First online casino

Attempts by French land-based gambling companies to sue their online equivalents for ‘illegal competition’ have suffered a setback in a Paris court.

The French land casino groups Casinos de France, Barrière, Joagroupe and Tranchant sued online gambling giants 888, Bwin, Sportingbet and Unibet for offering what they claimed were illegal gambling (unlicensed) products under French law to French gamblers.

The objective of the action appears to have been to exclude unwanted competition from a market set to liberalise later this year. Legal representatives of the French companies sought a punitive ruling that the defendants be prohibited from obtaining licenses for two years, a symbolic payment of damages in the sum of one Euro and the publication of the punishment in the French media, and Euros 30 000 in legal costs.

The action was, however, unsuccessful.

The Germany-based sportsbetting company Jaxx AG has released its full year 2009 results, posting a 15 percent improvement in revenues to Euro 114.5 million, and a positive fourth quarter EBITDA

EBITDA over the year showed a lower loss at Euro 2.8 million (FY 2008: – Euro 7.4 million) despite the company exiting the German lottery market and the depressed economic conditions pertaining throughout much of the year.

The company informed investors of progress in selling its 65.1 percent interest in the horse betting site pferdewetten.de. As part of the restructuring of the group commenced in Q3 2009 and the associated decision to focus on high-revenue, highly profitable business areas, Jaxx is seeking to dispose of its interest in Pferdewetten.de AG, and initial negotiations with potential customers have already taken place.

Sports betting again brought in the greater part of consolidated revenue in the 2009 financial year and now accounts for 79 percent of revenue. Revenue from sports betting climbed by 30.4 percent compared with the previous year to Euro 90.6 million.

Lottery and Gambling operations contributed 20 percent or Euro 23.2 million towards consolidated revenue, but the rapid growth for online casino and poker products together with the Jaxx lottery business failed to compensate entirely for the sharp drop in revenue prompted by the pullout from the German market.

Quarter 4 2009 revenues reached Euros 37.3 million, and at the earnings level, the group succeeded in returning to profitability in a quarter in which operations made good progress. Despite this EBITDA of Euro 209 000 was not sufficient to compensate fully for the accumulated losses of the first nine months of the financial year.

Earnings after taxes in FY 2009 amounted to Euro – 3 634 000 (FY 2008: Euro -13 907 000, and the company generated a consolidated loss of Euros 7 480 000 for 2009 – lower than the previous year, where consolidated losses amounted to Euros 16 922 000.

Cash and cash equivalents fell from Euros 12.9 million to Euros 9.6 million.

The extensive restructuring program carried out at Jaxx are nearing completion and effected millions in costs savings, Management reported. The new structure is to reflect the stronger international focus of the Jaxx group by now comprising country-specific sales units on
the one hand, and product-specific channels on the other.

By making increased use of synergy benefits and combining departments, it is expected that cost savings running into the millions can be realised in the course of the year.

Jaxx is already reporting a brighter picture going into the new financial year, with Q1 off to a good start and the prospect of good business from the fottball World Cup, the advent of live betting, the growing popularity of the pan-European EuroMillions lottery and the Spanish Christmas lottery, as well as the planned disposal of pferdewetten.de AG.

Jaxx is preparing for entry into new markets, with Italy and France in its sights once licensing is achieved. Overall, the Management Board expects the course of growth to continue, with earnings moving back into the black for the 2010 financial year and an increase in profitability in 2011.

Playing poker for a good cause, there was a good turnout of Capitol Hill lawmakers at this week’s charity poker tournament in Washington DC organised by the Poker Players Alliance and poker siblings Annie Duke and Howard “The Professor” Lederer.

The event, in aid of the Ante Up for Africa charity, gave the politicians a chance to hobnob with international poker stars and raised $70 000, with Full Tilt Poker donating a $10 000 seat at this year’s World Series of Poker main event as the big prize.

The Philadelphia Inquirer, which recently signed an online fantasy sports deal with Hubbub’s subsidiary FanDuel, reported on the event, asking Lederer if there was any substance to Financial Times reports that a Manhattan grand jury probe had been mentioned in conjunction with his and other aces names and Full Tilt Poker.

Lederer appeared relaxed, saying that it was news to him.

The newspaper noted that those attending the charity event included supporters of new attempts to legalise US online gambling by Congressman Barney Frank.

New Jersey Sen. Robert Menendez, a Democrat who has introduced a proposal to regulate online poker, commented: “None of that [regulated protection of players] exists under the present system right now. You have offshore entities. You don’t necessarily have honesty and transparency on many of those sites. You certainly don’t have any revenue coming to the United States. And you do nothing about compulsive gambling.”

Menendez sits on the Senate Finance Committee, and his proposal mirrors similar legislation introduced by Frank focused on online gambling in general that has 66 House sponsors so far.

Republican U.S. Rep. Joe Barton from Texas – a poker fan who supports federal oversight of online poker – was there too, saying: “I am a proponent of allowing people over 21 that want to play poker on the Internet to at least do so,” he said.

Poker Players Alliance executive director John Pappas told the Inquirer: “[Legalisation is] not going to be an easy thing to do because it’s an election year, but if you have the right people who want to do two things: license and regulate those games which should be legal, like poker, but also make sure [enforcement against] illegal activities that they don’t want – sports betting, for instance – is strengthened, then agreement is possible.”

The newspaper explores recent statements by the American Gaming Association, which represents the commercial land gaming industry, and once questioned whether technological safeguards existed to adequately make Internet gambling regulation feasible. Now, the AGA says it “acknowledges that a properly regulated legal framework for Internet gambling is the best way to protect consumers.”

“I think [the AGA's position] is a key indicator of what’s happening in Las Vegas in the minds of the key Las Vegas members of Congress,” Pappas told the Inquirer. “I think we’ll probably see a movement in the Senate to push this thing . . . along with what’s happening in the House.”