Morgan Stanley Online Gambling Monthly Form Guide (September)

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Morgan Stanley Online Gambling Monthly Form Guide (September)

Peter Amsel
September 03, 2010
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Summary:
Momentum behind federal regulation continued to gather during August. Senator Harry Reid, who is both the Senate majority leader and a senator for Nevada and so likely to be key in any Senate vote on online gambling legislation, said he was prepared to support regulating online poker.
Although Barney Frank’s bill made no formal progress, the Poker Player’s Alliance suggested it could be attached to other legislation in the post-election ‘lame duck’ session, and Rep Jim McDermott was reported to have been pushing for his companion tax bill to be marked up in the House Ways and Means Committee. In the states, legislation to allow exchange betting on horse racing in California made progress, and an application that allows Nevada residents to bet on sports on mobile phones legally was launched. In Europe, a Dutch government commission proposed allowing several companies to have online gambling licences, and Greece issued draft proposals to allow licensed online sports betting, casino and poker. More provinces in Canada now look likely to start offering online gambling despite the teething problems with the launch in British Columbia, and a South African court ruled that online gambling is illegal in the country.
Poker Traffic update:
Some operators saw some month on month traffic growth in August, including the US facing operators Full Tilt and PokerStars, which is encouraging after recent weakness over the World Cup. Pacific saw strong growth in August, after 888 launched the P6 poker platform, aimed at generating more interest from recreational players. PartyPoker saw a month on month decline in August, although it had a stronger July than most.

Source: H2 Gambling Capital, Morgan Stanley Research. Average seated players between 1800 and 2400 BST

Source: H2 Gambling Capital, Morgan Stanley Research. Average seated players between 1800 and 2400 BST

Biggest Pot
• Phil Ivey won the biggest pot of the last 30 days from durrrr (Tom Dwan). The pot was worth $477k, over twice the size of last month’s biggest pot.
US Regulation and Prohibition
• The Poker Players’ Alliance said that Barney Frank’s federal online gambling bill could be passed as an attachment to other legislation before the new Congress starts in January. (CardPlayer.com, 7 August)
• Rep Jim McDermott has requested the chairman of the House Ways and Means Committee to schedule a markup hearing for his Internet Gambling Regulation and Tax Enforcement Act. The bill is a tax raising companion to Barney Frank’s bill. (Casino City Times, 26 August)
• US Senate majority leader and senator for Nevada Harry Reid said he was prepared to support legalizing online poker in the US. Some Las Vegas casino executives expressed concern about this. (Reno Gazette Journal, 26 August)
• California’s Assembly approved legislation that would allow exchange betting on horse-racing in 2012. (Thoroughbred Times, 1 September)
• The American Gaming Association has entered discussions with those pushing for regulated online gambling in the US. The head of the AGA also said that discussions were taking place to ensure operators currently accepting bets from the US were unable to monetize their assets post any change in legislation. (eGaming Review, 1 September)
• The Commonwealth of Kentucky amended its suit against various online gambling operators to reclaim losses by state residents to include PartyGaming. The suit covers the period March 2005 and September 2009 and PartyGaming pulled out of the US in 2006, and industry lobby group iMEGA suggested the timing of the amendment was linked to PartyGaming and bwin’s merger announcement. (PokerNewsDaily, 12 August)
• Harrah’s launched a freeplay internet poker site in the US using its World Series of Poker and Caesar’s Casino brands, with technology and other services provided by Dragonfish, 888’s B2B division. (Online Poker News, 9 August)
• Two US payment processors accused of money laundering with respect to wire transfers related to online gambling settled with prosecutors and will forfeit $13.3m. The payments were reported to be linked to PokerStars. (North Country Gazette, 18 August)
• Barney Frank debated his online gambling legislation with Jay Leno.
• American Wagering Inc announced that it had launched a mobile phone application that allows users to bet on sports legally in the state of Nevada. So far it is only available on BlackBerry. (PR Newswire, 31 August)
European Developments
• French ISPs have been ordered to block online gambling sites without a French licence by Arjel, the French regulator. The ISPs appealed the order unsuccessfully. (ClearlyCasino, 22 August)
• Bwin co-CEO Norbert Teufelberger said that he expects that PokerStars and Full Tilt would not be allowed to operate in the US if the market regulated, but if they were then pulling out of the US would have been a big mistake. (eGaming Review, 19 August)
• A Dutch Justice Ministry Commission suggested that online poker should be opened up to several companies. Internet gambling in the Netherlands is currently subject to a government monopoly. (Casino Gambling Web, 24 August)
• Greece released draft legislation to regulate online gambling in the country. Operators would have to set up a server in the country and use a Greek domain name. Sports-betting, poker and casino would be allowed. (eGaming Review, 31 August)
• Three Pakistan cricket players were accused of deliberately bowling no-balls in a Test Match. The FT argued that the best way to deal with the problem is through regulation of gambling in Asia. (Financial Times, 29 August)
News from around the world
• The Hong Kong Jockey Club said that gambling revenue in Hong Kong rose 7% in the year to June. (Monstersandcritics.com, 1 September)
• Online gambling is now illegal in South Africa according to the Gauteng Gambling Board after a North Gauteng High Court judgment. Both operators and players would be breaking the law by playing. (Business Day, 24 August)
• Four men appeared in court in China, accused of facilitating online betting on World Cup football games. They were charged with helping 20 gamblers wager around $7.5m. (Recent Poker, August 2010)
• Ontario announced that it will have an online gambling programme set up by 2012. In Canada, British Columbia and the Maritimes have already adopted online betting, and the Quebec government is expected to introduce it in September. (CBC, 10 August)
• A court in Delhi said that sports betting in India should be legalized. It said that legalizing betting would help the government track the transfer of funds and it could use the revenue for public welfare. (Cricinfo, 1 September)
Vaughan Lewis
Morgan Stanley | Research
20 Bank Street | Canary Wharf | Floor 06
London, E14 4AD
Phone: +44 20 7425-3489
Vaughan.Lewis@morganstanley.com

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