Inside Straight: News

Kentucky Says, 'Show Me the Money'
Commonwealth Looking to Take More Than $1 Billion From Sites
By Bob Pajich

Kentucky is attempting to force 141 online poker and gambling companies to collectively pay it more than $1 billion or risk losing their domain names around the world.

The commonwealth is attempting to use a law that allows officials to seize devices used to gamble illegally to seize poker and casino domain names globally. A forfeiture hearing has been rescheduled for Dec. 3.

Attorneys for several of the companies visited Kentucky last month to explain to Judge Thomas Wingate how the commonwealth is overstepping its legal boundaries, but he was only partially swayed. Wingate said that if the companies stop doing business with Kentucky residents by December, they will not have their sites handed over to the commonwealth, nor will they have to pay retribution.

But according to Jeff Ifrah, the lead attorney for the Interactive Gaming Council, who represents more than 50 of the companies whose domain names wound up on a list that Kentucky officials are attempting to seize, Kentucky and its private attorneys will do everything they can to make the sites pay up, despite the judge's ruling.

Wingate already signed a forfeiture order in a closed-door hearing with only representatives of Kentucky, and is expected to uphold his decision in December. If Kentucky actually gains control of the sites' names, it will use what Ifrah is calling "extortion" and hold the sites hostage until they pay up.

The bill is going to cost the companies more than cash. The commonwealth notified the sites that certain criteria must be met before the sites can be officially delisted from the seizure sheet. A sit-down meeting with company officials must take place, and the companies must hand over documentation noting the sites' owners, directors, and officers. Ifrah says the sites will not allow that to happen.

MicroGaming, which through its poker network runs about 40 online poker rooms, already has acted. Before November even came around, the company was the first on the list of 141 to "geo-block" Kentucky residents from accessing its gambling products.

How Kentucky will take possession of the sites is another question altogether.

Online companies register their domain names with companies like GoDaddy, eNom, and Network Solutions. There are more than 500 registrars globally, and many of them are located outside the United States. Cooperation of these registrars would be required in order for Kentucky to take possession of the gambling sites' domain names.

None of the sites that Ifrah represents use U.S.-based registrars, and it is doubtful that the foreign-based registrars would simply cooperate with the commonwealth and hand over the sites, but they could.

If that happens, lawyers hired by Kentucky will hold the sites until they agree to the strict terms that the commonwealth is trying to dictate, terms that the sites will find hard to meet.

This case will not be over in December. Judge Wingate already has told Golden Palace, which submitted an affidavit trying to prove that it doesn't belong on the list, that a hearing needs to take place in order for him to decide. Ifrah believes that will most likely be the case with all of the companies trying to save their domain names.

WPTE Ends Partnership With CryptoLogic, Will Close WPT Gaming Site
Company Also Has Until May to Increase Stock Price
By Bob Pajich

World Poker Tour Enterprises is getting a minor reprieve from NASDAQ and won't be delisted from the stock exchange until May 18, at the earliest, because its stock has spent 30 consecutive days trading at less than $1.

By NASDAQ rules, companies whose stock cannot cross the $1 barrier for at least 10 consecutive days after spending a month below $1 face delisting. WPTE was warned that it had 180 days to get above $1 on Aug. 14.

However, because of the current financial crises, NASDAQ suspended this rule for all companies until Jan. 19, and granted WPTE an extension to comply until mid-May.

The WPTE stock price hasn't gotten close to the $1 minimum since the warning, and currently trades at around 40 cents.
WPTE also announced that it ended its partnership with gaming software publisher CryptoLogic and will no longer operate its World Poker Tour-branded online gaming site after Nov. 14.

2008 Ends With Several Tourneys
Five Majors Round Out Packed Global Schedule
By Bob Pajich

All around the globe, from Sydney, Australia, to Europe, and back to Las Vegas, major poker tournaments are set to take place not only in 2009, but within the next two months. It's a busy ending to another great poker year.

The last two months of 2008 rollicks to an end with five majors and more than 20 smaller tournament series scheduled to take place. Add them up, and that means there are just about 200 tournaments scheduled in November and December in which players can win Card Player 2008 Player of the Year (POY) points.

The majors alone have players traveling to four of the world's seven continents.

The Doyle Brunson Five-Diamond World Poker Classic championship will take place Dec. 13-19, with preliminary events starting on Nov. 28. This is one of the biggest events of the year. Last year's $15,000 championship event attracted 626 players and sent the winner, Eugene Katchalov, home with $2.4 million.

Globally, there are four major events scheduled to take place - two European Poker Tour events and two on the Asia Pacific Poker Tour. Both tours are fed by qualifiers at sponsor PokerStars.

The EPT's Polish Open (Nov. 15-19) and Prague event (Dec. 9-13) will provide tourney action for European players, while the APPT's events in Manila (Nov. 15-19) and Sydney (Dec. 2-7) will give globe-hopping Americans a chance to use their frequent-flyer miles.

Also on the schedule are two World Series of Poker Circuit events, at Harveys Lake Tahoe and Harrah's Atlantic City.

Please check CardPlayer.com for a comprehensive tournament schedule listing.

PartyPoker Still Recovering From UIGEA
Company Will Finish Year About $500 Million Down From 2005
By Bob Pajich

PartyGaming is looking to make up its post-UIGEA poker losses through an increased online casino presence by signing a five-year contract with WaterLogic, a subsidiary of CryptoLogic, for a suite of casino games.

Right now, PartyGaming, which stopped servicing U.S. customers shortly after the Unlawful Internet Gambling Enforcement Act (UIGEA) became law, spreads poker and 50 online casino games through PartyCasino and other sites.

CryptoLogic also said that it is in detailed discussions with a major poker network to share its poker workload (the Financial Times is reporting that the major poker network is PartyGaming), which would "increase liquidity while reducing expenses substantially." CryptoLogic estimates that once this agreement is signed, the company will save $12 million-$15 million annually in operating expenses.

PartyGaming is a publicly traded company that was once the world's largest poker room. Its best poker year was 2005, when the company pulled in $859 million. The company made $553 million from poker in 2004.

But the bottom dropped out in 2006 when the company decided to leave the U.S. market because of the UIGEA. That year, it made $268 million from poker. In 2007, poker revenue rose to $288.8 million.

In the first half of 2008, PartyGaming has made $153.9 million from poker.

PartyGaming's casino revenue in 2007 was $143.6 million. In 2006, it made $51 million from casino games. In the first half of 2008, PartyGaming has made $89.9 million through its online casinos.

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