December 21, 2010

Ladbrokes confirms 888 takeover talks

Ladbrokes has confirmed it is in talks to acquire rival 888 in a deal which would value the operator at around £240m.

The Sunday Telegraph reported yesterday that Ladbrokes had made an offer of 70p a share for the casino specialist and Dragonfish owner. 888 shares closed at 49p on Friday. Both companies this morning released a statement to the London Stock Exchange confirming they are in preliminary talks, but that “there can be no certainty that these discussions will ultimately lead to an offer.”

The deal currently on the table is for significantly less than when Ladbrokes first attempted to purchase 888 four years ago, in a deal which valued 888 at around £470m. The 2006 deal fell through due to uncertainty over the future of the US market caused by the passage of the Unlawful Internet Gambling Enforcement Act (UIGEA).

Newly installed Ladbrokes chief executive Richard Glynn recently launched “Project Galvanise” aimed at lifting the company’s performance and doubling the company’s share price within five years.

Ladbrokes head of PR Ciaran O’Brien was however keen to stress that the proposed acquisition was in its “early days,” and that “nothing was certain” at this early stage. He also stated that it was not part of Glynn’s ‘Project Galvanise’. 888 was not prepared to provide further comment to eGR on the deal at this stage in negotiations.

888 has been the subject of constant takeover speculation since it posted a profit warning in May this year, leading to a 13% drop in its share price, and its Q3 results remained stagnant. However, Q4 results were described as “buoyant”, keeping its profits in line with end-of-year expectations.

December 17, 2010

PartyGaming founder avoids jail

PartyGaming founder Anurag Dikshit has avoided a prison sentence, despite pleading guilty to internet gambling charges under the Federal Wire Act in 2008.

Dikshit had faced a possible maximum of two years in jail, but yesterday was instead sentenced to a year’s probation by a court in New York.

Dikshit was able to avoid jail under the terms of a plea deal agreed with federal prosecutors, who did not seek any jail time after he agreed to forfeit US$300m to US authorities for his role in PartyGaming’s US activities prior to passage of the Unlawful Internet Gambling Enforcement Act (UIGEA) in late 2006.

Presiding judge Jed Rakoff challenged prosecutors over the fact that neither of PartyGaming’s other two founders, Ruth Parasol DeLeon and Russell DeLeon, have been charged, despite both being US citizens, while Dikshit is an Indian without American nationality.

The PartyPoker software architect walked away from the company entirely in 2010, after selling two thirds of his 28% stake estimated £188 million in 2009, before selling the remaining shares in 2010. The money is reportedly being used to fund Dikshit’s charitable work in South Asia.

PartyGaming followed Dikshit in settling with US authorities for pre-UIGEA activities in April 2009, agreeing to pay US$105m. Sportingbet followed suit in September of this year, agreeing to pay US$33m (£21m) to US authorities after nearly three years of protracted negotiations with US authorities.

PartyGaming chief Jim Ryan revealed in August that a probity agreement with major shareholders De Leon and Parasol had been included in its merger agreement with Bwin, obligating them to liquidate their position if they could potentially prevent the operator “getting a licence or completing a suitability review” in the US.

December 16, 2010

Danish online gaming faces delay

Denmark has decided to steer away from the usual norm and offered a lowered tax rate to internet casinos operating within the country’s borders. Unfortunately this move has landed them in hot water with the European Commission.

In the meantime a formal investigation has been launched by the EC to investigate the tax rate set forth by the Danish government to internet gambling sites. In the event foreign based internet casinos do receive their licenses they will be eligible to pay the Danish government 25% tax as opposed to the current tax rate of 75% land-based casinos have to pay.

The EC investigates countries that attempts to control its Internet gambling market completely. Countries that are guilty of monopolizing their local casino industry normally impose exorbitant tax rates on internet casinos in order to protect the interests of their brick-and-mortar casinos. Denmark has decided to take a different route and as a result has caught a couple of members within European Union off guard.

The European Commission has notified Denmark that they have received numerous complaints from other European members stemming from their proposed low tax rate. It’s up to the European Union now to decide whether or not the low tax rate in Denmark will give internet casinos an edge. Should they find this to be the case, Denmark might face a hostile ruling after the enquiry is concluded.

Other members of the EU have been encouraged by the EC to share their views relating to this matter as well. Before making a pronouncement the EC will take opinions given into consideration. In 2009 the Danish government has decided to forego its gaming monopoly. The inception of this new tax rate will only be in January 2011, but it must be approved by the EC first before it can be implemented.

Numerous companies have invited foreign internet casinos at the behest of the European Commission. The majority of European countries consented to the EC’s demands, but the U.S still continues to ignore International trading agreements between EU members with their internet casino gaming laws.

Gambling nun accused of embezzling $1.2 million

A Catholic nun with a reputation for gambling trips to Atlantic City was accused of embezzling more than $1.2 million from a college where she oversaw the school's finances, officials said on Friday.

Sister Marie Thornton, former vice president of finance at Iona College in New Rochelle, New York, is charged with sending phoney invoices to the school to pay off personal credit card bills and expenses, the U.S. Attorney's office said.

The thefts occurred between 1999 and 2009, when Thornton resigned from the Catholic college, court documents said. She entered a plea of not guilty to a federal embezzlement charge.

The college of some 5,000 students has come under fire from alumni and donors for never reporting the missing money to authorities and only mentioning the theft in its 2009 tax filing sent in February to the Internal Revenue Service.

Iona officials issued a statement saying the school has implemented new financial oversight controls and recovered most of the missing funds.

The school also disputed the amount stolen, but did not specify by how much. In the IRS filing, Iona said the theft amounted to $800,000.

The nun had a reputation for visiting casinos in Atlantic City, New Jersey, according to former Iona basketball coach Jeff Ruland.

December 10, 2010

New Jersey approves egaming bill

Senator Raymond Lesniak’s sponsored internet casino gambling and sports betting bills have been given the go-ahead by The New Jersey Assembly. Voters will have to vote for the implementation and legalization of internet gambling in the State on Monday the 13th of December. Hopefully the internet gambling bill would receive the thumbs up from state’s Republican Governor Chris Christie before this year is out.

Both bills will enable New Jersey citizens to wager on the internet, however, a previous revision to consent to international players to wager online has been put on hold for the time being, Lesniak informed the Assembly Regulatory Oversight Committee.

41 Votes is the requisite to carry forward these internet gambling bills, it’s then up to Governor Christie who has 45 days to decide whether or not either bill should be approved into law. A close source that has some inside information notified eGaming review that after these bills have been promulgated by the committee recently, “They will enter into discussions with the governor’s people and hopefully persuade them to implement internet gambling in the state. In all probability if internet gambling is regulated and taxed in New Jersey it could become the “Silicon Valley” of internet casino gambling in the U.S,” he said. “As it stands Atlantic City’s gaming industry has gone backwards and we need to do something to revive it to its former glory again.

“We are in high spirits and reasonably self-assured that the internet gambling bills will be voted favourably on Monday and that it would swiftly come into law,” he said.

Bill S-490 relating to internet gambling will authorize Atlantic City’s casinos to present internet casinos to residents from New Jersey. Previously mentioned by Lesniak it’s a potential cash cow that will generate US$35 million in tax revenue, these funds would then be utilised to develop the state’s deteriorating horse tracks.”

Bill ACR-167 proposes the constitutional amendment which will give the legislature the green light according to law permitting gambling at Atlantic City casinos as well as horse racetracks on sports events.

December 02, 2010

Italian cash games to launch from early 2011

The Italian cash poker and casino market could be open for business from early 2011 after an Italian Court rejected network provider Microgame’s challenge to the Italian government’s cash games decree.

According to sources close to the matter, the new version of the decree has been approved and will be published shortly on the Official Gazette, meaning the law will come into force with immediate effect.

Italy largest poker network, with between 25% and 30% market share, lodged the complaint in June on the basis that the cash games decree was different from the version previously submitted, as required under EU law, to the European Commission, effectively putting the launch of poker cash games and casino in Europe’s largest egaming market on hold.

Microgame claimed that additional certifications of gaming platforms and individual games introduced by Italian authorities into the decree would unfairly disadvantage the 120 small and medium-sized operators on its network by potentially imposing extra costs of up to €100,000 per operator. By comparison, the next largest Italian network in terms of the number of operators it supports, Playtech, has only four brands on its platform.

The Administrative Court of Lazio Region however ruled this week that the alleged differences between the version of the decree that Italian authorities planned to implement and that submitted to the EC had been solved by Italian regulator AAMS through the renotification in July of the draft decree to the European Commission.