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Non-Tech : Gambling, The Next Great Internet Industry -- Ignore unavailable to you. Want to Upgrade?

To: kidl who wrote (532)	5/17/2001 9:09:50 AM
From: Herc	Respond to of 827

It's interesting that there is little support in N.J. A continued erosion in state tax revenues could change that quickly.

To: kidl who wrote (532)	5/21/2001 7:55:43 AM
From: Herc	Respond to of 827

Youbet.com, Gemstar-TV Guide Forge Deal for Horse-Racing Content, Betting By JOHN LIPPMAN Staff Reporter of THE WALL STREET JOURNAL WOODLAND HILLS, Calif. -- Youbet.com Inc., which provides online wagering for horse racing, formed a partnership with Gemstar-TV Guide International Inc. that could eventually lead to Gemstar acquiring a majority stake in Youbet.com. Youbet.com (youbet.com) allows customers to place bets online for horse tracks in 39 states. Gemstar-TV Guide, Pasadena, Calif., through its TVG Network unit, operates a cable-TV channel dedicated to horse racing and also offers in-home wagering services. The deal between the two companies provides TVG with access to Youbet.com's technology and a share in Youbet.com's revenue from wagering activities. At the same time, Youbet.com will gain content from major horse tracks under exclusive contract to TVG for which Youbet.com didn't previously have access. Youbet.com to Reduce Its Work Force by 29% (Nov. 28, 2000) Playing the Ponies in Your Underwear (May 1, 2000) Youbet.com Agrees to Pay $1.3 Million to Settle Probe (Jan. 14, 2000) "We did this deal primarily because content is king, but what we did not have is half the racetrack activity because [TVG] was locked into those markets," says Robert Fell, chief executive of Youbet.com. TVG has exclusive contracts with 20 major horse-racing tracks, including Churchill Downs in Louisville, Ky., and Hollywood Park in Los Angeles, that account for about 45% of all wagering activity, said Mr. Fell. "The biggest reason subscribers canceled with us or did not sign up is that we have not had the major track content," he added. Youbet.com has about 15,000 subscribers who pay a monthly fee of about $6 for basic access to track information and activity in 39 states that permit online-wagering activity. Under terms of the deal, Youbet.com will pay TVG fees based on a percentage of online wagers. Youbet.com has issued to TVG warrants to purchase as much as 19.9% of Youbet.com's 19.4 million shares outstanding. The warrants are exercisable anytime within the next 36 months for a penny a share, or for a total of about $4,000. In addition, Youbet.com will issue, subject to shareholder approval, a second warrant to TVG to acquire an additional 30% of Youbet.com's common shares for $41 million in cash, also exercisable within the next 36 months. Mark Wilson, chief executive of TVG, said the deal "provides recognition of our intellectual-property position" and would allow both companies to "leverage our combined strengths." The two companies have agreed to cross-license patented intellectual property and to mutually promote each other's brands. TVG's parent, Gemstar-TV Guide, has been aggressive in acquiring patents relating to interactive TV and Internet technology and suing companies it believes infringe on its intellectual property, so the deal also could alleviate fears of any potential patent dispute down the road. Gemstar-TV Guide is 38.5% owned by Rupert Murdoch's News Corp. Youbet.com had revenue of $7 million for the year ended Dec. 31, 2000, and a net loss of $1.7 million, or nine cents a share. Mr. Fell said the company has raised $80 million in debt and equity financing since 1998, which it has used to develop and deploy technology that allows customers to receive streaming video of horse racing and place bets online. Write to John Lippman at john.lippman@wsj.com

To: kidl who wrote (532)	5/21/2001 11:53:04 PM
From: Herc	Respond to of 827

Interactive Gambling Bill Clears Nevada Senate Committee by Fred Faust, RGTonline.com The Nevada bill to legalize interactive gambling moved another step closer to law late this morning when the state Senate Judiciary Committee passed the bill with only one dissenting vote. It now goes to the floor for consideration by the entire state Senate. Today is the last day that bills can be passed out of committees and on to the Senate floor. The Senate must adjourn by June 4 and doesn’t meet again until 2003. If the Senate passes the bill, AB 578, and it’s signed by Gov. Kenny Guinn, Nevada will become the first U.S. state to legalize Internet gambling. The bill, however, is only enabling legislation. It authorizes the state’s regulatory bodies to determine whether online gambling can comply with “all applicable laws” and be properly regulated. If the Nevada Gaming Control Board and the Gaming Commission decide that it can, they are authorized to create regulations and issue licenses to qualified Nevada casino-hotels that are already licensed for land-based gaming. Both regulatory bodies will hold hearings on the legal and technical issues. It’s expected to take 18 to 24 months before any licenses for interactive gambling are issued. Guinn, a Republican, has not announced a position on the issue. Anthony Cabot – a gaming lawyer at Lionel, Sawyer & Collins, Nevada’s most powerful law firm – said he expects the Senate to pass the bill and thinks Guinn will sign it. Republicans and Democrats on the Senate Judiciary Committee voted for the bill today. The only negative vote was cast by Sen. Terry Care, a Democrat from Las Vegas. Cabot and his firm have been working for the bill, which was originally introduced in the state Assembly by Merle Berman, a Republican from Las Vegas. After the committee vote today, he called it “a positive move.” “We have an opportunity, at least in Nevada, to really take a hard look at all the various issues surrounding Internet gambling, and to take a lead in providing the quality of regulation that has been recognized worldwide for our land-based casinos,” Cabot told RGT Online. At a hearing on AB 578 last week, some Senators asked whether passage of this bill would lead to a confrontation with officials in Washington, D.C., who oppose Internet gambling. Cabot minimized that issue in his comments today. “One of the things that Nevada will always try to do is to respect the sovereignty of the various states,” Cabot said. “I am certain that Nevada will not be careless in assuring that bets are not taken from states where it’s unlawful for those people to be placing such wagers. “I think that goes a long way towards meeting the concerns of Sen. Kyl and others who are concerned about the proliferation of this type of wagering. It really does not change the environment at all.” Kyl, a Republican from Arizona, has said he will re-introduce his bill that would establish a federal law specifically banning Internet gambling. An earlier version of Kyl’s bill passed the U.S. Senate in November 1999, but was defeated in the House of Representatives last summer. “No other state specifically authorizes Internet gambling on casino-type games,” Cabot noted. - May 21, 2001

To: kidl who wrote (532)	5/24/2001 8:18:47 AM
From: Herc	Respond to of 827

A splendid example of political equivocation. Meanwhile the internet gambling bill is sailing through the A.G.A. controlled NV. legislature. <<STATEMENT BY FRANK J. FAHRENKOPF, JR., PRESIDENT AND CEO OF THE AMERICAN GAMING ASSOCIATION RE: BOARD DECISION ON INTERNET GAMBLING May 23, 2001 The board of directors of the American Gaming Association (AGA), at a board meeting yesterday, held a lengthy discussion on the subject of Internet gaming. While the board maintains its view that gaming is primarily a state regulatory matter, the consensus of the board is that appropriate regulatory and law enforcement oversight does not presently exist with regard to Internet gaming to properly protect the integrity of the games, the security and legality of financial transactions, and against the potentially harmful effects of underage and pathological gambling. The AGA will evaluate specific pieces of Internet legislation on a case-by-case basis as they are introduced in Congress and state legislatures. Such legislation must not create competitive advantages or disadvantages between and among commercial casinos, Native American casinos, state lotteries and pari-mutuel wagering operations. ###>>

To: kidl who wrote (532)	5/24/2001 8:36:38 AM
From: Herc	Read Replies (1) \| Respond to of 827

Hey Christina! <<Local Casinos Are Still Flush Despite a Softened Economy By CHRISTINA BINKLEY and JOSEPH T. HALLINAN Staff Reporters of THE WALL STREET JOURNAL Riverboats and other neighborhood casinos haven't felt a big pinch from the soft economy. Gambling revenues are up sharply this year in Missouri, and trends appear strong in other states including Illinois and Colorado. Investors have long wondered if gambling is as vulnerable to economic factors as other forms of consumer spending. Many assume it isn't, but that premise hasn't been widely tested in the U.S. America's gambling mecca in Las Vegas, dependent on conventioneers and fly-in tourists, is nothing like the small towns across the U.S. where customers play slot machines on riverboats and then drive home to bed. There hasn't been a significant recession in the U.S. since the spread of gambling throughout the Midwest and South took place in the mid-1990s. The jury is still out -- in part because the economy isn't in recession and other forms of consumer spending are holding up. But casino operators say they believe people will keep hitting the slots this year despite the slowdown. "I think we'll continue to remain strong," said Joe Domenico, senior vice president and general manager of Harrah's East Chicago, a casino operated by Las Vegas-based Harrah's Entertainment Inc. His riverboat casino on Lake Michigan is in the shadows of Gary, Ind.'s beleaguered steel mills, but the majority of his business comes from older people in the Chicago area, some 12 miles to the west. "They have the disposable income" and portfolios that are invested conservatively, more or less immune from the stock market's gyrations, says Mr. Domenico. Also, he adds, "they have more time on their hands." Scott LaPorta, chief financial officer of Park Place Entertainment Corp., Las Vegas, says he is "optimistic" after seeing the performance through mid-May of his company's locals-oriented casinos, which include Caesars and Grand Casinos in Indiana, Mississippi and elsewhere. The trend so far has led to similar optimism about gambling-type investments on Wall Street. "Gambling as a behavior is just not as exposed to the business cycle as other areas," argues Jason Ader, gambling analyst for Bear, Stearns & Co. "People like to gamble, like to smoke and like to have a good time. And gaming, alcohol and tobacco are three of the best areas to invest in slowing economic conditions." Harrah's is enjoying a surge of investor confidence that the company hasn't seen for years. While most major casino companies base their biggest operations in Las Vegas, Harrah's bread and butter is locals-oriented casinos spread all over the country. That has made it less-glamorous than many of its rivals. Yet as it reorganized two trouble spots in Las Vegas and New Orleans this year, confidence in its other markets has helped its stock price. It reached a new 52-week high of $36.95 in April. At 4 p.m. in New York Stock Exchange composite trading Tuesday, Harrah's slipped five cents to $36.57. Certainly, gambling revenues have grown steadily throughout the Midwest and much of the South this year, despite a drop in the number of people entering riverboat casinos. In Illinois, fewer people are going to casinos, but they're losing more -- a sign that casinos have been targeting heavier gamblers with savvier marketing. Admissions were down 4.4% through March, according to state gambling regulators, but adjusted gross receipts -- the amount left over after paying off winners -- were up 7%. In Missouri, admissions to the state's 12 casinos were down 8.8% during the first quarter, but casino receipts were up 8.9%. Still, that isn't to say that casinos are completely immune from economic factors. Some observers do see a few pockets where the soft economy may be affecting gambling. In Louisiana, the good times were rolling through March, with admissions up 15% and casino winnings up 12% over last year's first quarter. But after a recent visit to Louisiana, William Schmidt, an analyst with CIBC World Markets, warned his clients that the slower economy is having an impact on some casinos, particularly in Shreveport. Similarly, Indiana with 10 riverboats saw a softer April after a strong first quarter, says Mr. Ader. In Mississippi, which has more riverboat casinos than any state in the country, first-quarter revenues were down 0.7% from the year-earlier period. Write to Christina Binkley at christina.binkley@wsj.com and Joseph T. Hallinan at joe.hallinan@wsj.com>>