Industry Happenings

French Court Rules in Favour of EC Law
The European Gaming and Betting Association, an industry body made up of eight major industry players including Party Gaming and BWin, has welcomed the decision by the French Court of Appeal of Versailles to shift the burden of proof onto French authorities to justify that their regulatory framework is "consistent, proportionate, and justified."

Sigrid Ligné, secretary general of the EGBA said, "We are delighted with this decision. It is an important one and comes in the general context of the commitment taken by the French authorities to propose a controlled opening of the French gaming market by March 2008."

The ruling follows a request by Mr. Bookmaker CEO Didier Dewyn to quash criminal proceedings against him for organising an "illicit lottery" and "clandestine betting on horses".

The court found that EC law was clear and superseded French law.

Austria Introduces State-Run Online Poker
Austrian state-run online gaming site win2day.at was launched in February. Among other things, the site offers online poker and, unlike its Swedish counterpart, offers freerolls for players.

Casinos Austria purchased the technology for its poker offering from Sweden's Svenska Spel and Boss Media. Casinos Austria imposes a weekly limit of €800 in bets by an individual (which also apply to poker) as part of its effort to fight addiction to gambling.

EU Takes on German and Swedish Gaming Bans
The European Union's Internal Market Commissioner Charlie McCreevy has issued a letter of formal notice to German authorities - the first stage in legal proceedings - in relation to the German Interstate Treaty which effectively banned all online gaming and betting in the country from Jan. 1, 2008.

Formal objections had already been raised by the European Commission under its notification procedure (Directive 98/34/EC) that the Treaty was counter to existing EU law and now the Commission is set to take the ruling all the way to the European Court of Justice if necessary in order to defend EU competition law.

The Commission is challenging "the total prohibition of games of chance on the Internet; notably sports betting; … advertising restrictions on TV, on the Internet, or on jerseys or billboards; and the prohibition on financial institutions to process and execute payments relating to unauthorised games of chance. In addition, questions are raised regarding the authorisation regime to be granted to intermediaries as well as the criminal sanctions or administrative fines provided for in cases of organisation, advertising, and participation in online games of chance."

The move has been welcomed by the EGBA. Secretary General of the organisation Sigrid Ligné said, "By commencing these broad proceedings only 30 days after the Treaty entered into force, the Commission shows its determination to fight restrictions and in particular prohibitions, which are not backed by genuine consumer protection or public order interests. What happened in the U.S. proved that prohibition cannot be the answer. Trustworthy and highly transparent online gaming companies abandoned the U.S. market, thus paving the way for a grey market in which no guidelines whatsoever exist in terms of consumer protection, prevention of compulsive gaming, and protection of minors."

Sweden Acts Under Renewed EU Scrutiny
The European Commission also instigated proceedings against state-run Swedish poker monopoly Svenska Spel, which continues to exclude EU-licensed poker companies from advertising in the country despite doing so itself. Proceedings are already under way against Sweden for its stance on sports-betting and poker now being formally targeted. Authorities were given two months to show that their rules are compatible with EU law.

Shortly afterward the EC proceedings were launched the Swedish Supreme Court ordered the Court of Appeal to test the compatibility of the country's Lottery Law with existing European law.

Daily newspapers Aftonbladet and Expressen have been battling for years to overturn a District Court ruling which barred them from accepting foreign gaming ads.

The ruling by the Supreme Court means the Court of Appeal must hear the case against the newspapers which just last month published an open letter to the EU Internal Markets Commissioner Charlie McCreevy demanding he act against Swedish authorities over the advertising ban which they claim breaches Articles 12, 43, and 49 of the EC treaty.

Betfair Poker 'Computer Glitch' Costs Company Thousands
The Daily Telegraph reported last month that online poker operator Betfair wrote to around 20 online poker players demanding they return over £100,000 in "winnings" after a software glitch lead to "erroneous payments to every participant in certain all-in situations."

Online poker forums had been buzzing with news of the "sting", and the Telegraph reprinted one "succinct" explanation from a leading forum: "The winner got the standard 1st place prize money. The second place person got the second place prize money. And the third-, fourth-, fifth-, and sixth-place players also got second place prize money!

"Obviously, chaos ensued, with people testing it out again and moving up to the largest stakes possible. They were just all going all-in every hand as they were guaranteed to profit! I just wish I had been part of it."

The Telegraph also reprinted what it says is an e-mail from Betfair: "You recently received payments from playing sit-and-go STTs [single-table tournaments] on Betfair Poker in circumstances that resulted in greater payouts than intended."

Betfair said such games "were incorrectly set up to pay everyone involved in certain all-in situations and this was exploited by you and others to generate substantial returns in a short space of time. As I'm sure you can understand, the winnings received as a result of this exploitation must be returned."

Betfair, which used the Cryptologic software platform until 2004 before moving to an in-house system, had made no public comment at the time of going to press.

Boss Media Takeover Target as Profits Fall
Swedish gaming developer Boss Media is the subject of a proposed takeover bid by GTECH Corporation and Medstroms, who are offering SKR 19 (approximately €2 per share) in cash for Boss Media.

"On a cash and debt free basis, the offer will have an enterprise value of SKR 937 million," (approximately €99 million) the company said.

Medstrom is already Boss Media's largest shareholder with a 12.5 percent stake, and the companies plan to set up a jointly owned vehicle for the transaction if it is approved by Boss Media shareholders.

Boss Media owns the IPN poker network, home to BING Poker, Poker Heaven, Mermaid Poker, and a host of other familiar European names.

Earlier, the company announced net profits of SEK 44.3 million (approximately €4.7 million) for the year to Dec. 31, 2007. This was down from SEK 64.4 in 2006.

Sales also fell to SEK 312.3 from SEK 320.1, and royalty revenues were down to SEK 232.9 from SEK 244.9 in the same period.

Boss Media estimates that the Internet gaming market will grow by 15-20 percent in 2008, and the company said it expects to double its sales by 2010.

Party Poker Revenue Up 23 Percent
Party Gaming, owner of Party Poker, saw group revenue rise by 52 percent in the fourth quarter of 2007 to $120 million as poker continued to thrive, despite the company's exit from the U.S. market in October 2006.

Total group revenue, which also sees receipts from bingo, casino, and sportsbook, was $448.2 million for 2007, up significantly from the 2006 full-year total of $324.7 million.

Poker revenue reached $72.6 million in the final trading quarter of 2007, up 23 percent from $58.8 percent in the same period of 2006, but down 3 percent quarter-on-quarter. The full-year revenue from poker for 2007 was $288.8 million, up from $268.1 million in 2006.

It is estimated that as at 28 January 2008 Party Poker had an average global market share of 10.2 percent.

World Series of Poker Owners Acquired for $17.1 Billion
Harrah's Entertainment, the world's largest casino group by revenue and owner of the World Series of Poker brand, has returned to private ownership with its acquisition by Hamlet Merger for $17.1 billion.

Stockholders received $90 for each share of common stock and the company has ceased trading on the New York, Chicago, and Philadelphia stock exchanges.

The Associated Press reported that president and chief executive Gary Loveman has had his contract extended and is likely to receive $90 million in stock options and other rights as a result of the deal.

The company now plans a $4 billion expansion and has stated that it expects the World Series of Poker brand will continue to grow.

3D Poker Room Continues Rapid Growth
PKR.com, the 3D online poker room, broke through the 1.5 million-users barrier in February, just months after it reached the one million user mark. Average peak players on the site now tops 10,000.

The company, which is in its second year of operating and has never accepted players from the U.S., recently launched a TV-advertising campaign using channels such as Channel 4, Five, E4, Setanta, MTV, and Dave.

New Online Poker Rooms Launched
MarathonBet.com, one of eastern Europe's online largest sports betting operators, has partnered with the Cake Poker Network to launch a new online poker room. Support and security at the new site will be provided by Red Star Poker.

The Cake Poker Network is expanding rapidly with average monthly rake increasing by 15 percent in 2007 and peak concurrent player growth up 370 percent year-on-year in the same period.

Elsewhere, LuckyAcePoker.com, powered by 888, also recently joined the increasingly competitive online poker room landscape offering an interactive lobby, personal navigation features, 3D player avatars, and a large number of payment options.

Poker Racehorses Romp to Victory
DevilfishPoker.com and Laddies Poker Two were the unlikely named victors in two horse races in January.

DevilfishPoker.com, a four-year-old formerly owned by the eponymous online poker site, won a class 5 selling handicap hurdle at Catterick at odds of 11/1, beating a field of 13 other runners on soft to heavy ground in late January.

Not to be outdone and just a couple of days later, Laddies Poker Two, a three-year-old owned by a band of poker-playing owners all of whom won their share of the horse on Ladbrokes Poker site, won the Median Auction Maiden Stakes at Kempton at odds of 11/4 beating 11/8 favourite Ocean Legend into second.

The first time the racehorse promotion was run in 2006 was with a horse named Laddies Poker which finished fifth in the Goffs Millions just behind double classic winning filly Finsceal Beo.