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888 Holdings just became the first online-only gaming company to reportedly be approved to operate in the US, securing all but the final details of a license under Nevada's month-old online gambling regulations. The Gibraltar-based company hasn't operated online casinos or poker rooms in the US since 2006, when the federal law intended to shut down internet gambling was passed. However, the name may sound familiar: for the first half of the aughts, 888 engaged in some of the most aggressive spamming in the already spam-happy online gambling industry.

888 operates a large network of sites including 888bingo, 888poker, 888ladies, 888sport, Pacific Poker, Reef Club Casino, and Casino-on-Net. It also does business under the name of its subsidiary Cassava Enterprises. From around 2000 to 2007, 888 aspired to omnipresence via pop-up banner ads, email blasts, and its generous affiliate marketing program. Those tactics weren't unusual at the time, but 888 took things a little too far. The company received a slew of sanctions in 2005 and 2006 for, among other things, permitting its affiliates to engage in black hat practices in order to demote competitors in search engine rankings.

The International Gaming Affiliate Marketing Initiative (IGAMI) blacklisted 888 twice for "unethical affiliate practices including scraping and spamming" and "numerous instances of blog and forum spamming." Another group, CasinoAffiliatePrograms, suspended 888's certification in May 2006 and requested that the company take steps to curb spam. These moves were followed by sanctions from a number of players groups. By the time 888 started to get back into good graces, at least 36 groups had publicly condemned the company.

888 still has an expensive affiliate marketing program, but the company says it has changed its spammy ways. There was an arms race for brand recognition back when the online gambling industry was still fairly new, said public relations officer Andrew Benbow, but now 888 only engages in "very good targeted marketing."

"The 888 back office is generally thought of as being the best in the industry," he told The Verge. "It's not in the company's benefit anymore to annoy people about the brand name."

Individual states are now passing their own internet gambling laws, in spite of the fact that the legal status under federal law is still somewhat murky. Nevada was the first state to legalize internet gambling, followed by Delaware and New Jersey. An effort to legalize internet gambling nationally failed to pass before the last Congress went out of session. Two technology companies got the first Nevada online gambling licenses back in June, and a number of brick-and-mortar casinos have also been licensed. However, 888 would be the first "online-specific" casino operator to ever receive a license in the US, said Holly Wetzel, vice president of communications at the American Gaming Association. The Nevada Gaming Control Board hasn't publicly confirmed that 888 received a license, but a source familiar with the proceedings said it seemed poised to be granted after a hearing yesterday. Other online companies have been pushing hard for licenses, and 888 may have received favorable treatment because of past cooperativeness. The company swiftly pulled out of the US market in 2006 after online gambling was ostensibly outlawed under the Unlawful Internet Gambling Enforcement Act, even though the US represented half its revenue at the time. By contrast, PokerStars, which was shut down by the Justice Department in an April 2011 raid on poker sites, has "credibility issues to overcome" in the words of one lawmaker.

888 is a publicly traded company with an $863 million market value. It bills itself as the largest online casino in the world, and is the fifth-largest online poker network in the world according to traffic rankings compiled by PokerScout. 888 plans to launch a poker site and then an online casino for players in Nevada. No timeline has been announced, but the former could come anywhere from a few weeks to a few months.


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Most US gambling operators do not understand remote betting, says Brian Mattingley, chief executive of London-listed online gambling operator 888 Holdings. But, he adds, Caesars Entertainment gets it. The Las Vegas casino operator is 888’s joint venture partner in the US where, one by one, states are passing laws to allow online gambling.

The US prohibits online gambling and has cracked down on operators, particularly those from other countries, that target US gamers.


However, states in need of new tax revenue have been able to pass laws allowing it within their own borders – in much the way that some states have legalised marijuana for medical consumption despite the US government considering it illegal.

Whether other US casino groups grasp the intricacies of remote betting is open to question, says Mr Mattingley. “They think they understand part of it, but don’t know how to get on with doing it.”

Europe-based operators such as 888, forced out of the US in 2006 when Congress passed a law cracking down on online gambling, are licking their lips at the prospect of returning to a newly-reopened US market.

888 is seen by analysts and rivals as a likely winner as the US market unfurls. State regulators are expected to grant online licences to incumbent US gambling businesses such as land-based casinos or Native American gaming reservations.

If Mr Mattingley is correct, these businesses have little or no experience in gambling technology or in marketing online gambling to customers. That is where European online operators such as 888 and Bwin.party, which has joint ventures with MGM and Boyd Gaming, come in.

Industry consultants H2 Gambling Capital says a US market could reach close to $7.4bn in poker, casino and bingo gross winnings in five years’ time, assuming legislation is passed in 17 states. Delaware passed a law regulating online gambling last summer. Nevada and New Jersey followed suit this year. The industry now expects a repeat of the rapid state by state legalisation of riverboat gaming in the 1990s.

“Neighbouring states didn’t want their residents to cross their borders to gamble,” says Norbert Teufelberger, chief executive of Bwin.party, who worked with US land-based casinos in that decade. “It had a domino effect. [Regulation] happened really fast. I believe it will happen similarly online.”

Pennsylvania borders New Jersey and decimated its rival state’s gaming industry in Atlantic City when it legalised casino gaming. New Jersey’s online push has not gone unnoticed over the state border and a bill to legalise internet gambling is being considered in Pennsylvania. Illinois is debating a revised gaming bill.

Nick Batram, leisure analyst at Peel Hunt, says: “Whilst some states will never allow online gaming, any state that has a land-based offering will be keen to protect their interests and this may mean reluctantly moving online.”

The big prize is California – America’s most populous state – where two rival gaming bills are being debated. A poker-only bill has the best chance of success, says Richard “Skip” Bronson, chairman and founder of US Digital Gaming, which provides technology platforms for gaming operators and regulators.

“California, at least initially, is going to be [online] poker-only,” he says, although that is unlikely to last long: it is inevitable that other games will also be regulated within the state, he adds. “You have to look at the history of the gaming industry . . . it’s the best predictor of the future.”

Poker, casino and bingo are the games that will make up the US online market. European operators with sports betting at the core of their business, such as William Hill, Ladbrokes and Paddy Power, are faced with strident opposition to betting from sports bodies like the NFL and the NBA. “For the traditional bookmakers, the opportunity looks limited at the moment,” says Mr Batram.

Bwin.party hopes for a renaissance in the US of its Party Poker brand. Other operators, such as online poker operator PokerStars are also trying to get back into the US after being barred for several years.

Last year, Isle of Man-based PokerStars paid $731m to settle a US Department of Justice prosecution over allegations including bank fraud and money laundering. PokerStars did not admit wrongdoing.

But PokerStars is blocked from the Nevada market because of a clause in the state’s gambling bill that bars any online gambling operator involved in unregulated bets since 2007.

So PokerStars, which described the Nevada clause as “anti-competitive, unfair and potentially in violation of US constitutional law”, is switching its focus to New Jersey. Its parent company is bidding to buy a land-based casino in Atlantic City, which would enable it to apply for a New Jersey online licence. In a sign of how intense competition in the US market is likely to become, PokerStars’ bid is vehemently opposed by the American Gaming Association.

Caesars, a member of the AGA and keen to build an early online advantage, is probably the best-placed US casino operator, according to analysts. Its shares have increased more than a third since it became clear that the New Jersey governor would sign the bill to clear the way for legal online gambling within a state where Caesars is the biggest operator.

Despite the potential size of the US market, online gambling does not seem to suit all operators. Less focused on the online market are Las Vegas Sands and its rival Wynn Resorts.

“Investors will need to prepare themselves for the heavy initial investment companies will make when markets open,” says Mr Batram.

“There will be a huge land grab and it is all about building liquidity as quickly as possible.”


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Since individual states in the US started to legalise online gambling European firms have been busy forming partnerships in order to enter the US market. A spokesman for 888 said that “The potential for the U.S. gaming market is huge. 888 is able to offer bricks and mortar casinos with the perfect platform to launch their brand online, once all regulations are in place.”

888 was the first non-US operator to be recommended for an interactive gaming license in Nevada and prior to 2006 around half its revenue was from the US.

888 has now formed deals with Caesars, WMS gaming and Avenue Capital and they hope these deals with give them a way to do more business in the US.

Another European firm, bwin.party, has formed a partnership with MGM and Boyd Gaming while William Hill has formed a deal to buy out its joint venture partner Playtech and a $695 million joint takeover of Sportingbet.

A research note from Citi said, “Our bottom-up analysis suggests that the US market could be worth 7.9 billion euros by year-end 2018.” With such large revenues to be made it is safe to assume that the majority of European firms will be vying for a share of the market.


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The state of Nevada granted a first-of-its-kind license to a U.K. company last week to operate online poker games in the state. The move will help return internet gambling to American shores but, according to a gaming insider, the value of the license is, for now, closer to a pair of deuces than a royal flush.

The news, in case you missed it, came last Friday when a company called 888 confirmed it will begin operating online poker games as soon as May alongside established casinos like Treasure Island and Caesars. The move comes in response to the federal government’s decision in 2011 that online gambling is no longer illegal if states explicitly permit it; Nevada, New Jersey and Delaware have so far passed laws to allow it.

So why is the 888 news not a big deal? According to a source who works in the gambling industry, 888′s opportunity comes with two major strings attached: it is limited to players physically in the state of Nevada and it only covers poker. The second condition is important because poker depends on player liquidity, which means it is less lucrative for the house than games like roulette or slots.

The source, who did not want to be identified, added that the online gambling industry is focusing instead on developments in New Jersey which has a much larger population (8.8M versus 2.7M in Nevada) and where the state law permits all casino floor games, not just poker.

In the bigger picture, even New Jersey is unlikely to be a game changer given that online gaming companies still have to cater to players on a state by state basis.

“It’s like taking the stock exchange and dividing it by 50. You have to ring fence players, and then account for whether the legal age is 18 or 21,” said the source, adding that the industry is crossing their fingers for a big state to come on board. “If Texas or California falls, that would be a more interesting thing.”

The online gaming industry, which was chased out of the United States in 2006, is also hoping for a bigger breakthrough in the form of new federal legislation that would establish unified rules and protocols across the country.

The outcome is important because potentially hundreds of millions of dollars are at stake for online gaming giants like Bwin that currently operate in Britain and elsewhere, and for fading social gaming sites like Zynga that are desperate for a new revenue stream. Finally, casino centers like Atlantic City are desperate to get a piece of the online action to make up for business they’ve lost to other states and venues.


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An attack on a Kenyan casino by around 100 machete wielding maniacs and gunmen has left seven people dead after police opened fire on the raiders.

The casino is situated 75 miles north of Mombasa, Kenya’s second biggest city, in the popular coastal resort of Malindi on the Indian Ocean. At around 2:00am on Thursday, the Italian-owned Malindi casino then came under attack by members of a separatist group known as the Mombasa Republican Council (MRC), who said they are looking to secede Mombasa and coastal areas from Kenya.

Fortunately, there were security staff as well as four police officers in place at the casino when the gang attacked, who were then able to keep the marauders at bay until reinforcements could arrive. As regional police chief Aggrey Adoli, explains:

“Six of the attackers were shot dead but they also killed one of our police officers. There was a fierce shoot-out outside the casino, because they wanted to try to get in but they were repulsed..We have a contingent of police officers looking for the attackers, we suspect they are hiding in forests around Malindi.”

Tourism is Kenya’s second biggest industry after horticulture, and brings in billions of dollar in revenue every year for the East African nation. The beautiful coastal town of Malindi is particularly popular with Italian tourists and past visitors have included Italy’s former prime minister Silvio Berlusconi.

However, the MRC’s claim on the predominantly Muslim coastal region has turned more violent of late, with at least 12 people killed prior to the March 4th general elections in the country. Consequently, Kenya and its major ally the US, have continued to try and maintain stability in the region, especially given the tentative political situations in nearby Somalia and Sudan.

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