Inside Asian Gaming

INSIDE ASIAN GAMING | Oct 2007 44 Briefs Dubai World also bought 14 million MGMMirage shares at a price of US$84 a share,or about US$1.2 billion,and an additional 14 million shares from public shareholders at about the same price, giving the Dubai-owned company a 9.5% stake in MGM. “If the market conditions change we could be interested,” Dubai World’s Chairman Sultan Ahmed Bin Sulayem, also a member of the sheikdom’s powerful executive council, told Zawya Dow Jones. Dubai World, part of the business empire of the Persian Gulf sheikdom’s ruling Maktoum family,said earlier it“intends to promptly complete” the stock purchase from MGM. Dubai World is getting into the gambling business without build- ing casinos in Dubai, where betting is illegal. The state-controlled firm manages the Dubai government’s business projects worth bil- lions of dollars, which include private-equity powerhouse Istithmar, port operator DP World and a big investment portfolio. Unibet CEO Caught Up In French Gambling Dispute France appears unlikely to honour its promise to liberalise online gambling regulations, according to a Forbes article. In late October, less than a week after France’s Interior Minister Michele Alliot-Marie declared that the country was ready to open the market up to international competition, the chief executive of a lead- ing British online gambling company found himself arrested for vio- lating those very laws. The move echoes last year’s arrest of two top officials of Austrian gambling firm BWin.com during a trip to France. Petter Nylander, the chief executive of Unibet, was arrested on a French warrant in the Netherlands. Last year, the French lottery monopoly, Française des Jeux, and its horse betting counterpart, PMU, launched proceedings against Unibet, alleging a breach of French laws that prevent other companies from operating online games in France. The laws, which date back to the 19th century, have faced strin- gent criticism from the European Union. In July, EU competition authorities overturned a French ban on Maltese betting company Zeturf, basing their action on Article 49 of the EC Treaty guarantee- ing free movement of services. This was reinforced by a ruling to the same effect from France’s highest court of appeals. The European Commission, which has been warning that the legislation violates the EU law,has told France to take steps to comply or face a challenge in the European Court of Justice. “Unibet is outraged by France’s total disregard of European Community law aiming to protect a domestic commercial gam- bling monopoly, which is being challenged by the European Commission,” said Unibet, adding that despite the arrest it would conduct business as usual. The European Union has been struggling to open up gambling markets in its member states, as part of its wider program of remov- ing protectionist barriers and promoting free trade. The steady stream of income brought in by gambling monopo- lies in many states has led many governments to resist the moves, arguing that gambling needs to be regulated and certified. In addi- tion to France, Denmark, Finland and Hungary have all faced criticism from the European Commission for failing to update their laws, while Spain and Britain are considered among the most liberal. WTO Online Gaming Compensation Ruling Expected Soon Mark Mendel, the winning trade attorney for Antigua and Bar- buda in their WTO case against the United States over a protectionist US Internet gambling law passed in late 2006, said he expects a deci- sion on their US$3.4 billion per year compensation claim from aWTO panel on November 30. Mendel told the three-personWTO panel that Antigua should be paid US$3.4 billion per year in compensation from the US for lost rev- enues as a result of the new US prohibition. The US responded that at the very most it will pay US$500,000 in compensation, because US$3.4 billion is more than Antigua’s entire yearly GDP. Mendel said, however, that the money made from online gam- ing in Antigua is not reported in their yearly economy statistics, and he insisted that the US$3.4 billion claim was justified. Mean- while, many in the gambling industry around the world, who are following the case closely, took the US$500,000 remark by the US trade rep as an insult. Mendel said the companies who operate out of Antigua do not report their profits to the government—they do not have to by An- tigua law—in fear that the US will go after the company employees and owners. The exact number the three person WTO panel comes up with may not be US$3.4 billion, but Mendel believes it will not be near the US$500,000 the US said it should be. Mendel and his clients are actually already planning on how to implement the sanctions for their compensation claims. He said that the publicly mentioned methods, such as selling copyrighted materials, are not the only methods they will use to get back the money the WTO rules is due to them.“We haven’t fully and completely flushed out precisely what we’re going to do or how we’re going to do it. There is no rush to do it. I think once we get it, it’ll be a pretty big weapon in our hands and we can take our time in deciding how to apply it,”Mendel said. WMS Reports Bumper Quarter WMS Industries Inc, a leader in the design,manufacture and mar- keting of gaming machines to the global gaming industry, reported fiscal 2008 first quarter results, with total revenues rising 20% year- on-year and net income up 56% to US$11.1 million. “WMS’ ongoing success in creating innovative and differentiated products with strong player appeal drove a 20% year-over-year im- provement in revenues to a record first quarter level of $132.5 mil- lion,” said Brian R. Gamache, President and Chief Executive Officer of WMS.“Importantly, this increase reflects balanced growth, as rev- enues from gaming operations rose 23% and product sales revenues improved by 18%.” “In addition to benefiting from the strong demand for our broad- er product offerings, which is driving consistent year-over-year rev- enue growth, we continued to make solid progress with our opera- tional improvement initiatives. Our success with these efforts, as well