. Bush will sign Friday is aimed at
making the nation's ports more secure. But the part that's getting all the
attention is about Internet gambling. It includes a big crackdown on online
betting, which is already illegal in most cases. It's been tough to enforce,
but lawmakers said the new provision will take a big chunk out of the
soaring Internet gambling industry. The amendment will stop gamblers from
using credit cards, checks and electronic transfers to cover their losses.
The National Football League was among those backing the measure, while some
banking groups lobbied against it.

European Commission competition officials are crying foul over plans by some
European states to restrict foreign sports betting and gambling services
from operating in their countries. Brussels is considering legal action
against protectionist barriers planned by France, Italy, and Austria that
effectively ban foreign online gaming and casino operators. In total, nine
EU member states face possible action over the issue. Germany, Holland,
Hungary, Denmark, Finland, and Sweden are already under investigation.
Online gambling operations, hard hit by US moves to clamp down on online
gambling that have included anti-gambling legislation and the arrest of key
execs flying through the US, have welcomed the EU's stance. "We hope these
new proceedings will put an end to the witch-hunts against private EU
licensed operators," European Betting Association secretary general Didier
Dewyn said. As a first step in possible proceedings, EU commissioners are
asking for governments to explain their policy on online gambling via an
official request for information, The Guardian reports. The move follows a
barrage of complaints from online gambling firms to EU internal market
commissioner Charlie McCreevy. Each government has two months to respond to
questions asking how they reconcile their policies with EU laws that call
for a free market in goods and services. Possible infringement proceedings
may follow if governments are unable to satisfy Brussels that market
regulations they have applied are "necessary, proportionate and
non-discriminatory". The EU's decision to launch an inquiry does not
necessarily herald a push to liberalise gambling services. National
monopolies might be allowed to operate providing member states can establish
that this is in the public interest. A key ruling by the European Court of
Justice said restrictions on online gambling need to be "consistent and
systematic" so that limiting the market to prevent fraud or combat gambling
addiction is lawful. A number of federal states within Germany have applied
this ruling to restrict the online gambling market.
But Commissioner McCreevy questioned how France can block foreign
competition on the basis of preventing addiction when its online gambling
market has expanded to reach a turnover of ?17bn a year. France has already
been asked to amend an economic patriotism law enacted last year that
restricts foreign investment in a range of industries including defence and
sports betting.

A bid by a pair of private-equity firms to buy Harrah's Entertainment, if
approved, will offer the latest evidence of a flourishing symbiotic
relationship between Nevada regulators and the casino industry. A vital role
of regulators is to set the bar for who is allowed to operate casinos in
Nevada, and to conduct background investigations into their character.
Reputation, honesty and credibility are everything in an industry that is
based on the tracking and handling of cash. That oversight is all the more
important in Nevada, because nearly half of the state's general fund revenue
comes from gambling taxes. For that same reason, Nevada gaming regulators
have a second vital role: to encourage investment in the casino industry.
And for decades, the state's regulators have had to roll with the industry
to accommodate different kinds of companies that want to operate casinos.
After all, what's good for the industry is good for Nevada. Now, regulators
may be asked to review the newest flavor of Strip capitalists - a group of
private investors, including some who prize their privacy. The state won't
want to stand in the investors' way, but at the same time it will need to
make sure that the relevant managers are up to running a huge casino
company. In Las Vegas' early days, when casinos were owned by individuals or
small groups of investors, the regulator's job was relatively simple: Make
sure each investor was qualified to operate the joint.

Beginning in 1967 with billionaire Howard Hughes' purchase of several
casinos from their mob-controlled owners, regulators began to shift their
sights from the few people who owned casinos to major corporations with tens
of thousands of shareholders.

By then, casinos had become a vital contributor to state tax coffers,
forcing regulators to wrestle with the problem of how to exert control over
an industry upon which the state depended.

Thanks to legislation to facilitate Hughes' purchases, regulators
effectively removed the mob from its controlling position in the casino
industry. But disclosure rules and restrictions on trading stock still kept
major corporations out of Nevada until 1969, when the state passed
additional rules allowing public companies to own gaming subsidiaries
without submitting all of their shareholders to background investigations.

Under Nevada's licensing rules that apply to publicly traded companies,
regulators reserve background investigations for key decision-makers such as
executives and directors as well as shareholders owning more than 10 percent
of company stock.

Ordinary stockholders, funds and institutions that own casino stocks aren't
required to be licensed under the premise that they are passive investors
who don't influence how Nevada's casinos are run.

The corporate gaming rules changed the state forever by fueling
unprecedented investment in Nevada. The first major corporations with many
shareholders began to flood into the state after Hughes, acquiring
single-owner properties, building new casinos and generating the vast
majority of the state's gambling revenue.

Wall Street has done well on Las Vegas Boulevard: Today, a pair of publicly
traded companies - MGM Mirage and Harrah's - are collectively worth more
than $25 billion.

And now, Las Vegas is seeing yet a third kind of casino ownership proposal:
private equity companies such as the ones vying for Harrah's. If
consummated, the bid could fuel another sea change by attracting a host of
privately held investment companies that want to own more than just a
partial stake in Las Vegas casinos. And still - even as they promote
industry growth - state regulators will have to subject newcomers to
background checks unheard of in other sectors of American business.

Like corporations with public stock, private equity funds have hundreds,
even thousands of investors. Unlike retail mutual funds, they accept
individual investments in the millions of dollars from pensions, endowments
and wealthy individuals who include prominent businesspeople and
politicians.

While casinos had been eyed for years as stable and lucrative investments,
private equity funds avoided them, unwilling to fill out license
applications more than 70 pages long in which regulators probe managers'
relationships with business associates and even ex-wives.

Indeed, an agency that both promotes gaming and regulates the industry may
seem to be working at cross purposes: The same licensing requirements that
are designed to keep out unscrupulous people such as mob associates and tax
dodgers have also kept out squeaky-clean investment firms with money to burn
but who desire to keep financial details and investors out of the public
eye.

But these groups didn't want to walk away from Las Vegas, so they found a
creative way to use Nevada's corporate licensing rules to pass regulatory
muster - by structuring their deals so that only a few decision-makers are
investigated.

It is their strategy to clump the vast majority of shareholders into
separate entities whose members hold nonvoting shares. Because they are
ostensibly passive investors, regulators don't need to license them, and
instead focus on the few people who direct the funds and who hold voting
shares.

The dual voting structure, while fairly new, has allowed these funds to
invest in Nevada casinos without the state needing to change its
regulations.

With investment banks and fund managers investing millions and even billions
in casinos, regulators don't harbor the same concerns about mob influence or
shady business practices that they did years ago.

Each private equity deal is structured slightly differently and has been
examined to ensure that the key managers making investment decisions are
licensed rather than front men cherry-picked by management to undergo
background checks, Gaming Control Board member Mark Clayton said.

The bid for Harrah's would not only be the biggest deal in history but the
first in years to allow private equity firms to acquire 100 percent of a
Nevada gaming company. Other recent deals have involved partial ownership of
casinos that are still run and operated by experienced Nevada operators.

Regulators still retain the right to investigate any shareholder of a casino
investment - big or small - at any time.

"That's a huge caveat," said Ellen Whittemore, a gaming attorney with Lionel
Sawyer & Collins and former deputy attorney general. "These are great
investment vehicles for Nevada, but the bottom line is that if you have any
investment in a casino you always have the potential that you'll be required
to submit an application.

One of the strongest benefits of bringing gambling to Northeast Ohio will be
the $75 million that can be used by the region to stimulate economic
development, said Joe Roman, president of the Greater Cleveland Partnership.
GCP is one of the groups that crafted the constitutional amendment that is
state Issue 3 on the Nov. 7 ballot. In a pitch Wednesday to the Crain's
editorial board, Mr. Roman touted the $850 million in college scholarships
that his group says will be a significant benefit of bringing first slot
machines and then table games to Northeast Ohio. But he conceded that part
of the reason for his group's support was the belief that there was no other
way to get the economic development seed money GCP believes the region
needs. He compared that to the billboards he sees around the area that
promote gambling casinos in Michigan, New York State, West Virginia and
Canada - and, indirectly, the broader investment in their regional economies
the casinos bring along. He said he couldn't imagine a similar billboard
that read, "Invest in Ohio, We Don't Have Gambling" providing the same
economic boost. The group chose to make the issue a constitutional
amendment, he said, "because we don't have a legislature willing to deal
with the issue." Mr. Roman predicted that, if the issue passes
overwhelmingly in Northeast Ohio, "we'll get table gaming" in Ohio.

Gambling addiction counselors say unplugging the Iowa Lottery's TouchPlay
games has made a big difference in Iowa's gambling climate. They say, when
the legislature banned the machines last March, the calls to gambling
treatment hotlines dropped off. The machines were in more than 6,000
grocery stores, bars and convenience stores. A counselor for gambling
addicts calls them as "the crack cocaine of gambling."

The European Commission today threatened legal action against France, Italy
and Austria for restricting sports betting and gambling services, including
banning foreign online gaming and casino operators. Its move, bringing to
nine the number of EU countries whose gambling legislation is under
investigation, was hailed as a shot in the arm by the ?50bn European betting
sector - several of whose leading executives have been prosecuted for
offering cross-border services. Didier Dewyn, secretary general of the
European Betting Association, said: "How long must EU-licensed and regulated
operators endure legislation which causes wrongful financial harm and
deprives their executives of even the basic right to travel freely in EU
member states? "We hope these new proceedings will put an end to the
witch-hunts against private EU licensed operators." His comments follow last
month's arrest in Monaco by French police of the two co-chief executives of
Austrian online operator bwin on charges of illegally offering gambling
services in breach of national laws guaranteeing a shared monopoly to local
operators PMU and la Francaise des Jeux. There are 2000 illegal casino
websites in France. Charlie McCreevy, internal market commissioner, said the
"official request for information," the first step in putative legal
proceedings, merely sought to discover whether national laws complied with
EU treaty rules on the free movements of services. He said he had received a
large number of complaints from operators.

Mr McCreevy, an ultra-liberal who, with fellow commissioners, initiated a
series of infringement proceedings against EU member states today to enforce
the single market, said the decision did not call into question national
monopolies as such nor push for the liberalisation of gambling services.

The commission, which gave the governments two months to respond, said
countries were still entitled to protect the "general interest" provided
that any restrictive measures were necessary, proportionate and
non-discriminatory.

In a key ruling, used by several German federal states to ban bwin and other
online operators, the European Court of Justice has said such measures need
to be "consistent and systematic" and has allowed restrictions aimed at
supporting public order (the prevention of fraud) or combatting gambling
addiction.

Germany, Holland, Hungary, Denmark, Finland, Sweden and Italy are already
under investigation.

In a sideswipe at French protectionism, Mr McCreevy questioned how the state
could ban European online operators access to the sport and horse-race
betting market in order to prevent addiction when "the French sport betting
market continues to expand and offer more choice and opportunity for
consumers to bet."

France, whose casinos turn over ?17bn a year, was separately told to amend a
controversial 2005 decree, part of the government's "economic patriotism",
restricting foreign investors in key sectors such as defence on public
security grounds. It also applies to casinos.

Italy, which banned overseas online betting in February, was warned by the
commission that its restrictions on "legitimate" operators were
disproportionate - "particularly in the light of the expanding sports
betting market which appears reserved to domestic operators."

Liverpool-based Stanley International Betting, which filed a complaint
against the Italian authorities in February, welcomed the opening of
infringement proceedings which follow a November 2003 ECJ ruling in its
favour.

With the US government cracking down on online gambling, what are the odds
for the industry in America? It's an impressive list: the September arrest
of Peter Dicks, non-executive chairman of Sportingbet; the July arrest of
David Carruthers, chief executive of BetonSports; and legislation passed by
the US House of Representatives in July to prohibit banks and credit card
companies from processing payments to offshore internet gambling sites.
These are, some say, a strong series of opening punches by the US government
in a fight against online gambling. But industry analysts, including
Christiansen Capital Advisors, a market research firm that tracks online
gambling trends, believe it will prove only a glancing blow. The charges
against Carruthers have at least temporarily shut down BetonSports' business
with US customers and sent shockwaves through the rest of the industry.
Some BetonSports rivals, however, insist it is little more than an isolated
case against a company that flaunted online sports betting and took bets
over the telephone, both clearly prohibited under US law.

Maryland supporters of legalizing slot machines have had an outspoken
champion in Gov. Robert L. Ehrlich Jr., but some key gambling enthusiasts
are now putting their money behind his Democratic opponent in the race for
governor. Campaign records show that donations have started going to
Baltimore Mayor Martin O'Malley, who has pledged to support a limited
gambling plan that would allow slot machines at Maryland racetracks. Slot
supporters say O'Malley might have better luck persuading gambling opponents
in the Democrat-controlled House of Delegates to ease their resistance.
"It's my view that, from a political standpoint, anyone in the governor's
office that's a Democrat may have a better chance to deliver on slots," said
Tom Bowman, a veterinarian and horse breeder who served as president of the
Maryland Horse Breeders Association during the years when Ehrlich pushed
hardest to expand legalized gambling. Although Bowman said he has held back
from giving to either candidate so far this year, as have many of the
largest gambling donors, he confirmed that several high-profile advocates
who backed Ehrlich four years ago have turned up at O'Malley fundraisers.
Several key players have started hedging their bets. The Thoroughbred
Breeders and Horsemen's political action committee, for instance, has given
$3,000 to each candidate. Joseph A. DeFrancis, who owns shares of Pimlico
Race Course and Laurel Park, was a major supporter of Ehrlich's in the
aftermath of the 2002 campaign. He donated $2,000 to O'Malley in August and
attended a fundraiser for him last week.

Ehrlich raised more than $60,000 from gambling interests from 2002 to 2004
while he was pushing the General Assembly to approve his sweeping slots
plan. During the past two years, though, O'Malley started closing the gap,
raising more than $12,000 as Ehrlich took in $30,000.

Ehrlich said that he has seen evidence of the change and that it bothers
him.

"They're playing both sides," he said. "I've been saying it for four years:
Left-leaning groups don't play that way. We shouldn't either. People should
be supporting those who agree with their platform."

Asked whether he understood their reasoning -- that a Democratic governor
might be more successful working with the legislature to pass slots --
Ehrlich said he did not.

"If you took that approach, you'd never elect a Republican governor," he
said.

Ehrlich's closest advisers have tried to fight back.

U.S. Sen. George Voinovich thinks he can keep casino gambling out of Ohio
one way or the other. He's not up for re-election this year, but he's
traveling the state spearheading the Vote No Casinos effort that is opposing
a ballot initiative to bring slot machines to Ohio's seven race tracks and
two sites in Cleveland. That initiative, called "Learn and Earn" by its
supporters, is State Issue 3 on the Nov. 7 ballot. Back in Washington, Sen.
Voinovich he is working on a bill with Sen. John McCain, R-Ariz., to make it
harder for Indian tribes to open casinos when state leaders oppose them. The
goal is to ensure that federally protected tribal gambling can't enter Ohio
should Issue 3 fail, as Sen. Voinovich hopes it will. Sen. Voinovich long
has been an opponent of gambling, dating back to the 1980s and 1990s, when
he was mayor of Cleveland and the state's governor. But he especially
opposes the current issue. "This is an enormous windfall for Tower City
Center and Jeff Jacobs," he said, complaining that Issue 3 would specify
exactly which developers will own and operate the two free-standing casinos
that could be built in Cleveland. "If we're going, from a public policy
standpoint, to raise money through casino gambling, this is not the way to
do it."

Sen. Voinovich told Crain's editorial staffers at a Tuesday meeting that his
opposition to state-sponsored gambling stretches back to a distaste for the
Ohio Lottery. He called slot machines "the crack cocaine of gambling," and
said gambling most hurts the people who cannot afford the money they lose.

Sen. Voinovich said he fears that should gambling come to the state, payday
loan businesses will blossom and mortgage foreclosures will rise.

The European Commission said it has asked Austria, France and Italy to
provide information on national legislation restricting the supply of
certain gambling services. The move follows similar requests issued to
Denmark, Finland, Germany, Hungary, Italy, the Netherlands and Sweden. The
commission said it wants to ascertain whether the countries' measures are
compatible with EU rules guaranteeing the free movement of services.

Electronic Clearing House Inc. on Wednesday said a portion of its business
and future results of operations will be affected by the recently passed
Unlawful Internet Gambling Enforcement Act of 2006. The company said it will
phase out any services related to check processing activities for Internet
gaming before the 270-day regulatory determination period expires. The loss
of revenue and net income, arising from these services, will have a
significant negative effect on the company's business and results of
operations in fiscal 2007, the provider of electronic payment processing
solutions said in a statement.

Angry demonstrators and rabbis as well as a ban on gambling failed to stop
the inauguration of Israel's first horse racetrack, as thousands of fans
cheered the four-legged competitors. It's not much at this point - just a
collection of collapsable tents with a makeshift grandstand in the middle of
a field in northern Israel - but as the horses turned the final corner
before the finish line on Wednesday, it looked, sounded and smelled like the
real thing. That's what bothers the detractors.
A few young animal rights activists broke onto the track, charging that race
horses are abused, and had to be dragged off by police. Five were arrested.
One of Israel's chief rabbis condemned the event as frivolous. And a large
sign overlooking the new track reminded spectators that horse race gambling
is illegal in Israel.
Even so, organizers of the event and investors called the turnout a success
and said they it demonstrated the need to legalize gambling and build up a
permanent horse racing industry. "The fact that people are running here into
the stadium, it testifies that it's a need and that they want to support it
and they want it to happen," said Danny Atar, head of the Gilboa Regional
Council, who is leading the push to have the sport legitimized. The debate
over horse racing dates to 2004, when Israel's parliament passed a law
allowing construction of race tracks. Animal rights activists with a group
called "Hakol Chai" filed an appeal with the Israeli Supreme Court against
the law. A hearing is scheduled in December.

The opponents gained a key ally when Sephardic Chief Rabbi Shlomo Amar
issued a religious ruling against horse racing, calling it frivolous
activity and noting its association with gambling and allegations of cruelty
to animals.

Some experts dispute the cruelty charge, claiming that the valuable race
horses are among the best kept animals in the world.

Just as the ban on gambling does not deter Israelis from placing millions of
dollars in bets on Internet gambling sites and illegal casinos in Israeli
cities, gambling was part of Wednesday's horse race. Fans said they knew of
bets placed in secret among private groups and friends.

"Gambling is the main starter and the main economic way to make the race
track succeed," said Atar, who said he did not know that illegal gambling
was taking place. He hoped that in three to four months the Israeli
government would approve horse race gambling.

Israeli businessman Ronen Kristal, who invested the first $700,000
(?560,000) in the track, said other investors are waiting for gambling to
become legal. He said it would cost about $14 million (?11.2 million) to
finish the project, which is expected to create about 3,500 jobs.

"One thing you need to realize is that this industry has always been under
siege and probably always will be," said Sue Schneider, CEO of River City
Group in her welcoming remarks to attendees of the European I-Gaming
Congress and Exhibition (EiG) Wednesday morning. More than 1,000 delegates
are in attendance at the Clarion Events ATE/River City Group produced event
this week where the theme is "coming together." Staggering problems have
lately emerged on both sides of the Atlantic for the global companies that
deal in the interactive gambling space. On one side European Member States
have begun taking more aggressive actions to prevent foreign companies from
offering Internet gambling services to their citizens, while on the other
the American government has passed legislation aimed at prohibiting most
forms of Internet gambling altogether. Things are complicated further by
the fact that several online gambling companies listed shares on public
stock exchanges in 2005 and 2006. The listings were hailed as a means to
bring more credibility and transparency to the companies, but ironically
those that listed now face problems that their private rivals may be able to
sidestep-- if they dare. "There are personal risks and there are corporate
concerns, and you have to be aware of how those color decisions," said
Schneider. In the last two weeks several of the publicly-traded firms such
as PartyGaming and 888 responded to the American prohibition by shutting
down their operations to American consumers. Most of the private firms on
the other hand are taking a wait-and-see approach to the American
prohibition and may be hoping it will prove unenforceable. Although
expansion in Europe has been a goal in which a lot of online gambling
companies have succeeded in 2006, Member State governments would prefer to
put an end to the expansion so that their own domestic operators can
dominate the market.

Following Schneider on the program was Norbert Teufelberger, one of the
co-CEO's of European betting giant bwin.com who was arrested in France last
month on charges related to offering betting to French citizens without a
proper license.

Tuefelberger echoed EiG's underlying theme of "coming together" by revealing
that his company was working with others to formulate a two-year lobbying
and public relations campaign. "We will bring information to the
decision-makers," he stated.

Schneider noted in her remarks that a number of regulators from EU
governments and representatives from state-run companies are attendance. No
American regulators are in attendance.

When asked later that evening about her impression of what was going on at
the conference Schneider replied: "There is a lot of discussion among the
delegates about what sort of changes the may need to take place among their
companies and how they're going to handle that sort of thing."

When Congressman Bob Goodlatte introduced his anti-gaming legislation in
February, he sent a letter to his Republican colleagues in the House of
Representatives with a stark message: This is the bill Jack Abramoff does
not want you to sign. Mr Goodlatte's invocation of Mr Abramoff, the once
powerful Republican lobbyist who was engulfed at the time in a wide-ranging
lobbying scandal and who has since pled guilty to corruption charges,
re-invigorated the criticisms of online gambling, says one Washington
lobbyist. and nothing was going on until Jack pled out and admitted to
things in respect to 2000," the lobbyist says, referring to Mr Abramoff's
successful lobbying campaign against an earlier version of Mr Goodlatte's
bill on behalf of eLottery, a client. Ultimately, lawmakers who wanted to
prove their independence from Mr Abramoff's biggest cause in Washington,
gambling, paved the way for the passage of the Unlawful Enforcement Gambling
Act.
But other forces allowed the bill, which had been passed in the House but
which was not expected to gain traction in the Senate, to be attached to an
unrelated port security bill and passed hours before lawmakers left
Washington to campaign ahead of November's mid-term elections. At the centre
of those efforts was Senate majority leader Bill Frist, who had sought to
attach the bill to defence legislation only to be rebuffed by Senator John
Warner, chairman of the armed services committee. Lobbyists who followed the
progress of the bill say Dr Frist wanted to attach the bill to legislation
guaranteed to pass for a number of reasons, including the fact its passage
would sit well with conservative voters ahead of his expected run for
president in 2008. Dr Frist may have pushed for the bill, observers say, in
the hope it would generate support from fellow lawmaker Jim Leach, an Iowa
Republican and critic of online gambling, whose support could be crucial for
the Tennessee Republican's presidential bid in the important Iowa primary.

Leading the corporate lobbying effort in support of the bill - and in
opposition to the efforts of UK companies such as SportingBet and
Partygaming - was the National Football League, which said it wanted to
crack down on sports betting because it hurts the integrity and perception
of football in America. Public records show the NFL has spent more than $3m
on lobbying since 1998. Last year, it paid one Washington company, Covington
& Burling, $700,000 to lobby on gambling and other issues. Two of its
lobbyists, Martin Gold and Bill Wichterman, are former senior aides to Dr
Frist.

While lobbyists hired by Sportingbet and Partygaming believed passage of the
bill was a long shot, the US Chamber of Commerce, another powerful lobbying
group, argued passage of the legislation would create a regulatory burden on
financial institutions that will now be charged with scrutinising
transactions to see if they are gambling-related.

But the pleading of the US Chamber was ignored. One day before Saturday's
vote on the legislation, two lobbyists who followed the bill alleged the
last-minute intervention of the White House, which encouraged Republican
senators to support the legislation, gave the bill the momentum it needed to
be attached to the port security bill and passed by the Senate.

Both lobbyists contend the White House sought passage of the bill following
the release of a bipartisan congressional report that documented contacts
between the White House and Mr Abramoff and his partners, including contacts
between the lobbyist and Karl Rove, chief political strategist for George
W.Bush,president.

"What put it over the top is when the White House, in response to the
Abramoff story, said we need this in the ports bill," one of the lobbyist
says.

If a story appearing today in the Financial Times is accurate, the
presidential signing into law of the Unlawful Internet Gambling Enforcement
Act is likely to be a slam-dunk. The respected publication carried a story
quoting unidentified lobbyists who summarised the events leading up to the
presentation of the Goodlatte Bill, including the exploitation of the Jack
Abramoff lobbying scandal as a spur to get politicians to sign up for the
anti-online gambling measure. It covers the House approval of the combined
Goodlatte and Leach bills and how this stalled in the Senate before being
picked up and pushed by Senators Kyl and Frist, ultimately leading to the
attachment of the compromise measure to the must-pass port security bill and
the early morning approval of both. The article also carries the startling
news that the attachment to the port security bill was encouraged by the
White House, according to two lobbyists who told the Financial Times that
this was an important element in the whole process. The FT reports: "One day
before Saturday's vote on the legislation, two lobbyists who followed the
bill alleged the last-minute intervention of the White House, which
encouraged Republican senators to support the legislation, gave the bill the
momentum it needed to be attached to the port security bill and passed by
the Senate. "Both lobbyists contend the White House sought passage of the
bill following the release of a bipartisan congressional report that
documented contacts between the White House and Mr Abramoff and his
partners, including contacts between the lobbyist and Karl Rove, chief
political strategist for George W. Bush, president."

The fallout from new laws restricting internet gaming in the US cast a pall
further across the City yesterday when two more London-listed companies
suspended operations there. Fairground Gaming and Leisure & Gaming, which
run casino and poker websites, joined the mounting casualties from
Congress's shock decision this month to ban banks and credit card companies
from processing payments from internet gamblers in US states where it is
illegal. FireOne, whose shares change hands on the Alternative Investment
Market, said yesterday it too would no longer process US credit card
payments relating to internet gaming as soon as the law comes into force.
That is expected to happen in a matter of weeks, once President George Bush
signs the Unlawful Internet Gambling Enforcement Act. Meanwhile, one of the
City's leading law firms reportedly withdrew from advising on the sector.
Slaughter and May, legal counsel to more of Britain biggest companies than
any other firm, was unavailable to comment on suggestions it would no longer
advise internet gaming companies after the US clampdown. Many of the online
gaming groups derive the lion's share of revenues from across the Atlantic.
The US ban has, therefore, hit the industry hard. Shares were hammered last
week, with more than £3bn wiped off their valuation on the London market in
a day. Yesterday, Fairground fell 8.5p to 14.5p, Leisure & Gaming crept
0.75p higher to 8.75p, and Fire- One lost 17.5p to 50p. Trading in the
shares of World Gaming, another internet gambling company, was suspended on
Monday after it warned that in light of the US legislation, which in effect
turns off 95 per cent of revenues, it may be driven out of business.

Less than a week after admitting it may be in breach of loan conditions,
World Gaming asked for trading in its shares to be suspended "due to a
fundamental uncertainty over its ability to continue trading".

Unlike World Gaming, Fairground insisted it was "confident" its remaining
operations, which account for just 30 per cent of sales, were profitable,
and stressed that it had sufficient cash to go forward.

"Urgent" cost cuts are imminent and a tie-up with another company may be on
the cards. Fairground is reviewing its overall strategy. "We are proceeding
with appropriate caution in evaluating opportunities for further
geographical diversification," the company said.

Leisure & Gaming is mulling whether to suspend, close or sell its US
operations and has received approaches. Talks continue, while it
concentrates on its UK and Italian businesses. Job will go at FireOne, which
is restructuring and paring costs.

BRITISH firms continued to feel the strain of a crackdown on internet
gambling in the United States as two more firms abandoned operations across
the Atlantic.
London-based casino Leisure & Gaming said it was "no longer appropriate" for
the company to accept US customers after Congress approved the Unlawful
Internet Gambling Enforcement Act. It also revealed it was considering
selling its US operations after receiving "a number of approaches", sending
its shares up nearly 10% yesterday. Shares fell 86% last week in the
aftermath of the new legislation. There was a less positive response to
FireOne's decision to pull out of the US and its shares dived by more than a
quarter. The company, which provides payment services to the online gaming
sector, has lost 72% of its value since Monday last week. The Bill passed by
Congress specifically outlaws banks and credit cards processing payments to
internet casinos. FireOne said: "The Act will have a significant negative
impact on the business." It said it expected President George Bush to sign
the Bill shortly.

Prior to analyzing how the new federal law interacts with state gaming law,
it is necessary to have a basic understanding about the two constitutions by
which we are all bound. Every state has a constitution that is a body of
laws that the citizens of that state must follow. There is also a federal
Constitution that all citizens of the United States must follow. (The
federal Constitution and the US Constitution mean the same thing.) We are
each subject to both the laws of our state and federal laws. The Tenth
Amendment to the United States Constitution states that: "The powers not
delegated to the United States by the Constitution, nor prohibited by it to
the States, are reserved to the States respectively, or to the people." The
Tenth Amendment was intended to confirm the understanding of the people at
the time the Constitution was adopted that powers not granted to the United
States were reserved to the states. Historically, the states have
successfully regulated gambling within their borders, as that is seen to be
a power reserved to the state. Almost every state has some form of legal
gambling, be it a casino, lottery, video, lottery terminal, horse wagering,
bingo, or other forms of gambling. As to the issue of which law applies
(state or federal), the US Supremacy Clause states that the "Constitution
and the laws of the United States...shall be the supreme law of the
land...anything in the constitutions or laws of any State to the contrary
notwithstanding." This means of course, that any federal law - even a
regulation of a federal agency - trumps any conflicting state law. Finally,
the Commerce Clause makes Congress the guardian of interstate commerce.
Article I, Section 8, Clause 3 of the US Constitution states in relevant
part: "The Congress shall have power to... regulate commerce with foreign
nations, and among the several states .."

Every federal law must have a constitutional basis in order to be valid, and
the Commerce Clause has been widely used as a constitutional base for
federal legislation of every type. It has been predicted that the Commerce
Clause will ultimately regulate many activities on the World Wide Web.

Those three constitutional mandates taken together basically mean that any
federal law must be constitutionally based. If it is, and if there is a
federal law on a subject, it preempts state law. The federal government is
to regulate commerce, but powers not granted to the federal government are
"reserved to the states. And laws relating to the health and welfare of its
citizens usually fall within the purview of state law."

So what powers does the federal government have regarding online gaming law?
Traditionally, the federal government has stayed out of the gambling arena
and left its regulation to the states. However, when gambling crosses into
different states or countries, the federal government has a legitimate
interest and therefore gets involved.

The Unlawful Internet Gambling Enforcement Act

As I explained in a prior article, section 5361(b) of the Unlawful Internet
Gambling Enforcement Act specifically states that nothing in this new law
shall be construed as "altering, limiting, or expanding any Federal or State
law. prohibiting, permitting or regulating gambling within the US."

In other words, the language of the statute confirms that this new law does
not change existing gaming law. The federal government has merely enacted a
law that attempts to enforce state or federal laws already in existence.

The operative section of this new legislation states that "No person engaged
in the business of betting or wagering may knowingly accept." electronic
transfers, credit cards, etc. where a person is engaged in "unlawful
Internet gambling." This new law applies, if and only if, the gambling is
already illegal under current state or federal law.

Whereas my previous article focused on current federal law, this one
addresses applicable state laws.

State Gaming Law

From the letters I have received, I am concerned that some readers do not
know the gaming laws of their states.

A few states have passed statutes making it a misdemeanor to participate in
Internet gambling. For example, Illinois passed legislation that
criminalized the activity of the individual bettor, making it a Class A
misdemeanor (720 ILCS 5/28-1 (2001)(a)(c)).

This legislation was ridiculed by deputy district attorneys, who would be
the enforcers of this law, causing The Chicago Sun Times to conclude that
the legislation "has bark and no bite" and that "without cyber cops
monitoring households and their computers, the law will be difficult to
enforce."

To my knowledge, there has not been one prosecution in those states that
make it unlawful to play online poker in their state.

Problems with Enforcement

In a nutshell, the reason it is almost impossible to enforce a law
prohibiting a gambler from playing poker online is because prosecutors are
hard-pressed to come up with admissible evidence.

A criminal case must be pleaded and proved with specificity. What this means
is that a crime must be alleged to have occurred on a specific date in a
specific place, in order that the accused can lodge a defense. How could a
state prove that one was playing poker on a certain date and time in its
jurisdiction?

First, a county prosecutor would have to have sufficient information to file
a lawsuit against an individual and then prove that the crime occurred
within that county. With the advent of the Internet and laptop computers, it
is almost impossible to prove that someone was playing poker in a certain
jurisdiction. Many gamblers travel around the country to different venues.
The government would have an extraordinarily difficult time proving from
where a poker site was accessed. If a prosecutor cannot prove jurisdiction,
the case gets thrown out of court at its inception.

Next, even if it could be proven that a certain computer was used, the
identity of the user must be proven beyond a reasonable doubt. To prove the
user's identity, the prosecutor would have to provide first-hand knowledge
regarding who was at the computer playing poker. Also, subpoena power is not
available overseas, meaning that an offshore online site would not turn over
its records regarding who was playing and when.

The state cannot come into one's home without "probable cause" to believe a
crime was being committed, which would entitle it to have a search warrant
signed by a judge. The search warrant must be based upon probable cause,
which is defined as objective facts that raise in the mind of a reasonable
person the probability that a crime is being committed. It would be nearly
impossible to demonstrate probable cause to believe a crime was being
committed.

Finally, considering that some people play one- and two-penny poker, it
would be embarrassing for a prosecutor's office to dedicate its scarce
resources to catch a penny-ante online gambler, while murderers and rapists
are on the loose.

The State of Washington Makes Online Gambling a Felony

It is important for our readers to understand that Washington did make it a
felony to play online poker in their state. Although no entity appears to be
enforcing this law, it does exist.

On March 28, 2006, the state of Washington passed a law prohibiting Internet
gambling, which went into effect on June 7, 2006. The Washington bill
upgrades online gambling from a misdemeanor to a class C felony.

Gambling Commission Director Rick Day and State Senator Margarita Prentice,
who sponsored the legislation, have publicly stated that the aim of the law
is not directed toward the online gambler. Day said that jailing small-time
online gamblers is "not the focus of our work." Day said his priorities are
to go after national and international promoters or operators based in
Washington state. Evidently he thinks gamblers are like children, needing
protection. He has publicly stated that he wants to protect gamblers from
sites that won't pay, colluders, and money launderers.

In my opinion, this offensive, overbearing law is unconstitutional and needs
to be challenged in a Washington court. Besides the fact that it attempts to
legislate morality, the law is inconsistent with other Washington laws that
allow gambling in brick-and-mortar casinos. The prohibition does not include
online horse-race wagering, so that certain forms of online gambling are
still legal where the state makes money. These issues will have to be
hammered out in court. I eagerly await the first lawsuit and hope to be
personally involved.

Furthermore, the sentencing scheme is ridiculous. Playing poker online in
Washington has been deemed a class C felony, punishable by an amount not to
exceed $10,000 and/or confinement in a state correctional institution for up
to five years.

Other class C felonies in Washington include certain degrees of rape, child
molestation, stalking, bestiality, making deadly threats, failure to
register as a sex offender, theft, assault on a child, custodial sexual
misconduct, sex and labor trafficking, and the list goes on.

This means that under Washington law, a penny-ante poker player could
ostensibly receive the same sentence as one involved in certain types of
child molestation. This violates the Eighth Amendment's proscription against
cruel and unusual punishment. Allow me to explain.

In 1977, there was a law in Georgia that made rape punishable by death. In
the famous case of Coker v. Georgia, the US Supreme Court ruled that a
sentence of death for the crime of rape of an adult woman was grossly
disproportionate and excessive punishment forbidden by the Eighth Amendment
to the US Constitution. A sentence cannot be disproportionate to the crime.
This issue will also have to be tested in court.

Regardless of what we all think about the Washington law, it currently
exists. The next question is how it relates to the Unlawful Internet
Gambling Enforcement Act.

How Does the Federal Enforcement Act Interact with State Law?

Only in the case where a state makes it a crime to play poker online, the
new statute (if signed into law, of course) also makes it a crime for the
"person engaged in the business of betting or wagering" to "knowingly
accept" funds. As I have stated before, this rule does not apply to the
online gambler, but rather, to the online sites.

In other words, where Washington makes it a crime to play poker online, the
federal statute makes the operator of a site liable for accepting payment.
However, since all gaming sites are offshore and not subject to our laws,
this is a law with no teeth.

Recognizing that the US has no jurisdiction offshore, the bill ends in
section 803 by saying that the US government should "encourage cooperation
by foreign governments." Dream on.

People in the gaming world already know that a place like the Isle of Man
does not feel sympathy with US laws and refuses to enforce a violation of a
US law where no similar law exists there. As a matter of fact, the Isle of
Man was one of the first jurisdictions in the world to introduce legislation
specifically designed to benefit gambling and e-gaming firms as well as
protect consumers. The last thing they would consider is cooperating with US
antigaming laws.

In sum, the 2006 Enforcement Act does make it a felony for an owner or
operator of a site to accept money for gambling where it is already illegal
(that is, Washington), but since all gaming sites are located outside of the
jurisdiction of the United States, this portion of the law is, in all
practical terms, unenforceable.

In a press statement titled "Americans Still Free to Gamble Online" the
Interactive Gaming Council, a trade association for Internet gambling
operators, pointed to important aspects of the new US legislation this week.
The IGC statement paints a background to the law whereby "Literally in the
dark of night, without debate and far from public scrutiny, Republican
leaders in Congress added an Internet gambling prohibition bill to
completely unrelated, but important, legislation on port security. Without
even reading the tacked-on provisions, legislators passed the entire measure
before adjourning for their election recess." But it is important to note,
the statement continues, that individual American players are still free to
gamble online. The prohibition bill does not make it a crime for the
individual participant. The focus of the bill is on the financial
transaction - the transmission of money from the player to the operator of
the gambling site. American online gamblers can "...continue to play without
fear of federal prosecution. However, some of their favorite sites may no
longer accept their wagers, as many of the publicly traded online gambling
companies have announced that they would stop taking American bets." "This
bill doesn't do anything to protect American consumers who choose to enjoy
Internet poker and other games," said Keith Furlong, deputy director of the
IGC. "But the immediate effect is to drive the industry further underground.
Gambling sites will devise new methods for getting money from / to a market
where players have shown a resilient demand for this type of entertainment.
"The sad thing is, however, that many of the largest and most responsible
companies, some of whom are major public companies listed on the London
Stock Exchange, are being forced to stop providing real-money games.

"This will prove to be a classic case of unintended consequences. In the
guise of protecting vulnerable Americans - minors who want to gamble and
adults who can't control their gambling - Congress has actually heightened
the risk to these groups. It has driven away the operators who followed the
most socially responsible practices. It has also increased the possibility
of online gambling being used for money laundering, because it has outlawed
the most easily tracked methods of payment."

"With few exceptions, U.S. states have demonstrated over many years that
they can successfully regulate the bricks-and-mortar gambling industry,"
added Rick Smith, executive director of the IGC. "That industry employs
thousands of people and generates millions of dollars in tax revenue. The
same principles could have been followed in the Internet gambling industry.
With licensing and rigorous regulation of online gambling sites, rather than
futile attempts at prohibition, governments can ensure that games are fair,
operators are honest and solvent and vulnerable players are protected. And
the governments could have reaped millions in taxes."

The IGC comments that the U.S. Congress has demonstrated little interest in
objectively researching online gambling before attempting to pass laws
against it. "In fact it specifically rejected attempts to include provisions
to study the possibility of regulation," the statement claims.

"This was a sneaky election ploy," Furlong said. "It's no coincidence that a
ban on Internet gambling is part of the 'family values' platform of the
extreme right, which wants to distract voters from real problems, such as
the war in Iraq, and at the same time impose its moral agenda on Americans,
depriving them of their freedom of choice."

The statement goes on to question the motives of major proponents of the
legislation such as Rep. James Leach and Senate Majority Leader Bill Frist
of Tennessee, who led the weekend manoeuver to pass the ban, saying
".....these moral crusaders showed their true political colors by exempting
Internet wagering on horse races and lotteries from their bill. In many
states, people are free to gamble online as much as they want on U.S. horse
races and state lotteries. In fact, in a research report in March, an
investment bank claimed that the U.S. horseracing industry now generates
over 15 percent of its revenue from online wagers.

"What a contrast between the U.S., which after all went through a
notoriously unsuccessful attempt to ban alcohol, and Britain, which is
methodically preparing to license and regulate online gambling, starting
next year," Smith said.

Three more online gaming companies said today they are suspending operations
in the US after the Senate passed legislation outlawing gambling on the
internet.
Fairground Gaming said it would stop taking bets from customers in the US as
soon as President Bush signs the Unlawful Internet Gambling Enforcement Act
into law. He is expected to do so this week. Fairground, which derives 70%
of its revenue from the US, said it was reviewing its strategy in the light
of the new legislation and was "attending urgently to appropriate
cost-cutting measures" but had "adequate cash reserves going forward".

Cincinnati and Columbus are on opposite sides when it comes to a ballot
initiative that would permit gambling in Ohio. Elected officials and
business leaders in Cincinnati said Monday they support a ballot initiative
to permit gambling in Ohio, a sharp contrast to the Columbus Chamber and
Columbus Partnership's opposition of Issue 3. If voters approve the
amendment, it would allow for as many as 3,500 slot machines to be installed
at each of Ohio's seven racetracks, including Scioto Downs and Beulah Park
in Central Ohio, and two casino-type gaming parlors in Cleveland. A portion
of the gambling revenue would be used to fund college tuition grants. The
Greater Cincinnati Economic Development Fund, comprising civic and business
leaders, came out in support of the proposed amendment to the Ohio
Constitution, saying it would provide more funds for college scholarships
than the state legislature would be able to spend. "Any money that this
generates will put us ahead of the game compared to where we will be without
it," State Rep. Bill Seitz, R- Cincinnati. The initiative is also backed by
the Ohio Learn and Earn Committee, whose proponents say 30 percent of the
gross revenue from gambling revenue would go toward college scholarships.
Learn and Earn is forecasting the slot machines would bring in $2.84 billion
a year, generating $852.7 million a year for the tuition grants, which could
be used at any Ohio college or university. Those opposing the initiative,
including the Columbus Partnership, a Central Ohio business coalition of top
executives from some of the region's largest companies, and the Columbus
Chamber, say amending the state constitution to allow gambling at nine
specific sites would ordain those businesses as winners in the economy and
is not good public policy.

In the high-stakes poker game of politics, online gambling lobbyists lost a
monster hand late last month after Congress passed legislation prohibiting
financial institutions from making payments to online gambling sites. The
long-standing issue came to a head after presidential hopeful Senate
Majority Leader Bill Frist, R-Tenn., became the torchbearer for conservative
groups lobbying to ban Internet gambling. Despite repeated attempts by
gaming groups such as the Poker Players Alliance and the International
Interactive Alliance to stymie the debate, Frist's maneuvering proved too
difficult to overcome. After unsuccessfully tacking the bill onto the
defense authorization measure earlier in the week, Frist and House Speaker
Dennis Hastert, R-Ill., were able to persuade the Republican leadership to
add the measure to the Port Safety Act. Passed in the wee hours of Sept. 30,
before Congress went into recess, the Internet Gaming Prohibition and
Enforcement Act prohibits banks and financial institutions from processing
payments for online gambling companies. Congress exempted state lotteries,
fantasy sports leagues, horse race betting and Indian gaming from the
legislation. "The politics of the moment got the bill passed," says Frank
Fahrenkopf Jr., head of the American Gaming Association. The AGA, which had
long been against regulating online gambling, did an about-face in April,
advocating for the first time that Congress look at whether the technology
exists to regulate online sites.

"While we were neutral [in the debate], we really thought the better way to
go was a study commission," says Fahrenkopf.

The bill, eight years in the making, was a huge victory for social
conservative groups and professional sporting leagues. They persuaded
lawmakers to ante up and overcome any lingering Abramoff mystique. Former
lobbyist Jack Abramoff, who represented eLottery Inc., was credited as one
of the largest contributors to the defeat of a similar ban on online
gambling in the House in 2001.

In the past five legislative sessions, bills banning online gaming have
passed the Senate twice and the House once, just never at the same time.
Advocates including Reps. Jim Leach, R-Iowa, and Bob Goodlatte, R-Va., and
Sen. Jon Kyl, R-Ariz., have historically tried different legislative
stratagems to pass the bill. But this time, Leach got Frist to promise to
bring to the floor an online gambling ban while Frist attended a field
hearing in July in Iowa, site of the first presidential caucus in 2008.

Currently, it is illegal for online gambling companies to operate in the
United States or for U.S. residents to place bets on the Internet, with the
exception of parimutuel horse racing, which enjoys an exemption from the
law.

Frist's former aide Martin Gold of Covington & Burling led the charge for
the National Football League, assisted by National Basketball Association
lobbyist Frank Donatelli of McGuireWoods. While they pushed for the overall
ban, Gold and Donatelli made the case to lawmakers that fantasy sports
leagues should be left untouched.

"It's been 10-plus years that the NFL has been supporting legislation," says
Joe Browne, an NFL executive vice president. "We don't believe that gambling
of any sort is healthy for our league -- that it goes to the integrity of
the NFL and, perhaps just as important, the perception of the integrity of
our games."

France, Italy and Austria will this week be formally censured by the
European Commission for restrictive laws on gambling, the latest move in the
fierce global battle between governments and private sports betting and
gambling companies. The intervention will come as a rare glimmer of hope for
an industry seriously damaged by a series of regulatory blows, and from the
high-profile arrest of senior executives on both sides of the Atlantic. In
Europe, gambling operators have long complained of the obstacles they face
when trying to enter markets outside their home state - normally a
fundamental right for businesses in the EU.

San Jose City Councilman and mayoral candidate Chuck Reed Monday called on
opponent Vice Mayor Cindy Chavez to refuse $55,000 in campaign donations
from Indian gambling interests. Flanked by former Mayor Tom McEnery and
Deputy District Attorney David Pandori, Reed said he was "sounding the alarm
to warn of a threat to San Jose's quality of life. Gambling money is being
used in San Jose politics." Chavez said she had no knowledge of the money.
The money was raised by the local Democratic Party. Reed was referring to
the Oct. 5 filing by the Santa Clara County United Democratic Campaign which
listed a $30,000 donation from the Sycuan Band of the Kumeyaay nation, dated
Sept. 30, and a $25,000 donation from the California Nations Indian Gaming
Association Sovereignty Protection Fund dated Sept. 29. Reed demanded to
know who solicited the money, why and what promises were made to the donors.
He said that the donations could be the first step toward locating a casino
or other gambling operation in Santa Clara County. Democratic Party Chairman
Steve Preminger says the money was not solicited. It was volunteered by the
Indian gaming groups to be used to support State Treasurer Phil Angelides,
the Democratic Candidate for governor. "None of that money will be used in
the Chavez campaign," he said.

But Preminger could not say how the money would be segregated.

The party does not show any funds spent on the Angelides campaign since the
Indian gaming funds were received. Earlier, on Aug. 4, the party spent $600
on materials for signs supporting Angelides, who is running against
incumbent Republican Arnold Schwarzenegger.

Asked if she was concerned about the use of Indian gambling money on her
behalf, she said, "I have nothing to do with this."

Two online gambling firms have announced that they are suspending their
operations in the US ahead of the imminent implementation of new laws
restricting internet gaming. In separate statements released this morning,
Fairground Gaming and Fireone said that they would immediately cease trading
in the US once the unlawful internet gambling enforcement act had been
ratified. The legislation, due to be approved by US president George Bush in
the near future, makes it illegal for banks and credit card companies to
process gaming payments. Online gambling firms, which make a great deal of
their profits from the US market, have seen their share prices plummet since
the new law was adopted by the US congress. Fairground Gaming said that it
would suspend the company's online casino and poker games to its US-based
customers following the implementation of the legislation, while Fireone
said that only non-US internet gamblers would be able to use its
multi-currency credit and debit card and FirePay electronic wallet
processing facilities. Both companies said that they were planning to
restructure their businesses and cut costs in the wake of the US
legislation.

Fireone said it expected the law to have a "significant negative impact" on
its business and had "embarked upon a restructuring of its operations and
cost base" as a result.

Fairground Gaming said it was "confident" that its non-US operations, which
account for 30 per cent of the company's turnover, were profitable, but
stressed it attended to "urgently" introduce appropriate cost-cutting
measures.

The company, which stressed that it had enough money to continue trading,
added that it was "evaluating opportunities for further geographical
diversification" in light of the US ban on internet gambling and was
reviewing the strategy of consolidation.

The announcement by Fireone and Fairground Gaming follows yesterday's
announcement by World Gaming that it has asked the London Stock Exchange to
cease trading in its shares due to uncertainty about its future.

Ministers want to make Britain the world centre of internet gambling,
documents released by Whitehall showed today. The records showed that
ministers and officials have met internet gambling tycoons and their
representatives no less than 26 times over the past two years. The details
suggest that the Government is engaged in a campaign of cosying up to online
gambling concerns as intense as the effort to attract casino firms to set up
large-scale new gaming resorts in Britain.
Labour's aim is that 'Britain should become a world leader in the field of
online gambling', the papers said. The closeness of ministers to gambling
interests has brought the role of Deputy Prime Minister John Prescott in
particular under scrutiny. Mr Prescott has been criticised since failing to
register hospitality and the gift of a cowboy outfit from Philip Anschutz,
the tycoon hoping to open the country's first supercasino in the Millennium
Dome. The release of evidence of links between ministers and online gambling
interests comes just as the internet gaming firms have run into deep trouble
in the United States, where arrests of British internet gambling executives
have been followed by a new law which would stop American punters from using
their credit cards on line. Among recent meetings attended by ministers are
talks between gambling minister Richard Caborn and heads of the Party Gaming
and 888.com group in Gibraltar. Mr Caborn flew to the Rock at taxpayers'
expense in July. Culture Secretary Tessa Jowell is scheduled to run a
gathering of politicians from around the world at Ascot racecourse at the
end of the month which will discuss regulation of the internet industry. The
papers released under Freedom of Information rules show that the
Government's aspirations were set out in a briefing note written for Mr
Caborn before a meeting with Mark Davies, managing director of the Betfair
firm, last July.

The briefing said: 'It is a government-wide policy, and that includes Her
Majesty's Treasury, that Britain should become a world leader in the field
of on-line gambling, in order to provide our citizens with the opportunity
to gamble in a safe, well-regulated environment.'

The safety of internet gambling sites has been under question in the wake of
a number of trials in which internet gamblers have mounted up massive
losses.

In August, gaming addict Bryan Benjafield was jailed for stealing £1 million
from his bosses to use for internet bets.

Benjafield, a 23-year-old bookkeeper, was losing as much as £17,000 a day on
horse racing, football matches and casino games while earning £16,000 a
year.

Jailing him for five years, Judge Andrew Langdon said: 'It says something
for the power of your addiction to gambling that despite the low rate of
return on your mindless betting, you carried on despite the obvious
consequences.'

The judge added: 'The ease with which a desperate man addicted to gambling
could spend enormous sums is bluntly staggering. Internet or online gambling
has made it much easier, regretfully, for enormous sums to be spent
unthinkingly.'

Internet betting firms lost more than £4 billion off the value of their
share prices last week after the legislation from Congress meant an
effective shutdown of US operations. Exile from America - where sports
betting has always been viewed with much deeper suspicion than in Britain -
would mean the firms must concentrate more strongly on the British market in
order to keep profits flowing.

Online firms which rely on payment by credit card must currently operate
from offshore. But from next September they will be allowed to operate from
British bases under British regulation.

The Government's attempt to lure the firms into Britain has already meant
they will face a tax of 15 per cent on gross profits, the same taxation
applied to traditional bookmakers, and a rate regarded by bookmakers as
extremely generous to the internet firms.

Shadow Culture Secretary Hugo Swire accused ministers of favouring the
gambling industry over the interests of the public.

'Making Britain the world capital of on-line gambling is a strange
objective,' he said. 'The whole point is to make sure we have regulations to
prevent problems with gambling.

'Tessa Jowell and her department have been asleep to the problems of on-line
gambling.'

Mr Swire added: 'Yet again Miss Jowell and her officials appear to be
working for the benefit of the gambling industry.'

The US Congress has passed tough new federal restrictions on online
gambling, including measures that prohibit US gamblers from using credit
cards, cheques and electronic fund transfers to settle online wagers. The
move came just hours after Peter Dicks, former chairman of Sportingbet, the
British internet bookmaker, was freed by a New York court, signalling defeat
for Louisiana's attempt to enforce its law against online gambling and
increasing doubts about the ability of individual US states to prohibit the
practice. But thanks to the new legislation, pushed through Congress by
Republican senators, relief for the industry proved to be short-lived. "This
enforcement provision provided by this bill will go a long way to stop these
illegal online operations," said Jon Kyl, Republican senator for Arizona,
who led the push for action together with Bill Frist, Senate majority leader
and a possible Republican presidential candidate in 2008. "Congress has
grappled with this issue for 10 years, and during that time we've watched
this shadowy industry explode," Mr Frist said. "For me, as majority leader,
the bottom line is simple: internet gamble is illegal." While the measures
strengthen the legal armoury against online gambling in the US, it remains
far from clear how they will be enforced. Pragmatists argue that any attempt
to stamp out online gambling is futile, given the difficulty of preventing
individuals placing bets with foreign websites in the privacy of their own
homes. Some credit card companies and banks have lobbied for regulation
rather than prohibition, fearing that the financial services industry could
be held responsible for handling illegal online bets.

The US casino gambling industry, irked at the loss of gambling dollars to
foreign internet companies, also favours regulation, allowing it to compete
in the market legally.

Almost all online bookmakers are based outside the US, many of them in the
UK, where internet betting is legal. In the absence, until recently, of any
serious attempt to enforce laws against the industry, the US has grown into
the world's largest online gambling market.

The most explicit legal threat posed to the industry until Friday was a
patchwork of state laws prohibiting online gambling, such as the one used by
Louisiana to pursue Mr Dicks. But the measures agreed by Congress
significantly increases the legal deterrent against internet betting in the
US by establishing a clear, nationwide law against the practice.

The bill, passed a day before Congress goes into recess for midterm
elections, followed years of pressure for action from Christian conservative
groups and other gambling foes. The new measures were attached to an
unrelated bill aimed at enhancing port security.

A former state representative has been arrested on a felony charge of
operating an illegal gambling house. Sixty-six-year-old Travis Dowd, who
owns the Lucky Penny Arcade, was reportedly out of town when the arcade was
raided Thursday and a warrant issued for his arrest. Dowd turned himself in
Sunday, accompanied by his lawyer. Dowd posted a $20 thousand bond and was
allowed to go. The violation is punishable by up to three years in prison.
Arcades in Arkansas are legal under the law commonly known as the
"Chuck-E-Cheese Law," which allows tokens or coupon pay outs valued at less
than five dollars or less. Pay outs in cash are illegal. In 1993, Dowd was
tried in federal court and convicted of making false statements to a federal
agency. He was sentenced to one-month in jail and five-months house arrest.
Prosecutors said Dowd lied to the Small Business Association when he told
the agency he had an $85 thousand offer for his Ashdown insulation business
after accepting a $103 thousand offer for the same property.

It's an election year and already one of the biggest issues that has many
voters' attention isn't the scandal of Mark Foley and the congressional page
who he instant messaged for a year and a half, but it is a bill in which the
government is prepared to crack down on online gambling. But is this bill
going to stop and industry that has millionaires out of a few but has
continued to send people into bankruptcy faster than some bad real estate
get quick rich schemes the answer to a problem that may not be a problem?
That depends on which side of the fence are you on. When it comes to online
gambling, whether you are talking about online casinos or you are talking
about offshore betting houses for sporting events, what must be addressed by
Congress is why an industry has allowed certain programming to be it's milk
and butter during a weekend. That industry I am talking about is the radio
industry and namely sports talk radio stations. On any given Saturday or
Sunday morning, hundreds of local sports talk radio stations use them to
hock their own shows that are strictly for the gambling public. When you
have local and national programming being influenced by these shows, it will
be hard for the legislature in Washington, D.C. to try to regulate a free
press because that is where you have to start in regulating this industry.
But the legislators are not looking at this avenue because they don't think
that is the problem. America if you want to stop a problem like online
gambling, you have to attack some sources that may not have been on your
target radar. As unpleasant and un-American as it may seem, to tackle
offshore betting, you have to do more than put into words a bill that
regulates your home or business computer; you will have to literally make
such programming like sports betting shows that are seen on television or
heard on radio stations illegal because they fuel an illegal activity.

It can be a very precarious situation during an election year but that is
the avenue the Congress may have to take if they are serious about
eradicating online gambling in this country. But for now, this industry will
continue to thrive and make money for some and bankrupt others. And sadly
that includes probably a few people on Capitol Hill who are frequenters to
these sites as well.

The dice are rolling hot on the tables of what was once a sleepy Portuguese
colony. With millions of mainland Chinese high rollers arriving every year,
developers in Macau are racing to turn the former enclave into Asia's
glittering gambling capital. The stakes are high. At the baccarat table of
one casino, a middle-aged Chinese woman shrugs off the loss of £6,000 on a
single game, tipping her cigarette ash and restacking her chips. She gets
busy again. There is a slight smell of sweat in the air. Macau, the only
place in China where casinos are legal, is poised to overtake the Las Vegas
strip in gambling revenues thanks to a huge influx of cash from the
mainland. "Macau over the next few years is going to develop into something
unique," says Ciaran Carruthers, the senior vice president of Galaxy Resort,
a Hong Kong casino company. He is shouting to be heard over the sound of a
band on the gala opening night of the Grand Waldo Hotel & Casino. The Grand
Waldo is a large casino with 168 tables and 334 slot machines, but it also
has restaurants, shops, a luxury hotel, spa, nightclubs, a fitness centre, a
swimming pool, a children's playground and, inevitably for a casino targeted
at the Chinese, karaoke facilities. There is no question where the punters
come from. The discerning ear can pick out the distinctive dialects of
Fujian, Beijing and Shanghai - this is a playground for mainland Chinese
gamblers. It feels as if a casino is being built on every bit of land in
Macau, making one fear for the elegant ruins of churches built by
16th-century Portuguese missionaries. Where no land is available, it is
taken from the sea. The Grand Waldo is merely the first to open on the Cotai
strip, a £13bn neon avenue of casinos, hotels and shops on 200 acres of
reclaimed land that connects Taipa and Coloane, two small islands off the
southern Chinese peninsula.

Elsewhere on the strip, beneath scores of cranes, armies of hard-hatted
workers are putting the finishing touches on the Venetian Macau, a 39-storey
replica of the Doge's Palace in Venice, with a huge statue of the archangel
Gabriel on top and 3,000 suites inside.

The strip will raise Macau's current tally of 12,000 hotel rooms to 54,000
in 10 years. The backers of the scheme, the single biggest tourist
investment anywhere, are betting it will steal the gaming jackpot from
Vegas.

Macau generated £3bn in casino-gambling revenues, just slightly behind the
Las Vegas strip's turnover of £3.2bn. But where Las Vegas beats Macau
hands-down is on non-gaming income. In Vegas, visitors stay a lot longer,
spend a lot more but gamble a lot less.

Many of the 19 million visitors lured to Macau's balmy precincts are
day-trippers, or gamble their way through their visit, or stay in a massage
parlour. Nearly three quarters of all money spent in Macau goes on gambling,
leaving just £12 per visitor for other activities. In Las Vegas, gaming
makes up just 41 per cent of the spend, with the rest, an average of £128,
going on hotels, food, shopping and entertainment. Cotai's promoters hope
the strip will solve the conundrum of how to make people stay longer. By
injecting Vegas-style glitz, they aim to overcome the reputation for
seediness and gang warfare that Macau has developed.

In recent years, corrupt officials have gambled away billions in the casinos
of Macau, and Beijing is trying to stop this as part of a broader crackdown
on graft. It won't be the first. Chinese authorities have fought a long
battle against the national obsession with gambling. During the Song dynasty
between 960 and 1279, they even cut off gamblers' hands. Yet today, the
Chinese still bet on everything from fighting crickets to the Grand National
at Aintree.

Casinos officially account for 80 per cent of economic activity in Macau,
though the true proportion is probably higher. It became a centre for
gambling during the 442 years that it was run by the Portuguese. Returned to
China in 1999, it is now a special administrative region, under a regime
similar to China's "one country, two systems" policy for Hong Kong. The law
requires, for example, that only people from Macau or those with a special
permit may work in the casinos, a boost to local employment.

The king of gambling in Macau is the octogenarian tycoon Stanley Ho, whose
company, SJM, opened the Casino Lisboa, a 12-storey, circular tower, on 11
June 1970. With it came the 24-hour gaming experience that marked a
revolution in gambling in Asia and earned Mr Ho almost mythical status in
the city.

A good 80 per cent of gambling revenues in Macau flow through locally owned
casinos, most of them run by Mr Ho. The Lisboa is a labyrinthine casino,
still smoky and slightly run-down, and not as full as it used to be, but the
punters are sweating and spending money. The Lisboa flies VIPs to its
high-roller rooms by helicopter, and people can win or lose three or four
million pounds in a day. Legend has it that one punter lost £67m in a single
game of baccarat.

Walking the malls and circling the restaurants of the Lisboa are scores of
legally tolerated prostitutes, many of whom live in the casino's hotel.
Everyone gambles in Macau, even the sex workers. They cast lots to see who
gets to patrol the prime public areas and who has to wait for clients in
their rooms.

Looming over the old Lisboa is the emerging skeleton of the Grand Lisboa, a
44-storey building shaped like a lotus flower, Mr Ho's answer to the foreign
pretenders who have challenged his domination of the market. His monopoly
ended in 2002, when the government began offering concessions to outside
investors.

Two years later, the Sands Macau opened. Its owners claim it is the world's
biggest casino - 740 tables on 230,000 square feet on three floors, with
more than 1,250 slot machines.The scene on the high-roller floor of the
Sands, with 51 rooms for the big spenders, is very different from the
Lisboa. Its main gambling hall is open and spacious, while the Lisboa's
rooms are clearly built for the no-frills, hard-core gambler. It is so
successful that it paid for itself in its first year.

The men who built Las Vegas are looking to Macau to keep the roulette wheels
spinning and the former enclave is turning into a battle ground for two of
the gaming industry's legends - Sheldon Adelson of Las Vegas Sands and
gambling mogul Steve Wynn, both of whom have recently built huge casinos in
Macau and are driving the development of the Cotai strip.

The verbal sparring matches between them are fun. Mr Adelson says Mr Wynn's
new development is a non-event, while Mr Wynn compared the Sands Macau to a
Wal-Mart store, somewhere no high-roller would ever go. Although rivals,
they quietly need each other to do well; if one loses money, so will the
other. This is not poker.

Mr Adelson expects to control 60 per cent of Macau's gaming market by 2010,
and predicts that gaming revenues will rise to £7.5bn a year in the same
period. Revenues from Sands Macau jumped 53 per cent in the second quarter
of this year, accounting for two thirds of the firm's total income.

Jets of fire and water from a large fountain, and a recording of Frank
Sinatra singing "Luck Be A Lady", announced the arrival of the Wynn Macau,
the latest landmark in central Macau when Mr Wynn opened the £640m hotel and
gaming complex earlier this month. It's not just the fireworks that are
flash; An original Renoir sits behind the reception desk and Chanel, Prada,
Christian Dior, Fendi and Louis Vuitton line the shopping arcade of the
24-storey Hotel; statues of camels lope through the swimming pools.

The hotel has 210 gaming tables and 380 slot machines, and a room starts at
£200 a night, rising to £1,450 for a suite. "This place will go profitable
tomorrow, on its first day. It'll take that long," Mr Wynn said at the
launch ceremony, wearing a T-shirt proclaiming: "Knowledge destroys Fear".

Mr Wynn's company has a 50-acre plot on Cotai while Las Vegas Sands Corp is
building a complex and luring several five-star hotel operators, such as
Four Seasons, Hilton, Marriott, Sheraton and Shangri-La. Also under
construction is the City of Dreams, which bills itself as the world's first
underwater casino.

"In Macau, the invitation has been rather one-dimensional - just gambling,"
says Mr Wynn, who, as head of Mirage Resorts, transformed Las Vegas before
selling the company and starting from scratch with Wynn Resorts. "Now the
invitation is being enriched at a pace not seen in any other destination in
the world. The speed of development is dizzying."

Mr Carruthers says that even if the developers succeed in getting people to
stay a bit longer away from the tables, gambling will always be central to
the former colony's appeal.

"The Cotai strip will be uniquely Macau and while retaining its huge allure
as a gaming destination, will become more attractive to people in the region
seeking non-gaming facilities as well," says Mr Carruthers.

"However, I still feel even those that come here for the hotels, fine
dining, retail, conventions etc, will still find the gaming too huge an
attraction to ignore," he says.

China is central to the expansion of Macau and companies such as Galaxy
Resort have their sights firmly set on the mainland Chinese market. "How
Macau changes and develops will be closely linked to the change and
development in China," Mr Carruthers says. "Right now, most of our players
are from the middle and lower classes in China, and it is the middle class
that will drive growth here. This is true for much of the region and as the
middle classes become ever more affluent and have the means to travel, Macau
will be an obvious and convenient choice for many of them."

But gaming and tourism experts say Macau also needs to attract punters from
across Asia, rather than concentrating on the Chinese market. Already there
are signs that Japanese, Koreans, and punters from south-east Asia are
coming to have a flutter.

The first firings in the Israeli online gambling industry have started, as
IM Intermedia dismissed half of its 100 workers yesterday. The firm supplies
services for online marketing and data mining for online gaming companies in
the United States, and its customers include Intercontinental Online. The
company confirmed the report. Yesterday's cutbacks are just the first of
many expected in the industry after the U.S. Senate approved a bill last
week banning the use of credit cards for online gambling. American banks and
credit-card companies will no longer be allowed to pass on funds to Internet
gambling sites. Initial estimates are that the first companies to feel the
pinch will be small- and medium-sized firms that supply services to the
gambling sites. It appears those predictions are coming true. Since the law
was passed, share prices of Internet gaming companies, including a number of
Israeli firms, have plummeted by dozens of percent. Empire Online has lost
25 percent, 888 has dropped 28 percent, PlayTech lost 35 percent, Party
Gaming lost 61 percent, and Sportingbet plummetted 62 percent. Billions of
dollars in value evaporated overnight in the online gaming industry, and
this is just the start as half of the revenues in the $6 billion sector come
from American gamblers.

If the law that is planned to be signed by United States President, George
W. Bush, on Friday is actually signed and enforced, it would be a direct
spitting in the face of the United States to the World Trade Organization.
The WTO claims that the exemptions in the US Internet Gambling Prohibition
Bill for horse racing and state run lotteries discriminates against foreign
internet gambling companies. The case brought to the US by the WTO
representing Antigua and Barbuda mean nothing to the US, however, if the
United Kingdom and/or the European Union get involved the United States
could face some mighty troubles. The EU already expressed interest in the
WTO case claiming that the new US legislation confirms that the US is
breaking WTO laws against protectionism. "To the extent that the legislation
eliminates foreign competition for activities that remain lawful in the
U.S., such as online betting on state-licensed horseracing, or
state-licensed casino gambling that meets federal guidelines, there's no
doubt it raises WTO issues," said Jonathan M. Winer, a Washington attorney.
We will see in the coming weeks how the US really feels about violating WTO
rulings.

A number of gambling industry executives have suggested that they will
exploit exemption clauses contained within the Unlawful Internet Gambling
Enforcement Act of 2006 - keeping open their principal US facing websites,
but retuning them towards skill based games. One has even gone as far as to
suggest that his company will seek to offer online poker within state
boundaries. The Unlawful Internet Gambling Enforcement Act of 2006 makes
unlawful the receipt by a gambling business of proceeds or monies in
connection with unlawful internet gambling. It represents the first piece of
Federal legislation to explicitly deal with online gambling, and it makes
clear the US government's intention to stop the flow of funds from Americans
to online gaming operators through criminal sanction. The Act explicity
states that; "No provision of this subchapter shall be construed as
altering, limiting, or extending any Federal or state law or Tribal-State
compact prohibiting , permitting, or regulating gambling within the United
States." This means that the Department of Justice's position that online
gambling; "contravenes three statutes, the Wire Act, the Travel Act and the
Illegal Gambling Businesses Act" stands. It also means that many gambling
industry executives still have outstanding arrest warrants issued against
them. In its short history the world's largest online poker company
PartyGaming had a number of run ins with the US authorities. These should
have left the executives of the company in no doubt that said authorities
viewed their activities in the US as being unlawful. In April 2004 the
company was informed by Discovery Communications that US marshals had seized
over $2 million of money it had paid Discovery for television advertisements
to promote PartyPoker.com. Court documents at the time revealed that
Discovery had been made aware that by broadcasting such advertisements it
could be party to an illegal activity.

In its IPO Prospectus, PartyGaming stated that it had received an e-mail in
January 2005 purporting to be from the office of the Louisiana
Attorney-General, requesting that the company desist from offering its
services in the US state. The company said that it had "no knowledge of the
legitimacy of the e-mail or its author" and that it would dispute
jurisdiction if a legal challenge were to be launched against it.

Kris Wartelle a spokesperson for the office of Louisiana's Attorney General
recently told the Financial times that it was possible that the email was
indeed legitimate;

"It is possible that our consumer protection division could have sent a
cease and desist letter following a request from the police gaming
enforcement division."

On the 26 June 2005, the Sunday Times reported that the US Justice
Department would consider arresting executives of PartyGaming should they
return to the US; "We could arrest and prosecute these people if they come
back to the country."

The Times of London recently reported that Louisiana had a total of more
than 50 warrants outstanding against executives from internet gambling
companies that have clients who live within the states boundaries;

"It is believed that those targeted by the warrants include other
Sportingbet directors, including Nigel Payne, the chief executive, and board
members of companies including PartyGaming and 888 Holdings."

It is now widely believed that when the Unlawful Internet Gambling
Enforcement Act of 2006 is signed into law, all but the most cavalier of
online operators will stop accepting bets from US citizens.

The notion that a number of the leading companies, may then decide to hang
around in the US, exploiting opt out clauses in the Act, simply beggars
belief.

Until the climate changes, the best advice would be to give the US a wide
bearth once and for all. To do otherwise would be to antagonise the US
authorities, and to further increase the risk of arrest. And that is
something that beleagured ordinary investors can live without.

The 1-800 hotline established to help Ontario's addicted gamblers is being
inundated with thousands of calls from people looking for winning lottery
numbers, prompting the government to rethink the way it advertises the
telephone number. Figures obtained by the Citizen show that the number of
"misdirected" phone calls to Ontario's Problem Gambling Helpline has
skyrocketed since its inception in 1997, going from zero that year to 13,024
(of 17,808 total) last year. "By far, most of those calls are people looking
for winning lottery numbers," said Brad Davey, executive director of
ConnexOntario, the non-profit government agency that runs the helpline. "Or
sometimes it's hours of casinos or things like that. It's usually related to
gambling, but (the callers are) on the 'I'm gambling' side rather than the
'I think I have a problem with gambling.' Those are the misdirected ones."
Mr. Davey defended the high number of errant calls, saying the Ontario
numbers were lower than in other jurisdictions. "It's a common issue with
problem gambling helplines," he said, adding he views the misdirected calls
as a "marketing opportunity."
"Many times when the person has called in looking for the winning numbers
and our operators explain what it is we do, the person then says, 'Well, I
am concerned with the number of tickets I'm buying every week,' " he said.
Mr. Davey could not say how much it costs to field misdirected calls. The
London-based call centre is staffed by the equivalent of eight full-time
operators and has an annual budget of $826,200. The unusually high numbers
have prompted government officials to reconsider their marketing strategy,
acknowledging that the 1-800 number might either be overexposed or
underexplained. The number is currently posted on every one of the
province's 13,069 slot machines, as well as many lottery tickets, and is
listed either on the home screen or the withdrawal receipt of most ATM
machines in provincial casino and slot facilities. The provincial government
has also launched a series of television, radio and newspaper advertisements
publicizing the number.

While the total number of calls to the helpline has fluctuated between about
12,500 and 18,000 over the past five years, the number of callers seeking
help has remained constant at about 5,000. Officials say the number of
gambling addicts in the province has stabilized over the same period.

University of Lethbridge professor Robert Williams, one of the country's
leading authorities on problem gambling, says the high number of errant
phone numbers is "a waste of time and resources," but says the program is
otherwise effective.

Mr. Williams estimates that between three and five per cent of adults in
Ontario have a moderate to severe gambling problem, but they contribute 35
per cent of the province's $6.2 billion gambling revenues.

The world's largest computer facilities for online gaming are located in
Canada and are nicknamed MIT. This doesn't stand for the Massachusetts
Institute of Technology: It stands for the Mohawk Institute of Technology.
That is because this gigantic "server park" -- which drives many of the
online gambling sites -- is inside the Mohawk First Nations Reserve, also
known as Akwesasne, which straddles the borders of Ontario, Quebec and the
United States. "It operates just like the server parks in Costa Rica or
Belize," said William Rutsey, president of the Canadian Gaming Association,
which represents those gambling enterprises in Canada that are legally
licensed. The Americans are cracking down on Internet gambling, but nothing
is being done in Canada. This is because gambling is a provincial matter and
most governments and their gaming partners may not be aware of the huge
growth of the business. Their inaction is combined with governmental fear of
enforcing laws on any First Nations Reserve. So the beat goes on at MIT and
elsewhere, with many Canadian players involved. Meanwhile, the United States
has launched a crackdown and prohibition against online gambling. Stocks of
Internet gambling companies around the world tumbled after Congress passed a
law banning U.S. banks from financing online bets.

Two British CEOs of Internet gambling sites (both publicly listed) were
temporarily arrested when changing planes on U.S. soil. Online gaming is not
illegal in Britain and two of the biggest publicly listed gambling companies
are on the London Stock Exchange.

Another weapon U.S. prosecutors have used is to attack the media for
carrying online gambling ads.

This year, the Sporting News paid US$7.2-million to settle a case by the
U.S. feds that claimed the publication promoted illegal gambling by
accepting ads. The magazine did not admit or deny liability.

The worldwide online gambling market is estimated at more than US$11-billion
annually and is projected to reach US$25-billion by 2010. More than half
comes from U.S. gamblers.

In Canada, the online gamblers are breaking the law but no one is getting
pursued and, alternatively, there is no move to make it legal.

"Canadian laws are different. Under the Criminal Code of Canada, only
provincial governments, or their agents, can conduct or manage gaming.
Gambling is owned by governments here, then contracted out to managements,"
Mr. Rutsey said in a recent interview.

"Our position is that the law should be enforced which is on the books or
else governments should look at creating an environment where online gaming
can be regulated and taxed."

Right now, slots, race tracks and casinos are allowed by provinces in
Canada.

"The Canadian model is for government to regulate, own and outsource gaming
operations to the private sector. Gross revenues are $14-billion a year and
50% of this goes to governments, charities or not-for-profits, or
$7-billion," he said.

Provincial failure to crack down, or license, Internet gambling operations
exposes the public to needless risk.

Nova Scotia is taking on a leadership role that may help stop problem
gambling before it starts. The province has helped develop software that
prevents children from surfing their way on to gaming websites. As many as
500 families across Nova Scotia will be able to try out the product for
free. "It's Internet-blocking software that's specially designed to help
parents keep kids off gambling websites," Margaret McGee, director of
prevention programming for the Nova Scotia Gaming Corp., said Friday. "It's
the first of its kind in the world." Ms. McGee said the corporation
developed the program, BetStopper, with the help of a U.S. software company.
"The idea came from the fact that there are a lot of Net Nanny softwares out
there, but they're not very effective when it comes to gambling because most
of them are designed for pornography and chat rooms and that sort of thing,"
she said. "And with the rising popularity of online gambling, particularly
among the youth age group, we wanted to do something that was a
demonstrable, tangible thing that showed that our commitment to doing our
part to prevent problem gambling is real." In a news release issued Friday,
the gaming corporation said BetStopper is considered 94 to 99 per cent
effective in blocking both legal and illegal online gambling sites and
blocks more than 2,300 casino-style websites from around the world. Similar
programs are only 56 to 79 per cent effective.

The new software uses artificial intelligence, a "blacklist" of blocked
websites and manual updates to help parents protect children under 19 from
online gambling, lottery and sports betting sites, the release said.

The pilot test of BetStopper begins today, the release said. Each family
participating in the project will fill out three surveys over six months but
will have a full year to try out the software.

"Research is going to look at things such as usability, effectiveness at
keeping kids off gambling websites, effectiveness at raising awareness of
the issue and motivating parents to talk to their kids about the issue and
the risks of gambling," Ms. McGee said.

John Dunsworth, a Halifax actor and self-confessed VLT addict, agreed
wholeheartedly that it's important to limit under-aged Internet users from
accessing addictive websites.

But he also said it's ironic that the government releasing new software to
do that is the same government making a profit from gamblers across Nova
Scotia.

"I just think it is wrong for the same people who are benefiting from
gambling . . . to be in charge of limiting their own revenue. It's a
conflict of interest - they just can't do it effectively," he said Friday
after hearing about the new software.

"The casino takes an awful lot of money out of this province. Why don't they
limit that?"

Mr. Dunsworth said it bothers him that the province continues to make
"profit from people's misery" and that it's the government's responsibility
"to protect the weak in so-ciety."

He emphasized that "any limiting of gambling among people who are immature
or incapacitated or inveterate or addicted is a good thing. . . . I think
it's
a real shame that so many kids have addictions to Internet gambling."

But Mr. Dunsworth said he would rather see a full ban on Internet gaming
sites in Canada.

"I think anything that will curb that hideous use of the high-tech Internet
would be a good idea."

Ms. McGee conceded the government does make money from gambling but said
that's why the province has a responsibility "to spend some of that money
doing our part to prevent youth gambling."

This November in Ohio, voters will be asked whether or not to legalize
casino gambling and use percentages of the tax revenue from "games of
chance" to assist students with college tuition. If approved, the plan would
legalize casino gambling at 7 racetracks across Ohio as well as 2 casinos in
Cleveland. Very similar to the legislation voted on and passed in Broward
County, Florida back in 2004. The gambling revenues earned by legalizing and
taxing casino gambling would be divided into several categories. The first
30% of the money made from slots would fund college scholarships for
top-notch students from low-income households. The next 15% would go to
local economic development, additional racing purses and gambling addiction
programs. Plans for the other 55% have not been announced. According to
proponents of the new law, the projected $800 million per year in annual
scholarship funds would be kept in private personal accounts for each
student by the state of Ohio. "The additional scholarships will allow
thousands of students each year attend college who would otherwise be
flipping burgers or doing manual labor", said Ed Nelson, a Cleveland native
and long-time proponent of the new slots proposal. On the flip-side, those
opposed to the new bill cite legalized casino gambling as a dangerous way to
generate tax revenues for education. They believe the legalization of
gambling would create more problems than additional scholarships could
resolve. Definitely an interesting issue to watch this year as the November
elections are quickly approaching.

With the initial panic over last weekend's rushed US Congress action against
online gambling dying down, operational companies are starting to look more
objectively at the practical implications of this essentially financial
restrictive US proposal. The Unlawful Internet Gambling Prohibition Act
contains no provisions that would make it illegal for a person located in
the U.S. to place a bet with an online gambling company. All provisions are
directed at trying to stop the flow of US money to offshore gambling
companies. Jackpot Factory group started the positive ball rolling when it
announced earlier in the week that whilst it was monitoring the situation it
would be business as usual when it came to US players (see previous
Online-Casinos.com/InfoPowa reports) Several other major online casino and
poker room groups have now followed suit, and as we went to press the
respected Cardplayer.com site had published an excellent and practical
review of the entire situation which will go some way to calming the
business hysteria that has been so prevalent this week. The Leisure and
Gaming group, which includes many top online gambling companies,
acknowledged the introduction of the Unlawful Internet Gambling Enforcement
Bill, is monitoring the situation closely and is continuing to take legal
advice on any impact this may have on its business. In the meantime the
group continues to operate its business in the usual course. The important
Mansion group said that the full effect of the legislation at this time
remains unclear. Mansion continues to closely monitor developments of the
proposed amendments to U.S. legislation, and the online gambling group is
actively seeking the best legal advice to remain fully informed. "We are
committed to ensuring our members are well informed, should any of the
proposed regulations have an impact on the conduct of our business and the
availability of our products and services," says the announcement, adding
that: "We wish to reassure our members that at this time, Mansion continues
to trade normally and we remain committed to delivering the quality and
standard of service that they have come to expect from us."

The Roxy Palace and Vegas Splendido online casinos told webmasters that the
company will be conducting business as usual and will still accept US
players at both casinos.

The Board of International All Sports Limited ("IAS") issued a statement
saying that the company "....is disappointed that the USA Government is
passing laws to circumvent its commitment under the General Agreement of
Trade and Services to the World Trade Organisation to allow free
international trade in an effort to protect USA gaming companies that
operate in the USA."

The Board noted that US horse racing has been exempted from the legislation
and as such this aspect would not affect the business of IASbet.com. Turning
to subsidiary Canbet, the international brand of IAS that operates out of
the United Kingdom the statement said the US proposal is not expected to
have any financial effect on the operating profit of the group.

The rate of problem gambling in Surrey and Langley rose in 2005 after the
arrival of casino gaming here. That's among the first-year findings of a
multi-year study conducted for the provincial government into the
socio-economic impacts of casinos in the Lower Mainland. It's tracing the
effects on residents of the spring 2005 opening of Langley Cascades casino
and slot machines at Fraser Downs racetrack in Surrey, plus two facilities
in Vancouver. Researchers surveyed residents at random as well as casino
patrons. They determined the percentage of problem gamblers in Langley
climbed from 2.5 per cent in 2004 to 4.9 last year. The rate climbed from
5.6 to six per cent in Surrey, but fell in Langley Township from four per
cent to 2.6 in 2005. The firm behind the study, Blue Thorn Research and
Analysis Group, concluded the change is not statistically significant. "The
venues appear to have produced new gamblers," the report found. "Some people
are now gambling at the venues that previously did not gamble. It is
possible that some of these new gamblers may develop problems." Researchers
interviewed nine counsellors who work with problem gamblers. Obvious impacts
were limited because the facilities are new, the counsellors said, adding
their clients "were in trouble well before these facilities opened." The
report said the counsellors believe the casino in Langley may have led to an
increase in the number of mental health clients there, because of the
casino's
proximity to low-income housing and residents there without ready
transportation. The counsellors suggested the addition of gambling sites
creates "enormous temptations" for problem gamblers, and convenience and
visibility increases the risk of relapse.

Overall, the report concludes that based on the first year's findings the
casinos have had a relatively small impact on gambling behaviour.

In 2004, about 76 per cent of Langley City residents surveyed said they
never played slot machines. That fell to 60 per cent in 2005 after the
casino opened (versus 64 per cent for Langley township.)

About 40 per cent of Langley City residents surveyed said they gambled at
the casino, versus 30 per cent of Langley Township residents.

In contrast, 74 per cent of Surrey residents surveyed said they didn't play
slot machines in 2005 - up slightly from 73.7 per cent in 2004 prior to the
installation of Fraser Downs slots.

Surrey residents who do gamble at slot machines don't automatically go to
Fraser Downs. It was fourth on the list of where they play slots, behind Las
Vegas/Reno, River Rock in Richmond and Cascades in Langley.

A total of 11 per cent of those surveyed in Surrey said they did gamble at
Fraser Downs in 2005 and spent on average $54 per visit.

Langley City residents spent an average $36 per visit, but more - nearly six
per cent - said they go every day.

Of combined Vancouver-Surrey-Langley residents surveyed, 20 per cent said
they don't gamble.

Sixty-five per cent are rated as non-problem gamblers - classifications
based on survey responses - while 10.5 per cent are "low risk", 3.7 per cent
are "moderate problem gamblers" and 0.7 per cent are "severe problem
gamblers."

The report found there was "no discernible impact" on crime or traffic near
the casinos.

Pub owners will be able to raise the pay-out limit on fruit machines,
following a concession from the Government. The Department for Culture,
Media and Sport (DCMS) has given the go-ahead to increase pay-out limits on
fruit machines from £25 to £35, ahead of the Gambling Act next September.
DCMS announced the measure in response to lobbying from the main trade
bodies in the sector, including Business in Sport and Leisure (BISL) and the
British Beer & Pub Association (BBPA). Brigid Simmonds, chief executive of
BISL, said: "Working with the major trade associations who have an interest
in this area, we convinced ministers of the hardship the industry was
experiencing at this low-stake, low-price end of the market." "As a result
they have bought forward the changes to stakes and increased the prize for
the 'pub' machine to £35," she said. A spokesman for the BBPA welcomed "the
modest" change as a step in the right direction. It should help soften the
blow of next year's smoking ban in England and Wales for pub operators,
which fear fruit machine revenues will be hit hard as smokers go elsewhere.
High-street operator JD Wetherspoon, which has pubs in Scotland and sites
that have been smoke-free in England and Wales for almost a year, recently
reported a fall in gambling revenues at its no-smoking pubs. However,
because the changes put fruit machines into a higher tax bracket, operators
are unlikely to see benefits from the agreement until they are reclassified
in next year's budget and the rate of tax is lowered.

WPT Enterprises, Inc. the company that helped launch the current global
poker boom, issued a statement today encouraging the U.S. poker community to
focus on the bright future ahead in the wake of Congressional passage of the
"Unlawful Internet Gambling Enforcement Act of 2006." "The Justice
Department has been very clear that it believes online gaming to be illegal
in the United States and our policies have been always been tailored
accordingly," said Adam Pliska, General Counsel of WPTE. "This law clarifies
the rules and makes it possible for everyone to move forward on an even
footing." It is estimated that over 50 million Americans play poker on a
regular basis, with more than 100 million players world-wide. Whereas
casinos were closing their poker rooms in 2001 prior to the launch of the
World Poker Tour, today casinos across the country are expanding their rooms
or opening new showcase poker rooms like the 111 table room at Foxwoods
Resort and Casino in Connecticut and the 85 table room at the Borgata in
Atlantic City. "It was a wide-spread love of this game and the reinvention
of poker as a televised sport that ignited the poker phenomenon," said Steve
Lipscomb, CEO and founder of WPTE. "And, that is what will continue to drive
the future of the sport. WPTE remains committed to growing the domestic
poker market through traditional franchise opportunities like consumer
products, sponsorship and events."

WPTE is the producer of the WORLD POKER TOUR® (WPT) TV television series,
which airs in the U.S. on the Travel Channel, as well as 150 countries and
territories. WPTE also maintains an online gaming site that explicitly
excludes U.S. customers from wagering online.

The WORLD POKER TOUR launched the poker phenomenon when it first aired on
the Travel Channel on March 30, 2003, and it continues to lead the way in
developing poker as a major international sport. WPT schedules, information
and merchandise. The highest rated show ever on The Travel Channel, the WPT
is now seen in more than 150 countries and territories worldwide. Premiere
shows of the WPT air on the Travel Channel March to June and WPTE's newest
series, the PROFESSIONAL POKER TOUR airs from July to December every
Wednesday, 9 p.m. ET/PT.

About WPTE

WPT Enterprises, Inc. is a company engaged in the creation of
internationally branded entertainment and consumer products driven by the
development, production, and marketing of televised programming based on
gaming themes. WPTE is the creator of the World Poker Tour®, a television
show based on a series of high-stakes poker tournaments that airs on the
Travel Channel in the United States and more than 150 markets globally. With
the WPT in its fifth season, WPTE has launched a second series on the Travel
Channel, the Professional Poker Tour(TM), which focuses on the play of
poker's leading stars. WPT Enterprises currently licenses its brand to
companies in the business of poker equipment and instruction, apparel,
publishing, electronic and wireless entertainment, DVD/home entertainment,
casino games, and giftware. The company is also engaged in the sale of
corporate sponsorships. For show information, tools for improving poker
play, and other WPT news.

Recently, the Governor of the Hardap Region was quoted in the media as
reading the Riot Act to local and regional authorities in her region. Should
one join her or not in her crusade at this juncture? I am not quite sure.
Hold on, don't jump to conclusions! Lest you misunderstand me I am not
saying our local and regional governance structures somehow and at some
point do not need ironing out. Examples of a system gone wayward abound. One
need not look further than to the concerns often expressed by the principal
officers of the Ministry of Regional and Local Government, Housing and Rural
Development at various occasions over governance - rather mis-governance -
at these levels. I am just unsure whether reading the Riot Act to them is
the remedy or cure that they may need. In fact, how has the Honourable
Governor decided that what their malady (ies) is/are that need the remedy of
a Riot Act? I am inclined to think that it is easy reading the Riot Act to
the converted. Are these officials converted? If there are any converts
among them they may only be a handful. And by converts in this context I
mean those having had a basic introduction and induction to their working
environment for a start, and disciplined in one or the other aspect of their
work before being thrown in at the deeper end. In a nutshell, are these
officials, both elected and appointed, equipped before being entrusted with
the duties they are assigned, some of which are fiduciary in nature. I
wouldn't think this is the case all the time and for most of them. In that
sense, what these officials need is more than a mere Riot Act. How can they
make sense of this Riot Act if in the first place they are not qualified,
however rudimentary and broadly defined this qualification may be.

Yes, I am sure our principals would be quick to point out to the formal
preliminaries often undertaken to prepare these officials, among them
workshops and what-have-you. Obviously one cannot discard them but one
doubts their comprehensiveness, especially in view of the fact that most of
our officials may be coming from a zero knowledge background at worst. I
would argue that such preparations should be thorough if they are to be
meaningful in supplanting the scant qualities these officials already
possess if they do at all. I think this is the crux of the matter and not so
much whether a Riot Act exists and how often and loud it should be trumpeted
or not. Have we been choosing the best on offer in any locality or region?

The best in this regard does not only mean scholarly qualifications or
truthfulness to whatever political ideals. In fact, in the eyes of most
politicians or political parties, party loyalty, a euphemism for cliques,
has often been the number one qualification criteria. The interest of the
local community has in most cases been subjected to the presumed greater
interest of the party and its big shots at head office, remote-manoeuvring
the situation through local agents who are at the end of the process are
rewarded with positions, as undeserving of these positions some of them may
be. This has been the context in which the rolling out of governance to the
local and regional levels has been taking place, a fact that political
parties would not readily admit to. This is also the environment in which
the Riot Act is read and applied.

Out there in our localities and regions, we have people with integrity to
occupy these offices and bring to these public offices and our people there
the dignity, diligence, dedication, commitment and a sense of duty needed in
uplifting these communities. Yet, such people are most of the time bypassed
for political yes-men/women with little track records, be it in terms of
serving these communities in one aspect or another, or in terms of having
instilled the public with the requisite confidence that they can in reverse
deposit their trust in them. This is not to ignore well-meaning officials in
our local authorities and regions, but they are few and far in between. It
seems meritocracy, however you may define it, whether it is in terms of
academic qualifications, good standing and service, to mention but a few,
hardly applies when it comes to electing and appointing officials at the
local and regional levels.

Certainly, elected bodies at these levels must reflect the diverse make-up
of their constituent communities if they are to champion and carry these
diverse interests. A healthy balance must be struck between elected
officials dedicated to service for their communities, politically conscious,
not with regard to party politics but local interests and commitment to
service to these communities at the one end of the continuum, and good
standing, which includes financial stability, at the other end. There is no
denying that some of the woes at these levels of governance, particularly as
they relate to the misappropriation of public funds by our officials, are
induced by financial instability among some of our officials. We are living
at the end of a double-edged sword in the sense that between the two strands
of those entrusted with public affairs, the appointed and elected officials,
none seems to be prepared well for the task and duties at hand due to
historical legacy. It is a case of the blind leading the blind. One obvious
disqualification for those wishing to assume office, elected or appointed,
is failure to pay for services.

If anything, this is an indication of financial instability, and electing or
appointing someone like that to public office is not only gambling with
public trust but also risking public funds. The temptation is great of
him/her helping himself/herself to pubic funds to lessen his/her financial
burden or either somehow cooking something up to write off his/her debt. The
probability of one or the other misdemeanour is high.

Yes, I agree that Rome was not built in a day but I do not think sporadic
piece-meal administration of remedial doses is the answer. With hindsight
one would tend to think that the seemingly slow pace at which the rolling
out of governance to the localities and regions has been taking place is a
blessing in disguise. What use is it to roll out mismanagement? Certainly I
do not subscribe to the pre-Apartheid notion when we submitted in the face
of Apartheid apologists that we had the right to rule and misrule ourselves.

Let's work at our own pace and according to our own agenda to roll out real
democracy and not mismanagement to the regions and local authorities. If the
time has not arrived for us to devolve functions to these levels of
governance, it has simply not. However, the first thing must come first.
This first is to ensure that those to whom these functions are to be
entrusted are in a position to carry them out with the minimum hitches,
inhibitions, and not tempted by material cravings to help themselves to
public resources. In that event the Riot Act would barely be necessary.
Ineffectiveness, corruption and lack of skills amongst council officials
contributed to the mismanagement of public funds, which resulted in the
non-improvement of service delivery, the Minister of Regional, Local
Government and Housing then, Joël Kaapanda, stressed in 2003. He did not end
there but added: The problems being faced by you are quite complex and will
require systematic long-term support. Need I say more? There are simply no
quick fixes. Neither is the Riot Act the answer. Merit is the guide. Service
is the goal. Upliftment is the mission. Humbleness is a virtue. Craving is a
vice.

You are no doubt aware of the recent passing of the Federal Unlawful
Gambling Enforcement Act in the US. As a result of this act, Casino Blasters
is in the process of consulting legal counsel, but until further notice it
is business as usual. All affiliates will receive payment for traffic. For
more information, please feel free to contact us at Info@CasinoBlasters.com
or call us toll-free at 1-866-225-6909. If anything shall change we will
notify you.

Illinois Church Action on Alcohol and Addiction Problems calls upon Rod
Blagojevich and Judy Baar Topinka to come up with a better plan to fund
education that does not rely on people gambling away their money to fund
state programs. Green Party candidate Rich Whitney is the only gubernatorial
candidate to propose a plan that does not include gambling. The public knows
that gambling does not solve the problem of school funding. According to a
Copley News statewide poll, 49 percent oppose Gov. Blagojevich's plan of
selling or leasing the state lottery to increase funding for schools, and 40
percent oppose state Treasurer Topinka's plan to allow casino gambling in
Chicago and more than doubling the number of gambling positions at the nine
casinos. Blagojevich opposed the expansion of gambling when he ran for
office in 2002 and stopped many gambling expansion proposals in the
Legislature during his first term. We call upon him to reject the sale or
leasing of the lottery, which will lead to a massive expansion of gambling .
As a state representative, Topinka voted against legislation that created
casino gambling in Illinois and opposed keno, tribal casinos and other
expanded forms of gambling during this campaign for governor. We ask her to
reject a massive land-based casino in Chicago and expansion of gambling
positions at existing casinos, which will rival the casinos in Las Vegas.

Gambling is an unstable source of revenue. The children and citizens of
Illinois deserve a well-thought-out plan in place of a "quick fix" gambling
proposal that will result in long-term devastation to individuals and
families.

It's time to come up with a better plan that does not include gambling.

Internet casinos were fighting for survival today after they were left
stunned by law makers in the United States who called 'no more bets' and
sent shares crashing this week. Billions of pounds were lost when Congress
effectively shut down online gambling operations in the US and deprived
casinos such as Party Poker firm PartyGaming and 888 Holdings of their main
source of revenue. It also left investors in a state of panic as the
subsequent fall in share prices revived memories of the dotcom crash. More
than £4bn was wiped off the value of the online gaming sector in one day -
more than halving its value - with shares in PartyGaming down by as much as
65%, 888 off 28%, Sportingbet 67% lower and World Gaming losing an
astonishing 92%. The sector is now looking for ways to rebuild its
reputation and cashflow with investors more nervous than ever on taking a
punt on internet casinos. Richard Hunter, of Hargreaves Lansdown
stockbrokers, said: 'These companies represent high risk investments and as
such will tend to be suitable only for the most hardened of investors - or
gamblers perhaps.' For a long time online casinos generated enough cash not
to need large bank loans but analysts now fear firms could be forced to look
for credit to make up for lost revenues and falling profits. Reports have
suggested that PartyGaming will have to negotiate a new loan facility with
its banks within 30 days of anti-gaming legislation being approved.
And smaller player World Gaming - which generates more than 95% of its
revenues from the US - has already entered talks with creditors as it
struggles to deal with its debts. A wave of consolidation is now expected in
the sector as online casinos look for new gamblers outside the US to revive
their fortunes.

Ukbetting became the first to reveal it had received an approach as it
admitted that its decision not to operate in the US made it a valuable
takeover target. Most of ukbetting's gambling customers are British and it
also owns sports news websites such as teamtalk.com and football365.com.

City analysts said 888 was behind the preliminary approach but added that
its approach was made before the change in legislation in the US.

888 went on to say that it was not 'currently' in discussions with ukbetting
although the company is widely thought to be on the acquisition trail. 'The
talks apparently started prior to the change in US regulation,' said Panmure
Gordon analyst Charles Hall.

'As far as 888 is concerned the deal makes good strategic sense, given that
it would further strengthen the company's UK position.'

But he added: 'This may well have made sense last week but in the new
environment the company may feel it has more pressing issues to deal with as
well as not wanting to tie up all of its cash resources.'

Both PartyGaming and 888 still generate a lot of cash without their American
punters, and PartyGaming has also suggested it is on the look out for
acquisitions.

Its share price was given a welcome boost by talk that it is in renewed
discussions over a bid for smaller rival Gamesys.

A marketing push away from the US is also expected in the coming months to
attract new players to its websites. Both PartyGaming and 888 have courted
customers around the world as the threat of anti-gaming legislation in the
US loomed.

In the first six months of the year, 888 attracted 370,000 new members to
its casino and 380,000 to its poker tables - two-thirds coming from outside
the US, which now accounts for just over half its revenues.

PartyGaming has managed to reduce its reliance on the US from 90% to around
75% in the last year. Mr Hunter said: "The obvious next strategic move for
these companies would be the traditionally rich gambling mentality in Asia
and also the largely untapped European market.

'Even in these localities, depending on the country, there are some
difficult legal hoops to get through before the likes of PartyGaming and 888
can begin to replicate some of the revenues they have lost.

'There is also, now more than ever, the likelihood of consolidation within
the sector, particularly as many of the smaller companies will find it
increasingly difficult to survive.'

Investments in online gaming stocks have been something of a gamble since
the sector took off around 18 months ago.

Share prices have lurched violently up and down on a daily basis with the
enormous popularity of games such as online poker offset by ongoing concerns
over the legality of internet betting in the US.

PartyGaming warned of the threat of changes in regulation in the US when it
listed on the stock market in London in June last year. But investors threw
their chips onto the table and sent its value soaring to £7bn - more than
four times its current value of £1.6bn.

The US authorities raised the stakes over the summer when they arrested two
British executives - BetonSports chief executive David Carruthers and
Sportingbet chairman Peter Dicks - on American soil.

Despite the warnings, few in the City expected the controversial Unlawful
Internet Gambling Enforcement Act to be passed by Congress. However, it was
approved after Senate majority leader and 2008 presidential hopeful Bill
Frist attached it to the back of a totally unrelated Bill on security at US
ports at the last minute.

The successful ambush gave American conservatives and the religious right -
who have compared the evils of gambling to those of crack cocaine - an
extraordinary coup.

President Vladimir Putin introduced in the parliament Friday a draft law
proposing a new set of regulations for the gaming industry. The president
proposed the new law after the Interior Ministry launched an apparent sting
operation to check the financial, tax and sanitary-epidemiological documents
of a variety of gambling establishments in the capital allegedly linked to
the Georgian mafia. The wave of closures of Georgian-owned casinos and
restaurants in Moscow follows on the heels of a recent spying scandal
between Russia and Georgia that saw the arrest of several Russian officers
on espionage charges. If the parliament passes the law, which envisions the
establishment of two types of gambling zones where gambling will be allowed,
the new rules will come into effect January 1, 2009. The first type
comprises gambling zones in residential areas. These can be established on
territory allocated for urban and rural development. The federal government
will issue permits to gambling establishments in these areas in coordination
with local authorities. Permits will be issued for five years and will allow
each organizer to set up one gambling facility per permit. The second type
comprises gambling zones established on parcels of land belonging to federal
or municipal authorities not allocated for urban or rural development. These
parcels will be leased to the owners of gambling business by the Russian
government.

The draft document also outlines the requirements for owners of gambling
establishments. The owners must be Russian legal entities that have not been
created by the Russian government or local authorities, and whose net assets
are not less than 600 million rubles (about $22.4 million).

All gambling businesses that do not meet the requirements proposed in the
draft will be shut down after July 1, 2007. Those gambling establishments
that meet the requirements will be allowed to operate without special
permits until January 1, 2009, when the new law comes into effect.

Last Saturday the United States Congress passed a port security bill that
carried an amendment banning Internet gambling. This was a huge mistake, not
because Internet gambling is a good thing (it was already illegal, in fact),
but because the new law is either unenforceable or -- if it can be
enforced -- will tear away the last shreds of financial privacy enjoyed by
U.S. citizens. The stocks of Internet gambling companies, primarily traded
in the UK, went into free-fall as their largest market was effectively taken
away. I don't own any of those shares, but I guarantee you they will fully
recover, which is part of what makes this situation so pathetically stupid.
Ironically, many of the senators who voted for this legislation may not have
even known the gambling bill was attached, since it didn't appear in the
officially published version of the port bill. But such ignorance is common
in Congress, along with a smug confidence that people and institutions can
be compelled to comply with laws, no matter how complex and arcane. The
amendment was a surprise late addition, pushed by Senate Majority Leader
Bill Frist, who has presidential ambitions and reportedly sees this battle
against Internet gambling as part of his eventual campaign platform.Only the
new law isn't really against Internet gambling at all, since it specifically
authorizes intrastate Internet gambling, imposing on the net the artificial
constraint of state boundaries. So the law that is supposed to end Internet
gambling for good will actually make the practice more common, though
evidently out of the hands of foreigners, which in this case includes not
just operators from the UK but, if you live in South Carolina as I do, it
also includes people from Florida and New York. Let a million local poker
hands be dealt. What the new law actually tries to control is the payment of
gambling debts through the U.S. banking system, making such practices
illegal (except, of course, for intrastate gambling, which probably means
your state lottery). Once President Bush signs the bill, your bank and
credit card companies will have 270 days to come up with a way to prohibit
you from using your own money to pay for gambling debts or -- though far
less likely-- to keep you from receiving your gambling profits. The law
covers not just credit card payments but also checks and electronic funds
transfers.

The most optimistic view of this law from the U.S. banking industry says
that controlling payment by checks and electronic transfers is simply
impossible and won't be enforced. Only credit card payments are seen by the
banks as being practical to limit. But what if Congress doesn't want to take
"no" for an answer? What if they are serious? Then the banks will have to
put systems in place to examine every payment transaction, no matter how
small, and determine if it is gambling related. And because there will
inevitably be attempts to get around the law, such examination would go
beyond simply identifying the payee to following the money further upstream
and downstream and examining it in the total context of your financial
activity: Is there a suspicious trend in these payments, which appear to
follow every NFL football game, for example?

If you bother to read U.S. currency, the notes say they are good for paying
"all debts, public and private," which is why Tony Soprano and the Cali
cocaine cartel liked $100 bills so much. Ironically, if the banks are
effective in controlling other gambling payment schemes, it may all come
back to paper money, which is almost impossible to trace.

Is the end here really worth the effort? The United States already has
strict, even draconian, controls over fund transfers that might potentially
be used to pay for terrorist activity. Buy a house or open a brokerage
account and see how deep an interest the bank takes in where the heck your
money is coming from. Now it is proposed that they apply the same diligence
to transactions as small as one dollar.

This is ridiculous, not just because it is an unwarranted invasion of
privacy, not just because we as consumers will ultimately have to pay for
the cost of snitching on ourselves, but because the system of regulation
ultimately won't work. With an Internet gambling market approaching $20
billion per year, there is a huge incentive for new enterprises to spring
into being specifically to get around this law. Frankly, it ought to be
easy.

Just off the top of my head I can think of several possible approaches to
subverting this new law. Working within the banking system it might be
possible to aggregate payments to make their individual origins less
obvious, especially if the aggregation involves some non-gambling money.
Remember, these restrictions are being placed on the U.S. banks, not their
foreign counterparts, so any bank in the Caymans or on the Isle of Man ought
to be able to chug through such aggregated payments without violating any
local laws. Another option, since intrastate gambling is authorized, is to
make interstate and international gambling debts effectively local by
creating thousands of local virtual bookies. All of these are old school
ideas that don't even need technology to implement. What if we bring to bear
the capabilities of Web 2.0 and create payment mashups by the dozen Ð little
PayPals that rise and set like the Sun?

Any random group of 535 nerds is smarter than the 535 members of the U.S.
Congress and able to circumvent ANY regulation if there is enough profit
incentive to do so. Well the U.S. Congress has just created such an
incentive where there was none before. And once these various payment
schemes start appearing, what's to say some of them can't be equally used to
finance terrorism? Of course they can be used for that purpose. Thanks a lot
Senator Frist.

Here's a law that purports to end Internet gambling but will instead enable
it, a law that is intended to make certain types of financial transactions
harder to do but will ultimately make them easier, a law that says nothing
about terrorism but will ultimately abet it, making us all less secure in
the process.

There is, to my knowledge, no center for Al-Qaida hacking, nor is terrorism
as an industry big enough to attract much third-party software development.
But ally the interests of terrorists and Internet gamblers who all want to
be paid, that's a $20 billion incentive to corrupt the world financial
system -- an incentive that didn't exist before last week.

And what will be our institutional response to these obvious flaws when they
come to light? More regulation of course! More scrutiny of financial
transactions, not less. But as we've seen in recent years, this greater
scrutiny often comes with lax or unequal enforcement, depending on your
campaign contributions.

Once again, Congress is proposing to regulate something it ought not to --
something that in any practical sense is probably beyond its power. And the
result will be only bad, not good. And Congress's response will probably be
even more regulation, not less. And all this to push one man's presidential
ambitions?

The Nova Scotia Gaming Corporation is looking for families to test a new
computer program for blocking online gambling sites. The corporation said
the new software program, called Betstopper, is supposed to block more than
94 per cent of online gambling sites. The province wants 500 families to
test the product in their homes. As many as six per cent of Nova Scotia
teens between the ages of 15 and 17 admit to gambling online, the
corporation said. Marie Mullally, the gaming corporation's chief executive,
said it's not hard for kids to access internet betting sites. "Many of them
are unregulated, with no controls, no supervision, no age restriction, no
security checks. So, in fact, it's quite easy for kids to get on-line and to
gamble, and they have thousands of sites from which they can choose," she
said. The gaming corporation said if families involved in the test like the
program, it will make the product widely available. The provincial
government agency said there are estimated to be more than 2,300
casino-style internet gambling sites in the world. Donna Gallant, an
Antigonish mother of three children under the age of 10, got one of the
first copies of Betstopper. Gallant said she doesn't want her kids trying
on-line gaming when she's not watching. Since she installed the softwear a
couple of days ago, it has already blocked several gambling websites.

"The new law passed because members of the pro-family movement -- including
a great many Southern Baptists -- brought the issue to the attention of both
Democrats and Republicans," Bill Frist says in a letter to the Southern
Baptists, a minority group not representative of all, or even a majority, of
citizens of the United States of America. In an attempt to explain his way
out of attaching a ridiculous law that prohibits the rights and freedoms of
American citizens, in the midnite hours of the last day of Congress
sessions, Frist explains that "...rigorous state enforcement means that
brick and mortar casinos make a good faith effort to keep minors away from
gambling. The same isn't so for online casinos: A website can't tell whether
someone is 13 or 35." Frist makes a good point about underage gambling
online, if it were true. When 60 minutes did a report on internet gambling
and the producer let his son attempt to play online, he was consistently
denied by online casinos and poker rooms. The kid had to search through
several casinos before finding a shady website where he was allowed to use
his parents credit card, which he somehow was in possession of. Frist also
showed his ignorance of the subject of online casino regulation in his
letter to the Southern Baptists. Online casinos are legal and highly
regulated by the UK government and the other countries where they hold valid
gaming licenses. And everyone in the industry knows that if an online casino
is shady it would be online gaming suicide. Online, a casino running a tight
ship is what equals success. The problem Mr. Frist, with all this (and I
could go on disecting your article to your minority backers but I won't
waste my breath) is that this bill was attached to a Port Authority Bill and
was not given a chance to be debated in Congress. The bill was not even
presented to anyone in the House until 30 minutes before it went to the
floor. You actually attempted several times before the midnite hours of that
last night to bring it up to your cronies in the Senate only to have it be
knocked down by the more honest politicians who believed it was not nearly
as important as National Defense and the Security of our Nation.

Trinidad has banned casino slot machines and is moving to outlaw online
gambling - practices the socially conservative prime minister accuses of
encouraging vice and straining families. Prime Minister Patrick Manning
announced the changes in his budget proposal speech to Parliament on
Wednesday, less than a week after the U.S. Congress passed legislation
cracking down on Internet gambling. "Gaming activities are of great concern
to the government," he said. Manning, who said Trinidad also would
discontinue its national lottery, commands majority support in Parliament,
assuring passage of the online gambling prohibition. The Caribbean nation's
premier outlawed slot machines by executive order. No timetable was given to
eliminate online gaming and the national lottery in the twin-island country.
Oil-rich Trinidad and Tobago relies less on gambling and tourism than other
islands. But casinos have started to proliferate, with dozens opening here
over the past five years. The United States has been trying to control the
multibillion-dollar (-euro) online gambling industry, which has outposts in
several Caribbean countries. The legislation passed Saturday prohibits the
use of credit cards, checks and electronic fund transfers to settle online
wagers. Manning also announced a 15 percent tax increase on all tobacco
products. Alcohol produced inside the 15-nation bloc Caribbean Community
also will see a 15 percent tax increase, with taxes rising 30 percent on
liquor and beer from outside the region, he said.

No word of apology yet from all the City bankers, promoters, PR men, fund
managers and regulators who are responsible for the worst scandal to hit the
London stock market for years. Shares in online gaming companies have gone
through the floor after the U.S. Senate passed a Bill to forbid banks from
processing payments to gambling websites. That confirmed what many suspected
was already the case: online gambling in America is illegal. The pretence to
the contrary by the world's online gambling companies, congregated on the
London Stock Exchange, was wrong. Since Monday, investors have lost around
£3billion and shares in companies such as PartyGaming, Sportingbet and 888
Holdings, are worth about a third of what they were last Friday. One, World
Gaming, is close to being bust, and PartyGaming has cancelled its dividend.
So what, you may ask. Who cares if a few City slickers and spivs have lost
their shirts? Well, anybody with a pension should be worried. Some of these
companies were so large - PartyGaming was once in the FTSE 100 index - as to
form a significant part of the pension funds of most people up and down the
land. And big providers of unit trusts, like Fidelity, New Star and Merrill
Lynch, not to mention thousands of small investors, wandered like suckers
into the kind of chicanery which is the City at its worst.

To John Maynard Keynes, this story would be all too familiar. "When the
capital development of a country becomes the by-product of the activities of
a casino," he wrote, "the job is likely to be ill-done."

It is hard to think of a more obvious example of Casino Capitalism than a
bubble in shares of gambling companies, with no real assets, run by
secretive characters based offshore.

But for capitalism to work, it should not be a casino, where spivs can
easily part fools from their money. Indeed, there are important distinctions
between investment and gambling.

If you buy a share in a company, you own something, which gives you certain
rights: the right to receive a dividend, to vote at annual meetings, and to
participate in any capital uplift.

But a gamble is just a zero sum game. You either win or, more likely, you
lose everything.

"Gambling is a serious addiction that undermines the family, dashes dreams,
and frays the fabric of society," said Bill Frist, the Senate majority
leader.

"Congress has grappled with this issue for ten years and during that time
we've watched this shadow industry explode.

"The bottom line is simple: internet gambling is illegal. Although we can't
monitor every online gambler or regulate offshore gambling, we can police
financial institutions which disregard our laws."

President Bush is expected to sign the Bill in two weeks. I hope he does so.
It will be a sign that, unlike most politicians, he is not prepared to look
at the internet like a rabbit dazzled by headlights.

Of course there are those who are bound to cry that Bush is simply
protecting America's own offline gaming industry from competition.

But he is perfectly entitled to shield U.S. citizens from say, drugs,
fraudsters, computer hackers and the like.

If you are reminded of all the opportunities afforded to pornographers by
the internet, you would not be wrong. The link between the two is
personified by Ruth Parasol.

She is the founder of PartyGaming and was once heavily involved in sex lines
in Seattle, while working for a sex entrepreneur.

After the companies were prosecuted, she left and now lives in PartyGaming's
hometown of Gibraltar, where she refuses all interviews.

When Miss Parasol and her husband, Russ deLeon, plus two unknown Indian
colleagues, turned up in London two years ago, looking to float PartyGaming
on the Stock Exchange, the big American investment banks were not
interested.

Instead, the company hired Dresdner Kleinwort Wasserstein, a shadow of the
old Kleinwort Benson.

The Financial Services Authority could have proclaimed that PartyGaming was
an unsuitable company to list in London. But it declined to do so and, at
that stage, the four sold shares worth £960million.

The float was waved through, along with countless other dubious proposals,
such as the Russian oil giant Rosneft (but that's another story).

For the spivs of the world, London is the stock market of choice.

However, in America, online gambling is illegal. It always has been. It
counts as "wire fraud".

Congress has taken the decision that gambling should take place only in real
casinos, where it is easier to keep an eye on what is going on and where the
day-to-day regulation is the job of the individual states.

In the PartyGaming flotation prospectus, amid numerous risk warnings, the
company admitted it had received an email from the attorney general of
Louisiana ordering it to cease trading.

But, incredibly, the prospectus said: "PartyGaming has no knowledge of the
legitimacy of the email or its author" and "has not responded or sought to
determine its legitimacy."

Why on earth did all those professionals, investing our money, buy the
shares? Perhaps it was because they took some comfort that two bigwigs,
Michael Jackson, chairman of software group Sage, and Sir Brian Larcombe of
3i, had agreed to serve on the board, pocketing a million pounds each for
their services.

Say what you like about the founders of PartyGaming, they are not stupid.
Over the summer, they sold another big chunk of their holding, making a
further £230million. One of them resigned as a director, enabling him to
sell more shares.

Insiders scuttling from a company is a classic sign something is wrong, but
still the lemons at the big fund management houses held on. Then, in
September, two gambling executives were arrested while travelling in
America.

Rushed through Congress in the final hours of the 2005-2006 legislative
session, the Unlawful Internet Gambling Enforcement Act seems likely to fail
in its ultimate goal of prohibiting Americans from depositing and
withdrawing money from offshore-based online gambling companies. To be truly
effective, the regulations should mandate that America's financial networks
identify every product and service that an American purchases and to whom
payment is made. If the purchase is related to online gambling then
financial institutions should be required to deny it. The Act's
effectiveness will rely heavily upon how well the Fed and Treasury are able
to deal with "uncoded" transactions. While credit card transactions always
contain a code that identifies what type of product or service is being paid
for, paper checks, electronic checks and Automate Clearing House (ACH)
transactions do not have such a code that would allow financial institutions
to monitor and block them. As late as July the banking industry opposed an
earlier form of the legislation due to what the Independent Community
Bankers of America (ICBA) called "an impossible compliance burden for
'uncoded' transactions." It appears that hurrying the bill before Congress'
adjournment at the end of September was so important to Senate sponsor Jon
Kyl (R-Ariz) that he was willing to make concessions that could seriously
jeopardize its effectiveness. "We were fortunate to be able to work with the
bill's sponsors to minimize the burden that it could have imposed on banks,"
said Laura Fisher, the American Banking Association's (ABA) head of public
relations on issues relating to banking legislation and regulations.
"There's a provision in the bill that says the Treasury and the Federal
Reserve can exempt certain transactions that they deem impossible to track
and code. "The two specific transactions are checks and Automated Clearing
House payments."

The Federal Reserve and Treasury will be tasked with devising the
regulations that will enforce the Act after it is signed into law. The
process will involve an issued statement regarding how the Fed and Treasury
propose to enforce the law, followed by a public comment period during which
interested parties may submit thoughts and concerns about the matter.

The ICBA and ABA are certain to argue for exemptions for ACH payments as
well as paper and electronic checks.

"There are 40 billion checks processed every year, and tracking those would
mean having a staffer manually review each check and review whether each
payee is an illegal gambling site or a restaurant, and that is pretty much
impossible," said Fisher. "That would be a real compliance nightmare for
banks."

With regard to credit card transactions, it is already virtually impossible
for Americans to use credit and debit cards to pay for online gambling
services. Internet gambling presented a number of problems for American
credit card companies in the 90s, including chargebacks, lawsuits from
gamblers attempting to have their debts ruled unenforceable, and pressure
from lawmakers seeking to ban the activity. In 2001 the major credit card
companies responded by requiring all gambling-related Internet transactions
to be coded in such a way that made using their cards to pay for such
services impossible.

The situation created an opportunity for offshore-based alternative online
payment processors like Neteller, Firepay and Citadel to fill a consumer
demand that the credit card companies had ceased to service.

Today alternative payment processors are the most commonly used method of
payment for American online gamblers. Neteller, the largest of the payment
processors, boasts close to 3 million customers and received $119 million in
revenue in the first half of this year. 86 percent of the company's active
customer base resides in North America.

"The great unknown is how far into the Internet commerce stream federal
regulators are willing to go," said Professor I. Nelson Rose of Whittier Law
School. "The Act requires institutions like the Bank of America and Neteller
to identify and block transactions to unlawful gambling sites, whatever they
are. But, while the Bank of America will comply, Neteller might not, because
it is not subject to U.S. regulations."

Neteller is located in the Irish Sea between the UK and Ireland.

"The courts have the power to issue temporary restraining orders,
preliminary and permanent injunctions, to prevent restricted transactions,"
said Rose. "The only problem with this enormous power is that it is, again,
practically useless against payment processors who are entirely overseas."

The Unlawful Internet Gambling Prohibition Act contains no provisions that
would make it illegal for a person located in the U.S. to place a bet with
an online gambling company. All provisions are directed at trying to stop
the flow of money.

It is estimated that Internet gambling will generate $12 billion in revenue
in 2006, with more than half of it coming from players based in the United
States.

The first online gambling company to be approached in a possible buy off was
UKBetting, owner of a gambling website - UkBetting.com - and several smaller
betting and gambling news portals such as Football365.com, SportingLife.com,
TeamTalk.com, and Golf365.com. UKBetting only dropped 6% of its share price
off the London stock exchange as it assured holders Monday that it relied on
basically no US customers for income. As one of the few gambling companies
that only targets the UK, Europe, and other non-US entities, UKBetting is an
attractive company to other much larger businesses that were seriously
affected by the US ban, such as Party Gaming and 888. UKBetting did not
reveal who approached them Thursday and they did not reveal if they were
interested in being bought out, however, the fact that they were approached
is the first sign of a massive consolidation in the industry. After the news
of the possible buyout of UKBetting was revealed, their stock increased 12%
within just a few hours.

Online gambling in the U.S. could soon be history in the wake of a recently
passed bill banning the favourite pasttime of many Americans. Causing much
uproar in the industry, the United States Congress passed a surprise
legislation that would essentially prevent banks and credit card companies
from paying out funds to Websites for online gambling. All that's left is
for President George W. Bush to sign the papers, which Reuters says most
analysts believe is a "certainty". The bill has been incorporated into the
Safe Port Act, which, although meant to improve homeland security, includes
30+ pages related to the topic of the prevention of online gambling. The
only exceptions offered are in relation to horse racing and state lotteries.
A group of poker advocates (including companies and players) expressed their
frustrations that the government skipped the public debate process on the
topic entirely, and simply "piggy-backed [the bill] onto a bill that was
guaranteed to pass." Michael Bolcerek, President of the Poker Players
Alliance, also spoke out against the bill, saying that it "reeks of
political gamesmanship. Congress has an opportunity to regulate and tax
online poker leading to potentially billions of dollars in annual revenue
for the federal government and the states," he said. "If the goal is to
protect people from the possible dangers of gambling, a prohibition is the
worst way of achieving it. All it will do is push poker underground,
essentially creating online speakeasies, which will provide no protection
for youths, no services for the problem gambler, and leave only the most
unscrupulous operators in the game." If the bill is passed, not only will
the U.S. be filled with disgruntled players and online gambling site
providers, but financial institutions will have to pay closer attention to
their transactions, keeping a watchful eye on anything related to online
gambling.

The Canadian Hockey League has asked its lawyers to look at an off-shore
internet gambling website where bets can be placed on major junior hockey
games and the Memorial Cup. The CHL includes the Ontario, Western and Quebec
major junior leagues that total 59 teams of players aged 16 to 20. The
Austrian website bwin.com invites bets on OHL, WHL and QMJHL games and the
Memorial Cup, which is troubling to a league in which its players are part
of a teenage demographic that spends a lot of time online. "Surprised would
be a fair term and disappointed more than anything," CHL commissioner David
Branch said Wednesday from Toronto. "We're looking at options. Gambling is
an issue we cannot choose to ignore." Betting on sports is a grey and in
many ways unregulated area. Office hockey and football pools are common.
Anyone over the age of 18 can buy a Pro-Line ticket, or its Sports Select
equivalent in Quebec and B.C., at the corner store and put money down on an
array of pro sports including the NHL, NFL, Major League Baseball, college
sports and NASCAR. But when those playing the sport place bets, it becomes a
moral and often legal issue. The long-running controversy over whether Pete
Rose gambled on baseball has dogged him for years and kept him out of the
Hall of Fame. Italian soccer was rocked this year by a match-fixing scandal.
Phoenix Coyotes assistant coach Rick Tocchet was charged last year along
with two other men for running an illegal gambling ring.

Teenage hockey players could be approached and influenced by people placing
bets or be tempted to place bets themselves.

"I think we'd be naive to think that couldn't happen," Kitchener Rangers
head coach and GM Peter DeBoer said. "Circumstances set it up that it's more
of a possibility at our level with them being teenagers and not having a lot
money than at the pro level where they are mature and they do have money.

"I think we're a lot more susceptible to that than even the pros would be.
We're dealing with teenage kids and it would just be ignorance to how bad a
position they could be put in if they got onto one of these sites."

An option the CHL will consider is including a seminar on gambling as it
does on drugs and alcohol at the start of every season.

"With young people, education is paramount," Branch said, adding that the
NHL and Players' Association have resources on the subject that the junior
leagues could use to inform players on the dangers of gambling.

DeBoer feels a gambling seminar will be necessary.

"We run seminars honestly from training camp right to the first regular
season game: drugs and alcohol and concussions and the new rules and hits
from behind and we'll add this," he said. "You are dealing with kids as
young as 16. It's important we educate them on all those things."

The Pennsylvania Senate recognizes the severe health hazards of second-hand
smoke and wants to make sure you are fully protected -- unless you're in a
casino.
That outrageous loophole was part of a gambling-reform bill the Senate
passed last week. It prevents the state's 14 new slots venues from being
subjected to anti-smoking measures. Gary Tuma, an aide to Democratic State
Sen. Vince Fumo, of Philadelphia, noted that other states have shown
"considerable drops in revenue" when casinos are made to go smoke-free. "The
drops are 20 to 30 percent," Tuma said. "In a city like Pittsburgh, it could
be an $80 million, $100 million loss."
Why are politicians willing to accept that argument when it applies to
casinos, but not for restaurants, bars and private clubs? It's because of
the incredible political power that casino operators wield in Pennsylvania
these days. Gov. Rendell and the Legislature are counting on millions from
casinos to pay for property tax reform. If those dollars don't materialize,
neither do the tax benefits. So it doesn't matter if a local restaurant or
club loses business because its patrons are banned from smoking. But if
those same restrictions keep people away from slot machines, it's a
potential state crisis. To their credit, Allegheny County officials blanched
at the casino exemption when they learned of its existence last week. County
council approved a smoking ban last Tuesday, but many members are
reconsidering their votes after the Senate's action. It's been our position
all along that anti- smoking laws intrude on a decision that should be left
to private businesses and their customers. Politicians who contend that
smoking is too unhealthy to be permitted in public lose their credibility
when they hand out exemptions as political favors.

Russia will set up not more than four zones where gambling houses may run
their businesses, speaker of the State Duma lower house of the Russian
parliament Boris Gryzlov said Wednesday after a meeting between the house
factions' leaders and the Russian president earlier in the day. It is
envisioned by amendments to the law on gambling, submitted by the Russian
president to the State Duma. These areas will not be residential, Gryzlov
said. "It is planned to allocate not more than four limited territories,
where gambling business will be possible," the speaker went on to say,
"these can be two territories in the European part of Russia, one in
Siberia, and one in the Far East. At present, territories free from
residents are offered." During the meeting with the lawmakers, Putin
expressed the hope for the soonest approval of the amendments to the law on
gambling: "I'm hoping Duma lawmakers will finalize the bill and approve it
in the nearest future. It should fundamentally change the situation in this
sphere." The president noted that "police had zeroed in on a number of
entertainment and gambling centers." "It is another reason to address the
problem on the whole," the head of the state said. This, as does the
alcoholization of the population, causes serious moral and often material
damage to us," he said.

A new bill making it illegal for banks and credit cards to process gaming
payments has been passed by the US Congress, could this effect Blackburn
Rovers, with them obviously sponsored by online betting firm bet24. The move
is aimed to clamp down on betting, which ultimately leads to serious
financial trouble for many people. So should the bill, which has been passed
in the United States, be signed into law by American President George W
Bush, which is said to be highly likely, a major clampdown on online
gambling will be undertaken in the United Sates of America. It would then be
illegal for Banks and Credit cards to process online gaming payments from
the US. Although I'd heard of the situation I didn't really give it much
thought until Vital Blackburn Rovers user Petesta brought the matter fully
to my attention by posting this recent comment asking: "What is the
situation re the club's new sponsor's bet24 with the problems we have heard
about in the USA for sports betting firms? Does this mean they won't have
the money to pay rovers in full for the "lucrative" contract?" From what I
can make out many British based companies work in a system that goes through
the US so this is already having some effect on the online gambling
companies in this county, with their share prices dropping. The system
would no longer be able to work in such a way, through the US, but unless
this law comes into effect in this, and other countries, although the US is
major financial force and ripe with gambling it shouldn't cause too much
trouble to Blackburn Rovers Football club or bet24?

Congress approved legislation restricting Internet gambling just before
beginning a lengthy recess, prompting a major shakeup in the online wagering
world.
News of the congressional action sent online gambling companies into a
tailspin when stock markets reopened Oct. 2. Shares of PartyGaming, the
largest of the Internet firms, decreased 58 percent on the London Stock
Exchange, with the company losing about $3.8 billion of its market
capitalization in the process, according to The New York Times. Another
online company, 888 Holdings, saw its shares fall 26 percent on the same
day, The Times reported. Both companies, which are based in Gibraltar, said
they would halt transactions with American bettors if Bush, as is expected,
signs the bill into law. PartyGaming receives 78 percent of its income from
the United States, The Times reported. The Senate and House of
Representatives passed the Unlawful Internet Gambling Enforcement Act in the
early hours of Sept. 30. Both houses approved the measure as part of a bill
to provide protection for America's ports, with the Senate passing it by a
voice vote and the House in a 409-2 roll call. The gambling measure requires
financial institutions to block credit card and other payments to Internet
wagering businesses, which are primarily located overseas. Mitch Garber,
PartyGaming chief executive, told The Times, "This development is a
significant setback for our company, our shareholders, our players and our
industry." The private nature of Internet gambling has result in its
widespread use by minors and young adults as well as addiction problems for
people of all ages, opponents of the booming illegal enterprise have said.
Americans were expected to pay $5.9 billion, about half of the $12 billion
wagered worldwide on Internet gambling, to online casinos overseas this
year, bill sponsors said. Online gambling sites frequently act as fronts for
money laundering, drug trafficking and financing for terrorists, they said.

Richard Land, president of the Southern Baptist Ethics & Religious Liberty
Commission, said, "All friends of families should be delighted with this
legislation, which will help to curb the growing scourge of Internet
gambling, one of the most rapidly expanding addictions in America. Thousands
of families have faced financial ruin and bankruptcy because of such
Internet gambling addictions.

"This legislation will make it more difficult for these Internet gambling
predators to reach into the pockets of America's families and steal the
future of children and spouses," he said. "Congress should be applauded for
passing this legislation."

Rep. Jim Leach, R.-Iowa, who led the House effort in behalf of the measure,
said in a written statement, "If Congress had not acted, gamblers would soon
be able to place bets not just from home computers but from their cell
phones while they drive home from work or their Blackberries as they wait in
line at the movies.

"Internet gambling's characteristics are unique. Never has it been so easy
to lose so much money so quickly at such a young age," Leach said. "Everyone
loses if this industry continues its remarkable growth trends."

The legislation requires the Treasury Department to publish regulations that
would require financial institutions to bar transactions between U.S.
bettors and online gambling companies. Violators could be fined or
penalized.

The measure, however, does not include a provision passed earlier by the
House that would have updated a 1961 law prohibiting betting over telephone
wires to cover online gambling.

Politics has again made for strange bedfellows. This time, the oddly linked
pair is port security and Internet gambling. In the last hours before
Congress adjourned for the midterm election campaign, the long-awaited port
security bill passed both chambers with an anomalous appendage: the Unlawful
Internet Gambling Enforcement Act of 2006. If signed by President Bush, the
new law would make it a crime for banks, credit card companies and other
financial institutions to transfer funds for American gamblers to Internet
gambling sites. The impact was almost immediate. Shares of PartyGaming PLC,
which operates the world's most popular poker site, PartyPoker.com, fell 58
percent on Monday. Shares of Sportingbet, which owns ParadisePoker.com, fell
64 percent. Overall, according to Cox News Service, the plunge wiped off as
much as $7.5 billion in stock value. The legislative maneuver was seen as a
way for congressional Republicans to show they'd done something for the
religious right in a session in which Congress accomplished so little for
almost everyone. "Gambling from your bedroom or living room or dormitory is
not a socially useful activity," according to a statement from the office of
Rep. Jim Leach, R-Iowa, who pushed the legislation. While accessibility of
online gambling has surely lured its share of gullible gamers, just how
comfortable should we be with government dictating which activities
undertaken in our bedroom, living room or dormitory are "socially useful"?

Disgraced Florida Congressman Mark Foley was a friend of internet gambling.
Gambling911.com has learned he voted against a bill to outlaw online
gambling, apparently between internet sex breaks with young Congressional
pages. Bluff Magazine, a leading poker monthly, obtained the votes from each
Congress person to ban internet gambling in which Foley voted "ney". Could
Mark Foley have been an online poker addict on top of an alcoholic and sex
depraved underage Congressional page stalker? Foley was one of only a few
Republicans to vote against the Republican-driven anti poker prohibition.
Late Friday night, Republican Senator Majority Leader Bill Frist slipped a
more "watered down" version of an internet gambling measure into a port
security bill. Nevada Congresswoman Shelley Berkley condemned the Republican
party for sneaking in measure while eliminating provisions that would beef
up the security of the nation's rail and mass transit system. That bill
passed both the House and Senate during the wee hours of Saturday morning
while much of the internet gambling industry was sound asleep and threatened
to endanger the votes for Republicans by some 50 million American poker
players this coming Election Day. The nearly 100,000 member strong Poker
Players Alliance has urged its members not to vote for those Congresspersons
who supported the bill, claiming it "reeks of protectionism". The bill
carves out niches for horse racing and state lotteries.

Shocking new Internet messages surfaced yesterday, revealing that former
Rep. Mark Foley engaged in online sex with a male high-school page - while
taking a break from an important vote on the House floor.

The graphic exchange published on ABC News website follows what the two
described as earlier "orgasms".

"Ok[sic] I better go vote . . . did you know you would have this effect on
me," writes Maf54, identified as Foley, after the two apparently had what
they described to each other earlier as orgasms, according to ABC.

"You go vote . . . I don't want to keep you from doing your job," the teen
responds.

"Can I have a kiss goodnight," Foley asks.

"*:- KISS," the teen responds.

It is not known at this time whether Mark Foley had opened any internet
gambling accounts.

Frist has condemned online gambling as "a serious addiction that undermines
the family, dashes dreams, and frays the fabric of society".

His colleague, Mark Foley, apparently did not agree with that sentiment.

The shares of several Canadian-based online gaming companies plunged in mid
afternoon trading today after U.S. Congress approved new legislation aimed
at restricting most forms of online gaming. As of 2:15 p.m., the shares of
leading software company Cryptologic Inc. fell $4.58, or more than 19 per
cent, to $20.05 in midafternoon trading, a week after the Toronto company
said it will move its head office from Toronto to Dublin. The U.S.
legislation, part of a port securities bill passed by the House and Senate
on Saturday, prohibits the use of credit cards, cheques and electronic fund
transfers for online gaming. Other Canadian companies affected by the new
leglislation are Vancouver-based Chartwell Technology Inc., whose shares
fell 40 cents or 18 per cent to $1.75; software firm Las Vegas From
Home.com, whose shares slipped one-third to 10 cents; and Internet Bingo
firm Parlay Entertainment Inc., whose sharese lost 11 cents or 9.5 per cent
to $1.05 in over-the-counter trading. The new legislation comes even after
years of lobbying by both conservative U.S. politicians and by casino owners
in the powerful gaming industry. Casino owners have been worried about the
steady growth of the online gambling industry, which may cut into their
business. In all, the global online gambling market is expected to generate
$23 billion (U.S.) in revenue by 2009, compared with about $8.4 billion in
2004, according to a recent analyst report.

In a move engineered by Senate Majority Leader Bill Frist (R - Tenn.), the
United States Senate on Saturday passed legislation, by a voice vote, that
ostensibly would tighten security restrictions on cargo shipments from
overseas. But attached to the tail end of this bill was language from an
earlier House bill that was going nowhere since last July, which effectively
makes it illegal for a bank or other institution to transfer funds to
organizations that are involved in so-called "unlawful Internet gambling."
Although the measure does not render Internet gambling in the U.S. unlawful,
it may as well have, since the new language makes it tremendously more
difficult, if not impossible, for banks to process online gambling
transactions even when they may be permitted. The bill whose language was
grafted onto the SAFE Ports Act, last known as the Unlawful Internet
Gambling and Prohibition Act, did spell out certain exceptions for legal
online gambling, including between states where gambling was legalized,
within individual states or tribal territories, as well as certain other
categories such as some horse racing wagers. Earlier, President Bush
indicated he would be willing to sign the gambling act into law, were he to
receive it on his desk. Instead, the President will find it tucked beneath
anti-terrorism and security legislation, which he also has indicated he
supports. "No person engaged in the business of betting or wagering," reads
the language of the Act, "may knowingly accept, in connection with the
participation of another person in unlawful Internet gambling: credit...an
electronic funds transfer...any check [or] draft...[or] the proceeds of any
other form of financial transaction."

Within a 270-day period, the Federal Reserve Board of Governors has been
instructed to work out a plan with financial institutions to implement an
electronic regulatory system that will block funds transfers that fall under
new federal restrictions.

The very notion that such a system will be created has resulted in the
shutdown, within hours, of U.S. branches of Internet gambling operations, a
great many of them based in the UK. The Times of London reported today that
PartyGaming, Sportingbet, World Gaming, and 888 Holdings are among the
British companies that saw giant chunks of their capital value erased from
the books: as much as 3 billion pounds ($5.66 billion USD) ceasing to exist,
and stock value plummeting as much as 75%.

PartyGaming today issued this statement: "After taking extensive legal
advice, the Board of PartyGaming Plc has concluded that the new legislation,
if signed into law, will make it practically impossible to provide US
residents with access to its real money poker and other real money gaming
sites. As a result of this development, the Board of PartyGaming has
determined that if the President signs the Act into law, the Company will
suspend all real money gaming business with US residents, and such
suspension will continue indefinitely, subject to clarification of the
interpretation and enforcement of US law and the impact on financial
institutions of this and other related legislation." Free games access, and
gambling access to non-US customers, will remain unaffected.

In Montreal, Optimal Group, which co-owns an online payment processing
service, saw its share value plunge today a full 31%, to $8.08 CAN.

Sen. Frist was quoted over the weekend as saying, "Although we can't monitor
every online gambler or regulate offshore gambling, we can police the
financial institutions that disregard our laws."

A December 2002 Government Accounting Office report looked into the
possibility of whether Internet gambling operations could effectively be
used as fronts for money laundering. "Law enforcement officials...cited
several characteristics of Internet gambling that they believed made it
vulnerable to money laundering," the report reads, "including the volume,
speed, and international reach of Internet transactions and the offshore
locations of Internet gambling sites. In their view, these characteristics
promoted a high level of anonymity and gave rise to complex jurisdictional
issues." The report made no recommendations, but certainly raised the
specter of possible complicity.

Internet gambling legislation passed late last week by the U.S. Congress,
which led to a major sell-off of Britain-based online gambling stocks
Monday, remains a concern to the U.S. banking industry but isn't as
burdensome as feared. "We got some language in the bill that looks like it
protects the financial services industry," said Steve Verdier, director of
congressional relations for the Independent Community Bankers of America,
which represents almost 5,000 banks in the United States. "It could have
been a lot worse." The legislation is designed to prohibit U.S. banks and
credit card companies from processing payments for illegal online gambling.
Financial services companies and the U.S. Chamber of Commerce had expressed
concerns about the compliance burdens that would be imposed, such as
tracking and blocking potentially millions of transactions. Under the
legislation as passed, "If you are acting as a normal bank, and you're not
in some sort of conspiracy with a betting house, then you are not going to
be held liable," Verdier said. In addition, the legislation will be guided
and enforced by regulations written by the Federal Reserve and the U.S.
Treasury Department. "If they find that the banks just don't have the
technology to track and block these transactions, then we don't have to,"
Verdier said. "The Fed and Treasury are not supposed to ask us to do the
impossible."

Still, Verdier said, "we will have to see how those regulations get
written."

The legislation, attached to an unrelated port security bill, was approved
by the U.S. House of Representatives Friday and by the U.S. Senate early
Saturday. It is expected to be signed into law by President Bush.

Shares in Britain-based betting companies, such as PartyGaming PLC, 888
Holdings PLC and Sportingbet PLC, plunged Monday. The companies said they
would suspend business from the United States if the legislation is enacted.

Shares in online gambling companies listed in London lost more than half
their value immediately after a dramatic move by US authorities to ban
Internet betting.
The market was taken by surprise when the US Congress unexpectedly rushed
through the Unlawful Internet Gambling Enforcement Act on Saturday, dealers
said.
Meanwhile, US casino owner Harrah's Entertainment Inc. said that
private-equity firms Apollo Management and Texas Pacific Group made a buyout
bid of $15.05 billion, or $81 per share. It would be the biggest deal ever
for a casino operator and the fifth-largest leveraged buyout in history. US
President George Bush is expected to sign the anti-gambling bill into law
this week. It would make it illegal for finance companies to collect
credit-card payments from customers using Internet gaming sites. The online
gaming business last year generated around 15 billion dollars globally, but
faces deep opposition from US lawmakers. "It is extraordinary how many
American families have been touched by large losses from Internet gambling,"
said US Representative Jim Leach, the bill's main sponsor in the House, in a
statement after its passage on Saturday. Critics label the ban "the new
prohibition," referring to the spectacular failure last century by the US
government to ban all alcohol. But whether the ban eventually succeeds or
fails is of little current interest to the market. "This has come as a major
shock to the industry, where most observers expected the legislation to
fail," said Stephen Ford, an analyst for broker firm Collins Stewart. "It
also comes as a major shock to the stock market and unsurprisingly stock
prices have fallen significantly across all online gaming stocks exposed to
the US."

The Harrah's bid, called "aggressive" in a Wall Street Journal report,
reflects a 22 percent premium on Harrah's closing stock price Friday. By
mid-morning trading Monday, the firm's shares rose 14.27 percent, or $9.48,
to $75.91.

Harrah's lists more than $12 billion in equity and more than $10 billion in
debt. The company reported $7.1 billion in revenue for 2005.

Canadian Internet gambling companies were rattled Monday as their stocks
took a nosedive in the wake of legislation passed by the U.S. Congress that
effectively outlaws online wagering in the United States. Shares in leading
software company CryptoLogic Inc. (TSX:CRY) took the biggest hit, retreating
more than 19 per cent, or $4.76, to $19.87 on the Toronto Stock Exchange.
The legislation, part of a port securities bill passed by the House and
Senate on Saturday, prohibits the use of credit cards, cheques and
electronic fund transfers for online gaming. CryptoLogic said it had been
preparing for that eventuality for five years and effective immediately
licensees of WagerLogic, the company's licensing subsidiary, will stop
taking wagers from U.S.-based players. Last week, the company announced
plans to move its head office from Toronto to Dublin, noting that more than
70 per cent of its licensees' revenue now comes from outside the United
States. The company's chief financial officer Stephen Taylor said in a phone
interview that the company will remain "strongly committed to Canada." "We
have a technical staff of in excess of 200 people based in Toronto and so
that operation will be staying," he said.

"There will be an impact on our financial results ... and it will take some
time before things shake out and get back to more normalized earning
levels," Taylor added.

Other Canadian companies involved in the industry found their stock
similarly stricken by the news.

Dynasty Gaming Inc. (TSXV:DNY) dropped three cents to 50 cents Monday as the
company, headquartered in Montreal, said it would sell three non-core
subsidiaries and focus on rolling out a play-for-points mah-jong game in
China.

Vancouver-based Chartwell Technology Inc. (TSX:CWH) was down 35 cents or
16.3 per cent to $1.80, and ESI Entertainment Systems Inc. (TSX:ESY) fell 40
cents, or 15 per cent, to $2.20 on the TSX.

Shares in software firm Las Vegas From Home.com (TSXV:LVH) tumbled four
cents or 26 per cent to 11.5 cents on the TSX Venture Exchange, while
Internet bingo firm Parlay Entertainment Inc. (TSXV:PEI) lost 44 cents, or
29 per cent, to $1.06.

Parlay is one of the Canadian companies with the most exposure because it
generates 60 per cent of its revenues from the United States, said Paradigm
Capital Inc. analyst Gabriel Leung.

"We believe there could also be a wave of consolidation given the financial
infeasibility for some of these companies to exist as standalone companies
in the event of a complete loss of U.S. player activity," Leung added in a
financial report.

Spencer Churchill, an analyst for Clarus Securities, said he expects to see
an impact on Canadian companies, though he doesn't anticipate any major
domicile shifts outside of the country.

"Canadian institutional investors are basically going to take a big pass on
this base for some time until we see a major shakeout of the revenues
(generated from the U.S.) that are basically going to zero for most of these
companies that have U.S.-facing operations."

British online gambling companies, including Sportingbet PLC and PartyGaming
PLC, also saw their stocks dive on Monday. PartyGaming, the world's biggest
online gambling company, said it would pull out of the U.S. if President
George W. Bush signs the legislation into law.

The companies hit hardest by the ruling offer betting markets denominated in
U.S. dollars, and usually operate from bases in the Caribbean or Central
America. Most of the big British and Irish sites, by contrast, keep their
operations in Europe and take deposits only off credit cards denominated in
pounds and euros.

Sportingbet, which does more than 60 per cent of its business in the U.S.,
said the impact of the legislation was unclear. However, the company called
off talks about a potential bid for World Gaming.

Shares in PartyGaming plunged 60 per cent to 43 pence (81 cents US), and
shares in 888 sank 48 per cent to 76 pence ($1.42). Sportingbet shares
dropped 67 per cent to 60 pence ($1.12).

The U.S. decision comes as some countries are focusing on legalization and
regulation of online gaming.

In the United Kingdom the government has moved to regulate online gambling
sites. Italy backed away from its original position against Internet
gambling and now plans to make the websites legal as early as 2007.

THE costs of policing a new US internet gambling ban for banks and credit
card companies will be determined by regulators in the coming months,
industry officials said. Government officials are expected to propose a
"coding-and-blocking" system that will identify and stop payment to online
gambling sites, experts said. Many banks and credit card companies already
voluntarily block internet gambling transactions using such a system. The
Treasury Department and Federal Reserve Board have nine months to draft
regulations after the new law, included in a package of port security
measures passed by Congress and expected to be signed into law by President
George W. Bush. US banks and credit card companies are optimistic that
officials will prepare a workable system. "If the Treasury (department) and
Fed can come up with reasonable rules here, it shouldn't be that bad,"
Oliver Ireland, a lawyer who works with several financial services payment
providers, including Visa, said. "The way they built (the new law), it gives
us a chance to work with the regulators in a constructive way to come up
with a system," Greg Mesack, director of government relations for industry
trade group America's Community Bankers said.

British-based gaming companies such as Sportingbet, PartyGaming Plc and 888
Holdings Plc said on Monday they would likely pull out of the US market,
their biggest source of revenue, and their stocks plunged.

Some banking industry officials had worried that the new law would make them
responsible for blocking payments by check as well as credit card payments -
a requirement they had said would be unworkable.

But those concerns were allayed when lawmakers agreed to a provision
allowing the Treasury and the Fed to exempt checks from the requirement.

Experts said the system would not be fool-proof, but would bar the vast
majority of bettors.

"I suspect some smart enterprising person out there will find a way to (get
around) it. But for your average person who wants to get out there and bet
on college football, you're not going to do it," one lobbyist said.

THE US Government stunned the online gambling industry over the weekend by
passing laws that effectively ban the services from their biggest market.
The $US6 billion ($8 billion) industry went into meltdown over the news,
with shares in UK-listed PartyGaming, 888 Holdings and SportingBet - which
has operations in Australia - plummeting in early London trading overnight.
Also in the line of fire is Betcorp, which is listed on the Australian Stock
Exchange and, like the UK-listed companies, counts on US customers for most
of its business. The US Senate, which was expected to block the legislation,
sneaked the bill through early Saturday morning US time, following some
last-minute manoeuvring ahead of the Senate break for mid-term elections.
The bill outlaws the processing of bets for online gaming companies,
effectively preventing US banks and credit card companies from doing
business with the operators. It could be signed into law by President Bush
as early as this week. The bill excludes US-based online betting on services
like horse racing and lotteries and has no impact on American casinos and
other gambling operations. The US Government has been in a tussle with the
industry for more than a decade, dating back to when foreign operators
accepted bets from US citizens over the phone from offshore operations in
the Caribbean.

These online sports betting, poker and casino operators have been drawn to
the London Stock Exchange, where investors have profited from the explosive
growth in US internet wagers, despite their questionable legal status.

That is expected to change. According to UK reports, 888 Holdings,
PartyGaming, and SportingBet are expected to halt their US-facing
operations.

Shares in PartyGaming slid 64.5p, or 59 per cent, to 43.5p in early London
trading. SportingBet shares were down 69 per cent to 58p and 888 Holdings 48
per cent to 76p.

The latest move is not entirely surprising given the hard line already being
taken by US authorities. SportingBet's former chairman, Peter Dicks, was
arrested last month on a warrant issued by Louisiana State Police, but was
released by a New York court recently. Mr Dicks faced being extradited to
the state on charges that include gambling by computer, a charge that could
land him a year in jail.

In July, the then chief executive of BetonSports, David Carruthers, was
arrested in Texas, sending internet gambling stocks plunging.

Mr Carruthers, who has since been sacked by BetonSports, has pleaded not
guilty to racketeering and tax evasion.

Australian-listed Betcorp, which generates most of its business from US
sports betting, announced last month that it would discontinue its phone
service to US customers after, as it said, taking legal advice. The
company's stock has more than halved since the troubles began in July,
closing at its lowest levels in more than two years yesterday at $1.88.

Betcorp will leave the Australian Stock Exchange this month to concentrate
on its British listing. Executives were not available for comment yesterday.

Betcorp was one of the first online companies to be targeted for allegedly
contravening US laws.

CryptoLogic saw its shares tumble after the maker of Internet gambling
software said licensees of WagerLogic, its licensing unit, will no longer
take wagers from U.S.-based players. The company cited new legislation
expected to be signed Monday by President Bush that outlaws the processing
of financial transactions in the U.S. online gambling market. CryptoLogic
tried to take an upbeat view, saying it has spent five years shifting its
revenue base to European markets and that it's "positioned for long-term
profitability and growth." Investors weren't as optimistic, sending shares
of CryptoLogic sinking 27% to $16.10 in early trading. "While the new U.S.
developments will be a challenge for the whole industry, our company's
diversification, strong balance sheet, thriving European customers and
potential new business in emerging markets enable us to face the future with
confidence," the company said. More than 70% of its licensees' revenue now
comes from outside the U.S.

Canadian online payment processing company Optimal Group Inc. said Monday
that online gambling legislation passed over the weekend by the U.S.
Congress will have a "significant negative impact" on its majority-owned
FireOne Group PLC unit. Congress passed the Unlawful Internet Gambling
Enforcement Act of 2006 on Saturday, which when enacted, will prohibit
gambling businesses from accepting credit cards, checks and electronic fund
transfers to settle online wagers.
FireOne provides payment processing services for the online gambling
industry. Optimal holds a 76 percent stake in the company. Optimal said the
its Optimal payments unit is not affected by the act. The company also said
it divested its Optimal services group hardware maintenance and services
business. The move will not have a material impact on financial statements.

Online gambling companies in the U.K. took a huge hit Monday as investors
reacted to news that the U.S. Congress had passed legislation prohibiting
the use of credit cards, checks and electronic fund transfers for online
gaming. Shares of British gambling companies, including Sportingbet and
PartyGaming, were sharply lower Monday. CBS News reporter Vicki Barker in
London reported that shares of PartyGaming, the world's largest online
gambling site, were down about 60 percent in early Monday trading.
PartyGaming says it will pull out of the U.S. market if President Bush signs
the legislation into law. 888 Holdings says it is suspending online betting
operations in the U.S. as a result, and Sportingbet says it has called off
takeover talks with World Gaming. Gambling in any form is illegal in most of
the United States, but is an accepted feature of British society. Betting
houses, offering wagers on everything from horse racing to whether it will
snow on Christmas morning, are as common on the streets of London as pubs.
But just because it's big business in Britain, doesn't earn it an honored
place in the American market. As soon as the Internet began blurring the
lines between U.S. and U.K. commerce, members of the U.S. Congress reacted.
Republican Senator Bill Frist is one of the lawmakers who has fought for
years to see online gambling banned, maintaining simply that it's illegal.
The online betting legislation got through Congress as a tagalong on a port
securities bill passed on Saturday, which was largely popular and easily won
the necessary votes. President Bush has used his power of veto very
sparingly during his leadership, and isn't likely to scrap the port security
bill over the gambling legislation, which is also very popular among the
conservative base of the Republican party.

The ball landing on zero on the roulette wheel when you've bet your last
chip. That dead cert falling at the first, with all your wages in its
nosebag. Your pocket aces getting cracked while a pair of twos scoops the
pot. Roll up all that bad luck into one big ball of misery and you might get
just a tiny inkling of how the execs running online gambling businesses feel
today. In a shock move the US has passed the Unlawful Internet Gambling
Enforcement Act which aims to crack down on online gambling companies by
making it illegal for banks and credit card companies to make payments to
online gambling sites. Some poker fans in the US are already talking about a
new era of prohibition similar to the 1930s, with the Poker Players Alliance
claiming the law will "push poker underground, essentially creating online
speakeasies". In some ways the gambling industry shouldn't be surprised -
online gambling has been barely tolerated by the US for a number of years,
with senate majority leader Bill Frist going so far as to describe it as a
"shadow industry". Perhaps the gambling companies felt that sooner or later
the US would have to bow to the pressure of the markets. But today that
looks like a gamble they may have lost.

Two global online gambling companies have halted U.S. operations after the
U.S. Senate criminalized such activity, sending their shares plummeting
Monday.
Lawmakers early Saturday outlawed the processing of bets by U.S. residents
by banks and credit companies in a surprise assault on the United States` $6
billion Internet gambling industry. That, in turn, prompted Britain`s 888
Holdings and PartyGaming, the world`s largest Internet gambling concern, to
cancel all U.S. business. Shares in global Internet gambling companies
tumbled, the Telegraph of London reported Monday. Officers of such companies
were livid. 'This is the worst form of protectionism I have ever seen,' one
such officer told the Telegraph. 'This will drive Internet gambling
underground and consumer protection will go out of the window. The religious
groups that lobbied for this may live to regret it.' But the Senate`s
leader sounded the opposite of regretful. 'Gambling is a serious addiction
that undermines the family, dashes dreams and frays the fabric of society,'
said Sen. Bill Frist, R-Tenn. 'The bottom line is simple: Internet gambling
is illegal. Although we can`t monitor every online gambler or regulate
offshore gambling, we can police the financial institutions that disregard
our laws.'

AMERICA's $6 billion (£3.2 billion) internet gambling industry is facing
meltdown after the US Senate pushed through a Bill at the weekend outlawing
the processing of bets by banks and credit companies. The surprise move,
which is expected to spark a massive share sell-off, will prompt
London-listed 888 Holdings to announce this morning that it is halting its
entire US-facing operation, accounting for half its business. PartyGaming,
the world's biggest internet gambling company, said last night that it was
"still evaluating the situation", although industry sources believe it will
also announce a cessation of its services to American punters. However
Sportingbet, which was celebrating on Friday after a New York court released
its former chairman, who had been facing gambling charges, will tell
investors that it is still digesting the implications of the Bill. Despite
the Bill's prescriptive nature, it excludes local online betting on
horseracing, fantasy leagues and lotteries. It also has no impact on the
hundreds of casinos and gambling emporia that dot America, ranging from the
neon palaces of Las Vegas and Atlantic City to the riverboat casinos that
ply their trade on the Mississippi. One senior internet gambling executive
said last night: "This is the worst form of protectionism I have ever seen.
This will drive internet gambling underground and consumer protection will
go out of the window. The religious groups that lobbied for this may live to
regret it." The Unlawful Internet Gambling Enforcement Bill needs only to be
signed by President Bush to become law. Legal sources predict that he will
do so in the next two weeks, possibly as early as Wednesday.